In search of “secure” transactions

Would you entrust your retirement fund short-traders – lover of risky transactions? I think that most people answer this question would be negative. Of course, we would have preferred to risk aversion, rational thinking long-term fund manager than the stereotypical short-term speculator. Safe investments with low risk – this is what you need for most people who want to receive a pension in their old age. Many financial advisers advise their clients to avoid risky investment: “Do not look for high-risk investments, regardless of what the potential profits they promise to you. Investing should be dull affair – so believe most fund managers.

Of course, there is no one true method of trade, therefore, in no case should not criticize this or that style of trading or investing. I will say honestly: I’d like to think that my pension fund look prudent fund manager. But when it comes to short-term trading in the markets, the trader is unlikely to resemble the people who burnt child boiling water, blow on cold water. Complete the following short quiz, and you’ll understand what I say.

Determine how you will meet one or another judge:
1) I do not like to deal with unforeseen events.

2) I will never let your instincts or intuition to influence my trading decisions.

3) I prefer to make decisions based on logic rather than feelings.

4) I prefer predictable situations.

5) I avoid accidents.

6) I would like to enter a secure transaction.

7). In my ideal world, I would never have risked.

8). Safety – is important.

For each positive response to charge a 1 point for each negative 0.

  Иррациональность толпы

How many points you score? We tested for this questionnaire, several hundred practitioners traders. Where are you? If you scored 2 or less points, then you enter the largest group of traders. Less than 50% of the respondents raised the same points. Thus 25% of respondents scored 1 or 0 points. And only less than 1% of traders scored 8 points! It becomes clear that practicing speculators alien idea of “safe” transactions. They caught cases and played on intuition. They are not opposed to uncertainty, and trust your instincts. Their mentality is not like the style of thinking conservative, reliable fund managers, is not it?

If you choose a short-term trading style, the desire for security could play with you a malicious joke. Traders, who scored more points, often experiencing stress and negative emotions when they trade in markets. Their confidence is easy to undermine, they often call into question their own investment decisions.

On the one hand, short-term trading style is not suitable for those who prefer the security, but on the other hand you have no reason to look for risks on their head, and specifically to do dangerous investment. Meanwhile, many short term traders belong to the type of risk-takers. That is why, in most trading books their authors praise virtuous discipline. If you aspire to risk and uncertainties, you are probably not the man who rigidly controls his instincts. Sometimes it is very helpful to lose some control over themselves and rely on instincts. If you can take the risk and uncertainty with confidence, you have the temperament of successful players. But we should not abuse the impulsive decisions. If you want to make a profit in the long term, it is very important to have a trading plan, and disciplined to follow it.

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