Tuesday, May 19, 2009

Dynamic equilibrium. Interview with trader: Alex Silver

Question: How did you start trading?
The thing is that I started selling back in 88-89 he was in the composition of the cooperative, where we bought, brought from the West Second-hand computers, upgraded them and then sold on the domestic market. If you talk about currency trading, then this has forced me to deal with life in 91 th, when the Union began to slowly dilapidate and having problems with payments between the various republics of the then USSR. First it was the scheme rasshivki payments, then the trade soft currencies. Naturally, all this for real money - on margin trading and then the speech was not. About Forex first heard about the same time, but it is at a level "as they are there all this organized." Dealing with the bank came in more detail in 95, and 96 I was even delayed in Dealing center of a large bank in Moscow, but, read in detail the terms of trade (if min.depo was $ 10tys when min.pozitsii of $ 0.5 million), I realized it is too risky, and more resembles a game in a casino than to trade currencies.

However, a certain impression, of course, it has made on me. On the Internet trading slightly acquainted in 99-2000 he was, but I then lived in Presnensky shaft and vydelenka it cost a lot of money - I was sorry to spend in the cause, the successful result of which I, at that time was still not sure. And when in 2002-m moved away, where there was a home local area network, we first began to explore the potential of Internet trading.

Question: Who are your mentors and why?
One of my good friend, former counterpart in soft currencies, now co-owner of a small bank in Moscow. I turned to him for help in August 2002. In September, I introduced him to its developed trading system in a 4-hour shift on the base 4 with risk of 5% for position and 20% in the 4 position. He looked all of this quite closely, smiled
and proposed trading schemes through his dealings (by phone) with a deposit of $ 2000. But, at the opening of each position, I additionally had to say in one sentence the reason for the opening (the dealers have been warned, and without the proposal did not take my instructions to the opening) This was excellent training for the trade, as I then understood, although the need to articulate the reason , dial up to the dealer, talk to him and I seriously straining or irritating, but it is formed and the end-all, a sensible approach to open / close positions.

Question: What was your most successful and most unsuccessful transaction?
Frankly, from the very beginning I have not shared their trade for individual transactions. More precisely, it would be to talk about periods of trade. say, the most successful period was in June-July 2003, when not exceeding the systemic risk in the two months I received more than 100% profit. The most unfortunate period I was in November-December 2003, when I escaped from under the "oppression" of telephone trading on the Internet-trading, done a bunch of rather silly mistakes and allowed Drawdown more than 70%. However, it is difficult to say that the result is successful and what was not successful. The point is that the situation is November-December 2003 was a logical extension of "dizziness from success" of summer 2003. But in January, after a profound drodauna, I created a system of Silver-channels, which in 2004 helped me get out of drodauna and even, at the end of the year, receive a small profit (around 20-25%) so that the success of a dangerous relaxation and loss of clarity of perception market, but failures often lead to new breakthroughs and new success if they apply correctly, of course;)

Q: What tools do you use when making trading decisions?
The thing is that I now sell for many and various tools of trade - this is not the only currency it shares, and CFD on stocks with leverage 1:10, and futures on stock indexes and futures on gold, oil. Now preparing a system for trading in currency options. Naturally, every tool of trade requires a slightly different approach. If you talk about currencies, here I use the system Silver-channels, based on analysis of a candle with Ishimoku and my additions to it. Basic taymfreymy for trade - the week-days, months and additional 4-hours. Before the most important news of trying to reduce the risks to a minimum, even if there is confidence in the future market movement. Confidence - bad counselor for trade;)

Question: What are your personal qualities, in your opinion, makes you a good trader?
Most importantly - this is a systematic approach to everything and everyone. In the past I was a system programmer, but the arrival of the system software was not accidental, but was the result of a systematic approach to implementing the goal. Then I grew up in the two years of the 5 level electromechanical services for ATSPU computers with non-EU entity which deign to take in the CC, first to st.inzhenera, electronics, servicing and repair any computer that is in the VC. And then, after writing me makroassemblere, interactive program for data processing, which in the design department, and even did not dare to dream, I was offered the position of the system programmer developing carrier. Ie has set a goal (to become a system programmer), introduced a certain system to achieve this goal, and then implemented the system. Then himself was struck by how easily and quickly reached this result, but such an approach have not worked in the life and times of two, showing its effectiveness. The same approach I used when set a goal to become a professional trader. Ie a man who earns his living exclusively from trading in financial markets. I can not say that this goal has been reached today, but so far everything is moving well on the plan;)

Question: Do you feel that your trade is becoming better and why?
1. As a result of this trade.
2. According to labor on this trade.

