The Art of the struggle with himself

The Art of the struggle with himself

As far as I was able to notice, under the heading Letters are not professional psychologists, but mainly - a practice (or are no longer practicing) traders. After reading the article by Alexander Bryuzgina at number 9 in 2002 encountered some comments and additions to the affected subject.

In the dictionary newbie

To get started, all the same it is necessary to define the concepts. I propose the following interpretation: indecision - the trader's failure to act in a situation where on an own rules, he should enter the market, as well as a trader, leading to the untimely closure of the profitable or unprofitable positions; paralysis - the next stage of indecision, is, as a rule, after non-compliance with the order in the case of a cascade of growing losses. Ultimately, should the closure of loss-making position of the broker (because of lack of funds), or spontaneous, emotional closing position by the trader.

In my opinion, these problems are more still have novice traders, because if people have already spent two to three years in the market, he is confronted with the psychological problems of a different plan. Therefore, all further arguments are, rather, to newcomers who plan to enter the stock market or have recently plunged into the the environment.

From my observations of the trader's indecisiveness manifested mostly in the first time since entering the market. The problem of indecision, as follows from the definition, involves two aspects: first - the entrance to the market, the second - the way out of the market. The most interesting thing is that while apparently the second aspect is often overlooked in the general description of trading strategies.

Novice trader initially quite difficult to understand the constantly expanding variety of indicators - and not in the book examples, not on academic analysis, but on their own money - and to assess the significance of the interactions and variations of these indicators. In this period it is important to understand that psychologically comfortable trader - to keep the position between days or only work within the day. It is from this internal feeling of comfort and should be collected for work not only a combination of indicators and time scales of work.

As rightly observed A. Bryuzgin in his article, limiting the number of methods and indicators used by the trader's life much easier. I would like to draw attention to the fact that the simultaneous use of trend indicators and oscillators in the initial phase and may significantly complicate the work of the trader, especially in light of the fact that recently a large number of analytical reviews, market terms occur often unnecessarily. Cross the same methods to the study of trade on the basis of Elliott waves, with their diversity of interpretations is possible only after the successful development of simpler methods.

An ounce of practice or theory pudy?

Just as with the choice of indicators, the restriction market greatly simplifies life. I have seen traders who tried to work on exotic time intervals, for example, 23-minute combined with 36 - and 53-minute. Then choose different time intervals, all happened again. Naturally, in the process of studying the interactions of basic 23-minute schedule with 48-minute completely lost the purpose for which any man comes to the market - to make transactions and earn money. If we seek a trader clearly take precedence over working directly in the market, the only thing what I can advise in this situation - a job analyst. So people do not help and the mechanical trading system, because after receiving the signal from the MTS still need to act, rather than its ordinary configuration, calming himself to the fact that MTS is also wrong and this signal - false.

As can be seen from the definition, should be attributed to the lack of action-and inaction at the time of being in position. This indecisiveness does not grow profits (if the position is selected correctly) and allows kopitsya losses. Naturally, when the paper profit on the deal is growing, very quickly want to turn this into an actual profit and are not pulled on a psychological goods open position. Probably, this situation is crucial in the selection of time intervals, by a trader to work comfortably. The correct choice of this interval may help in resolving the issue of premature closure of a profitable position. Out of position, with the restriction of damages is the cornerstone of all activities of the trader, and hesitation when leaving the loss-making position may result in total loss of control over the situation.

If the stop-loss, rasstavlennye on the basis of technical analysis is not performed because of indecision, try to set a maximum size of losses on portfolio in the month (eg, 5%, as traders restrict banks), and if losses exceed this amount - immediately liquidate all positions and not to trade before the start of next month. Otherwise, you simply join the ranks pretty harmless animals, which strigut hair professionals. So, if you violate this rule, have lost more in percentage you set the same values, but the position still open, most likely, is paralysis. Define the state of paralysis, just, and while different people have emotional manifestations of this condition is different, in a long time there treyderskom slang term .

When you are immersed in paralysis , consisting of their own sweat, fear and despair. And this is a very hard condition - in times of market movements in your side you get a reprieve, even experiencing spiritual growth, and then even deeper dip in the. At this time, you are no longer able to adequately assess not only the market, but many things around you are not connected with the market.

You deducted comments in the hope of encouraging words about the early spread and negoduete when stupid analysts see no signs of the long-awaited turn. Are you ready to night look like selling the rest of the world from Japan to the States. I think no need to explain that when it is such a state you just need to close all positions and at the time of withdrawal from the market. And better do it yourself, but do not leave an unpleasant procedure for your broker - believe me, it is also no pleasure. If you belong to the category of people whom the state of pleasure, sooner or later you will lose everything and will be looking for other, cheaper pleasures than a test of pain of loss in the stock market.