Understanding the truth
Trading – game of probabilities.
Imagine, that we are flipping a coin. Eagle – i win dollar, tail – dollar you win. It's that simple. Heads and tails will fall half the time, and we both won’t win, neither lose.
However, imagine, that secretly from me you slipped a counterfeit coin. For every 100 throwing eagles fall 49 once, and tails – 51.
You now have a money printing machine. Baptize him “Системой Торговлand Reshkami”. Everything, what you need to do – sit and always bet on tails. Finally, You win all my money (and any other, who will sit with you to play). Any real trading system gives you an advantage. Favorable slope. Something, what will happen sooner, than not.
No matter, what the system You are using, Whether, for example, breakout patterns, trend following, Fibonacci, moving averages, channels, oscillator signals, Bollinger Bands, swing trade, opening gaps… You rely on a positive slope. Essentially, trading system He speaks, “when ‘x’ happens, it is usually followed by 'y'”.
Иногда это не срабатывает. In most cases – works. And all, what does your trading system – helps you identify high probability trades, then enter correctly and defend yourself, while your profit grows. Certainly, какие-то системы торговли better than others. But don't get bogged down in the quest for the perfect system.…
You know, what is nirvana trader? Into the elusive “The Holy Grail” – system, which delivers profit on demand and never goes wrong.
Find систему торговли, которая Вам нравится. With which you feel comfortable. Which you understand.
Then get along with her. Be consistent. Sane, disciplined trader will take the middle the system and will make money on it. Азартный, surface trader will take a shiny the system and destroy it. Everyone has Traders бывают “good ones” And “плохие” days. Some days you will receive a small profit. On other days you will have small Losses. Once or twice a month, average, You will get big profits. This is how traders make money. This is not for you 9 to 5.
The problem is, what you never know in advance, when a big deal appears. Like our “Tails Trading System”, once does not solve anything. You MUST see the whole picture. Поймите, what's the current deal – just one of many. So the current deal hardly matters. It looks like a particle of plankton in a huge ocean..
Trading – it is risk management followed by surrender to the oldest law in the universe – the ancient law of probability.
Plan your bid, and then trade according to plan
Your work trader is to follow the trading plan.
And who will write this trading plan? You. Pay attention to the word “write”. It must be recorded, on your trading desk, in front of you. Your trading system will give you the rules. Everything, что Вам надо сделать – translate them into plan.
A trading plan should have three parts: Setap, Entrance and exit. (Obviously, we will not be able to give here the details of any specific trading systems – there are literally hundreds of them!) The fact, that the trading plan covers all the possibilities. You know, what to look for in the market, when to enter a trade and when to exit it.
Try not to overcomplicate. Then follow the plan. Fanatically.
If you don't spend a lot, You won't be able to lose much
One of the biggest mistakes, which you can commit, how trader – invest too much money in a deal.
The more money you use, the more emotional fuel you add to the fire. In the end, You, по всей вероятности, burn out … ужасно. And post-traumatic stress can be irreparable..
Most beginners Traders gamble too much in the hope of winning relatively quickly. Experienced traders they know it well. IN deutrading, where deals are growing fast, a few big losses can eat you alive very quickly. Good ones дейтрейдеры, которым удалось выжить, risk only a tiny amount of their trading capital on any trade. If you have limited funds, try using a trading system with loved ones стоп-лоссами. Trade shorter periods, type of 1-minute charts, where losses can be minimized. Presumption – another reason for excessive risk.
“Hey … the eagle has already fallen 10 times in a row … let's put half the capital on tails now (I'm sure, that she will fall out now) and break the bank”. Problems “верных сделок” состоит в том что:
a) The market doesn't owe anyone anything;
b) Everyone sees them as super reliable and jumps aboard. That's why, when they go wrong, where to, they do it powerfully.
Take the minimum amount of risk on every trade. You will be calmer, which means, able to execute the transaction properly.
