statistics

What is the difference between a statistical drawdown and a psychological one??

Have you ever had a time getting into a situation?, when losing trades follow one another? You suddenly start to panic., and think, that it never ends? But how strong is this drawdown? Maybe, you just panic for no reason? Maybe, you turn statistical drawdown, which can always happen, into the psychological, what not to do? Statistical drawdowns need to be predicted. If you are using a reliable trading system, then the law of large numbers is on your side. From the point of view of statistics, there is nothing to worry about in a series of losing trades.. Since a large number of trades gives you a statistical probability of making a total profit. It's okay, to get a series of losses. It's just a matter of probability. If you don't take it personally, and just keep on lying to the system (managing risks), sooner or later everything will change, and the system will return to profitability. However, some traders turn statistical drawdowns into psychological ones.. They indulge in despair and pessimism., start thinking about failure. And thoughts have the ability to materialize. Reality can change, if you think, that ended up in a financial hole. Psychological drawdown is able to make you think, that you are stumped.

How to control the situation in the market?

The need for control is the most important psychological aspect of profitable trading. Traders try to control the market, but, eventually, pony mayut, that they must accept their fate and establish control not over the market, but over emotions. When your money is at stake, it's hard to stay calm, diet and complete control of yourself. Do you want to win, so you have a strong desire, so that the price goes according to your predictions, however, you can almost never be sure of the outcome of a deal. A person has a desire to completely control his own destiny., however this is not possible. Instead, the trader must come to terms with the, that the market will go there, where will he go, and try to control your impulses and emotions, instead of, to play impulsively against the market with feelings of anger and frustration.

A little bit of my stats

For the entire time of trading on the US stock exchange, I have : positive days 209 minus days 156 The ratio of all positive days according to the correct formula 2.1, not correct 2,2 The biggest disadvantage in 2 times less, the biggest plus. Despite the fact that I have only positive days 53 more, than minus, profit-to-loss ratio greater than 2x 8-)

New York Stock Exchange Investors and Traders Club

Created a new LJ community for people associated with the New York Stock Exchange to share their trading experience on it, ideas and news. Anyone can write their material in it, ask a question of interest and find an answer to it. We no longer have to search for information all over the Internet, everything you need to trade on the stock exchange will be in 1 place . The group is brand new, I'm waiting for new active participants and a little PR from you, but most importantly active discussion of new topics and issues. New York Stock Exchange Investors and Traders Club

American International Group (NYSE: AIG, TYO: AIGT.T)

American International Group, Inc. (AIG) (NYSE: AIG, TYO: AIGT.T) - the largest American insurance company. Headquarters - New York. Founded in 1919 by Cornelius Vander Starr in Shanghai (China). Subsequently, the company's operations spread throughout the world.. IN 1969 year the company went public. Head of the company - Edward Liddy. AIG is a leading international insurance organization, based in the USA, and one of the largest commercial and industrial insurance underwriters in America. Companies, its constituent, provide various types of insurance in about 130 countries (including in Russia). Based on the results of activities 1999 of the year AIG ranked # 1 in net profit among all US-based organizations, specializing in insurance and financial services, And 17 – e place among all American public corporations. According to the leading international rating agencies “Moody’s” And “Standard & Poor’s”, AIG's strong financial position is reflected in its highest credit rating (AAA)

An interesting statement from an analyst

Analyst WSJ: Traders Kill Undervalued Investment Strategy Long Before 1 June, dates, to which General Motors was officially declared bankrupt, it became clear, that nothing can save the American auto giant. Nevertheless, the company's shares all this time were traded in the area $1 for pike. Wall Street Journal Analyst David Weidner (David Weidner) wonders, why this happened and GM securities did not lose all their value.

Survey result : Do you make money on the exchange?

Всего проголосовало 268 person of them : 30% (80 Votes) Еще только учиться торговле 30% ( 80 Votes) Losing money on the exchange 24% (65 Votes) Зарабатывает на бирже 16% (43 Votes) They trade flat Not as bad as I thought, I thought the first place would be people losing money, and those who earn on the latter. Hopefully after reading my blog, the majority will move to the earning group =)

Excerpt from T. Dreiser. “Financier”

In the fourteenth year of his life, Frank Cowperwood first embarked on a commercial adventure. One day, walking down front street, street of importing and wholesale companies, he noticed an auction flag above the door of a wholesale grocery store; the voice of the auctioneer was heard from within: – What will I be offered for a batch of excellent Javanese coffee? Wholesale market price today seven dollars thirty-two cents per bag. How much do you give? The party only goes in its entirety. How much do you give? – Eighteen dollars, – shouted the shopkeeper at the door, actually just for that, to start bidding. Frank stopped. – Twenty two, – said another voice. – Thirty, – a third was heard. – Thirty five! – exclaimed the fourth. The price went up to seventy-five dollars, which was less than half of the real cost of coffee.

Jokes about the stock exchange

One person won the lottery 50 million and went to an investment fund. The specialist advises: – 10 million invest in bonds, 10 million in “blue chips“, 10 million in risky stocks, 10 million in real estate, and on 10 million buy rockets and fire on the Arabs. – Why?!! – the lucky one is surprised. – I do not know for sure, – specialist answers, – but the Jews do just that. Stock analyst and broker collide at the elevator. Broker (maliciously): – well, even now you will say – up or down? Analyst Response: – We need a clear definition on which floor we are now. In any case, we will not rise above the roof, and don't go below the basement. Although it is possible that, that the elevator gets stuck or the direction of travel changes due to an emergency.

10 the laws of technical commerce by John Murphy

Which way the market will go? How far up or down? And when he changes direction? Here are the basic questions for a technical analyst. Besides charts, graphs and mathematical formulas, used in the analysis of market trends, there are some basic concepts, applicable to most theories, used by today's technical analysts. John Murphy, leader in technical analysis of futures markets, based on his thirty years of experience, he developed ten basic laws of technical trading: regulations, which are intended, to help explain the general idea of ​​technical trading to a beginner and simplify the trading methodology to a more experienced practitioner. These prescriptions define the key technical analysis tools., and also then, how to use them, to identify selling and buying opportunities.

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