Ie if in 2002 I almost day sat at a monitor, ie, for the purpose of trafficking. In 2003 the trade had already spent much less time, but still it was more than half of my irregular working hours. In 2004, I no longer promotes VIAC.RU, analysts and other business than the actual trade. By the end of 2004, I already traded in several accounts, spending, while no more than 10% of their time on the trade itself, and the results, according to investors are becoming better and better, but even they know better than me;)

Question: What effect trade has had on your personal life?
The point is that we have with his wife was a small, family-run trading business, which in 97-98 was even quite large, but after the crisis situation in the market all the time has changed for the worse for our business side and, despite our efforts , the case required more labor, and creating less impact. Actually, I have therefore decided to engage in trading, that the prospects for further development and expansion of the business has not been seen for some time. And this situation is highly Davila on the psyche. In September 2003, I closed it. His wife initially highly experienced - prirosla its entire body and soul, but now quite happy. I can not say that financially it is more than ever, but the situation is now stable and much clearer and, more importantly, that there is a clear development prospects.

Question: You have developed a system to identify signals in the FOREX market? You can describe what the components of the system?
That's why the system is not only signals the entrance / exit, but rather a set of different rules of behavior in certain situations. Ie this amount of open positions, the number of open positions, while the number of traded instruments, the number of traded markets at the same time, the risk of one position, the cumulative risk of the account, etc. etc. All this is a system that I sell. Actually, for each trading account generated some unique trading system, depending on what amount to account for how much this amount is given to the management, the nature of the holder of that amount, etc. etc. All these nuances are included in some one concept, which can be called a "trading system".

Question: How much you needed time to develop your trading style?
Well, since April 2002, three years and developing it further;) I can not say that this development has been completed and the next I will not grow. Moreover, once the development is stopped - then all go downhill, and shlopyvatsya business starts to deteriorate.

Question: Are you planning any modification or revision of their systems in the near future?
The system - this is not something static. It is itself a dynamic and evolving along with the environment in which the moves. To ensure that the system was able to survive it must continually comply with the environment in which it lives. The trade system is in the market, then it needs to be consistent with that environment. As the feedback from the life of the system have the results issued by the system in the trading process. I really like the concept of "dynamic equilibrium" with respect to the trading system and its interaction with the market. While the system is in a dynamic equilibrium - a trader in the water as soon as the dynamic equilibrium is violated, because the trader knows where ... It is therefore necessary to maintain a dynamic equilibrium is constantly and always.

Question: How does the system take account of news events?
Will not they violate the security of algorithms? Fundamental analysis, I am, but it gives the possibility of taking into account the overall structure of the market and, as shown, the practice is not useful for current sale even at a week's taymfreyme. For example, if the market is set against the dollar, the good news is the fundamental nature can only slightly delay the fall of the dollar, while bad news for the dollar will be seen on the cheers and the dollar to fall just a couple-three figures. Similarly, and vice versa, if the market is optimistic about the dollar, as we saw on April 1, even on the bad news the U.S. may grow up into two pieces. Therefore, news events are recorded through the filter of current market sentiment. For a system of trade week was nothing more than a "news noise";)

Question: What are the measurements you use to evaluate how the system works?
Typical results of trade statistics. If it is within the limits of tolerance - it means everything is OK.

Question: You are currently working on any software project?
This means, probably, the MTS? No, I do not sell until the development of MTS and the MTS I'm not very attracted. Now I have more to do - I train a group of traders, who are then able to trade effectively. I think it is a more interesting job than the development of MTS.