Не думайте о деньгах, think about points
Reducing the risk, we come to interact with money.
Whether we like it or not, money is highly valued in our society. They are important. And we associate a lot of sensations with them.
How will you feel, when in the fog in front of you you see, how hundreds are piled (and maybe, thousands, depending on the size of your account) Dollars.
Problems “reckoning” – part of the game. You have to lose something, to win something. There is no holy grail, as we said above. If you can't change your relationship with money, try not to think about them. Concentrate on numbers instead.. Count in “percentage of the account”. Считайте “average risk-to-reward ratio”. Считайте “the number of points of potential profit versus the number of points of maximum risk”. Concentrate on getting the numbers you want, and money will take care of itself.
What can the subconscious mind…
It may very well be, what do you secretly want to lose.
Suicidal behavior can easily show up in the markets, especially among Day Traders. When prices are dancing before your eyes, it can bewitch. You can start to feel like this, as if they are playing with you. This is why you must be very, very careful, to avoid emotional trading. If you – boiling cauldron, ready to explode, then you are on your way to a serious market failure.
Don't bring emotion into Trading. Remember, what's the current deal – just one of a long line. You are here for a long time. Remember this and never get attached to any trade..
You must see yourself as professional trader. At the beginning of each trading day, before the market opens, spend a few minutes on yourself.
close your eyes. Begin to visualize market. Imagine schedule on my screen. See, how prices fluctuate up and down. See yourself, entering the deal. note, that you feel relaxed. You are on the alert, but calm. Completely emotionless. Watch, how the price moves after, how did you enter the deal. How it approaches your stop loss. Place a lot of trades in your mind. Bring them to an end. Here you got a losing trade. Remember, that you see the big picture. You are passionless. Completely calm. You enter another trade. You get a small loss again. You are unfazed. The next trade ends in a win. Are you still relaxed. All this – parts of the work.
It takes practice. And you must do it regularly., to get the maximum benefit. Practice this every morning., и в любое время, when you are just starting to feel anxious or lose focus. The advantage of this technique – in its availability. And the return on it is invaluable.
Be your own boss
You – that, who is in charge of your trade. You alone are responsible for your successes or failures as a trader. Not a market … not a trading system … not the government and not Федеральная Резервная система.
Become your own mentor. Observe your behavior during the trading session. Track your feelings especially carefully..
Focusing on the sensations will give you useful information about your productivity.. Remember, that the very presence “выигрышных” or “проигрышных” days – не проблема. Important, how do you experience them.
If you are a professional, then must remain unperturbed. Market no place for irritability … market makers … injustice of life…. Negative emotions are early signals, that you should cool down and relax. Return to original state. Identify areas of tension in your body and relax them. Just let go. Do the visualization exercise again. Remind yourself, that it's just interest. This – just another deal, another day.
If you made a mistake – and who does not have them? – don't punish yourself. Benefit from it. Thank the market for the lesson and move on. Be kind to yourself! It is very important to avoid being drawn into a cycle of emotional self-flagellation., which usually only results in damage to your account and your ego.
The language of consciousness
Try this experiment:
Ask a friend to close their eyes and extend their hand forward.. Now let him think about the word “weakness”, and you press his hand. You will notice, how easy it will go down.
Repeat the experiment, just now invite him to focus on the word “force”. This time, You will notice tremendous resistance from his hand., which has become difficult to move.
Two simple words – two very different results. If words are so powerful, только подумайте, what are you doing to yourself, when you call yourself “идиотом” или еще хуже! But the words appear even more subtle, than just definitions..
“A loss”‘. Think, about that, what comes to mind at this word. Missed opportunity. A crack in life. Theft. Even bereavement. Not surprising, what traders discover, how difficult it is to accept losses. Let's call them something else:
“Расход”. To her, now it sounds better. Much more like a business. Helps get you back on track. Similar, но по другую сторону, let's stop talking about:
“Winnings” – plunge into emotions again … replace it with:
“Income”. Income versus expenses – it's not about trading anymore… Business.