Question: What is the usual mistake of those who try to develop a trading system?
Not quite understand the question, which means "normal" error? The most common mistake of those who begin to trade any system - it OHVR (It is I'd like Enter (Exit) to / from the market). Here is the most OHVR typically breaks any system in the first couple of months and trade leads to a stable Drawdown, unless the discharge. Learning to wait for a clear and a clear signal to learn input / output when not to do so - this is also part of the system of trade.

Question: How do you view the loss, and how you define your risk before you enter into the market?
First of all, it is necessary to understand - the system is lost or not, ie all have been completed in accordance with the system or have taken place OHVR or other psychological factors. Ie when calculating the statistics, I share the transaction on the system and non-systematic. Then watch, the balance of profit / loss on the transaction system is within the limits of tolerance - all right, this system costs, if allowed to go - then it is necessary to understand what is happening, look for the causes and correct something. But with non-systematic work harder - this is the issues of psychology;) With regard to the definition of risk, the trade over the phone in 2002-3 he taught me to do this automatically, ie before opening the position, "the potential risk position, resulting overall risk on the account, as is averaged, and at the wretched market situation. How? Well, sometimes in mind (helping former geodetic practice when it comes quite sophisticated calculations in the mind of conduct) and on the device;)

Question: Do you prefer long or short-term strategy?
I prefer an effective strategy, but as practice shows, my trade, it is for me as a trader of long-term strategies are more effective. So initially, in 2002, I traded for 4 hours within the week. Then, in 2003 moved to a 4-hour, but within a month. The background graphics were 4-hour and dnevki. In 2004 I moved to the trade dnevkam at intervals of 1-3 months, but now increasingly turn to the trade weekly intervals from 2-3 months of trade. up to six months or more. There is also in the development and positional strategy, which position can live more than a year, and even a few years.

Question: What was your most unforgettable transaction?
29 April 2003, the night I came home and saw that day, rose to the maximum, setting a new maximum. Losses at that time had exceeded all possible limits me. I called the dealer and there was a man who was not aware of guidelines for me - then did the operation, bordering on insanity - closing all unprofitable position, I turned a 65% deposit against the dollar. I was lucky - the dollar is, indeed, fell heavily, and in the holidays, my violation was observed only on 12 May. By that time the account has grown more than threefold. But, according to our agreement, I have lost their share of profits and has been suspended for a month from the trade) and it was for me then the best lesson - not every success is, indeed, a success!

Question: With all the variety of technical and fundamental analysis tools, as a beginner trader avoid information overload or ?
Have clear and explicit goal of its activities and fairly detailed business plan for the formation and development of its activities. It is best, as in my opinion, is to pass our seminars http://www.viac.ru/cd/183 - at these seminars, I realized his idea of education for traders from the initial acquaintance with the financial markets to create your own trading strategy and the training of trade this strategy in real-time. The objective of these workshops is to people, their past, clearly understood what he stood for the way that he really wants to get this and how to reach him.

Q: What do you think the biggest misconception novice traders to trade the markets?
What can I become a millionaire, with $ 200 in your pocket. In fact, probably every novice in his time, believed to number of days invested $ 200-1000, it will become a millionaire, that he buys for his first million, etc. etc. ;) As soon as people understand that this business are no better and no worse than many other jobs and that it is quite comparable to the earnings remaining businesses - then already started the formation of a normal trader. However, many so-so and do not understand, while continuing to rely on a miracle.

Question: Can you describe a normal trading day of preparation before the performance of the transaction?
My "day trading" on the currency trade begins at 2:00, when the DOT closed daily candles and ends at 2:30-2:45, when viewing graphics on all currency pairs and the open / close position. Accordingly, the "trading day" for the American Foundation begins at 23:30 AM EDT and ends at 0:00. Some positions are opened at the next session, but not at the opening, but sometime after 18:00 Moscow time. But, as I said in itself trade now takes a fraction of my time, but all the other cases are also related to the market, market analysis, etc. issues, so that somewhere once helped and trade. And, most importantly - a full and active recreation! This is essential for traders! More fresh air, more traffic, because the well-being of the trader, his perception of himself, living environment is an integral part of its trading system, and this part too, should be kept in dynamic equilibrium with the environment;)



Mark Navumau
Forex Magazine

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