You are very likely to succeed., when you realize it. And forget about pulling your ego into imaginary battles, when your mind gets trapped in the false meaning of words.
Monitor your language in trading. Always use neutral words, how about yourself, and about the market.
Less – it turns out more
Best time to trade – usually two hours after opening. Some traders also like to trade in the last half hour before the close. At this time, the biggest impulse, with real pressure from buyers and sellers, creating better trends.
Many дейтрейдеры also follow the rule “3 blow and you are not”. They are limited to a maximum of three trades per day and thus greatly reduce their stress levels.. Doing the same, You will act more clearly and less likely to make mistakes.. You also insure yourself against “suicidal days”, when the losses go one after the other, each next is the result of attempts to recover from the previous… Reading this out of the market, Вы можете подумать, that you will never fall into this trap.
but, just amazing, how many traders are unprepared, when the losses rise, like an avalanche. Let it be your motto: “Tomorrow will be another day”.
Take it easy. No need to trade 40 hours per week. Accumulate profits gradually. And you will receive more, working less.
Accept life
Figure out, Why do you trade.
It can be a delight of excitement, a play of nerves, adrenaline rush at words “financial markets”.
Maybe, You enjoy the status trader. “Hello – I'm John Do. – Futures trader – Glad to meet you… ” For some Traders, this – the rescue. They hate the world around them – my job, chief, жену, all my whole life. Trading then it becomes a fantasy, a means of escaping the world. Actually, trade should only be one.
Making a profit
If you are doing this for any other reason, You, по всей вероятности, doomed to fail, because you will work on emotions instead of cold, mechanical thinking – a sign of good trader. Look at your motives for trading. Will there be a hidden cause? If something is missing in your life, what is currently filling Trading, then you should refer to this. Live a balanced life. Do not spend, trading, целый день. Meet people. Get out of the shell! Start a new business. Find new interests. Keep your trading desk free of emotional chaos.
A real trader's tool
Day traders live from moment to moment.
Intense pulse of quotes, often makes it difficult to see the whole picture. But you must be able to do it, if you want to survive and thrive..
Presenting the current deal as just one of a series helps maintain discipline and lower emotional cholesterol levels..
But there is also such a trading tool, which can really improve your productivity, more, than what – or other.
Trader's Diary
Don't think about sentimental sentences, Sort of: “Dear Diary … Today I … “, that's not about that.
Your trade diary can be computer – simple text file, lying on the desktop. Or do you find traditional pen and paper more efficient?. (There's something about a letter on paper, what makes it more personal. Probably, the movement of the hand and eye is coordinated with the brain.)
And someone will choose a voice recorder. It's good, if you prefer speech to writing. No matter, what do you use, important, what will you write (or say).
Don't worry about grammar. Take notes about, what's happening. Undoubtedly, You can write facts and figures – ticker stock, time and date, size positions, entrance price stop-loss, exit price. Но также и – more importantly – write down your thoughts. If you hesitate when entering a trade, write about it. If you are scared now (страшное “The Trader's Remorse”) mark it. When you leave, explain, why. At the rate? Took profit? Why? How did you feel before leaving? What do you feel now, постфактум?
It will take only a few seconds to write such a commentary on your trade.. But the information, which you receive, may be priceless. Here's why:
At the end of every week, preferably on weekends, when markets Closed, consider all deals of the week.
Surely you will see a model of your behavior. Probably, there is something, что Вы делаете, and it constantly leads to negative results. And once you have identified the problem, the decision usually becomes obvious. Do this exercise every week and every month., to get a longer perspective. Only you can do it for yourself. Nobody cares about your business better than you..
You don't need the latest million dollar trading system at all, to be successful in this business.
Take a look inside yourself. You will be amazed at the results.
A source: Day-Trading-Mind.com
