Brett N. Stinberger - Doctor of Philosophy and Professor of Psychiatry at the Medical University in Syracuse, NY. New York. He is also an active trader and writes articles on market psychology. The author of the book "Psychology of Trade, 2003. Doctor Stinberger published over 50 articles on short-term approaches to behavioral change for traders.
"Think before you act!"
"Count to 10 before you say something, to be regrettable."
"Ready, aim, fire!"
"I think about all this."
In many situations we face in everyday life, we recognize that the action should be guided by reason. Justification is a powerful antidote to impetuous behavior. An excellent example is the violation of habits. We learn to overcome the impulse to eat or drink, forcing yourself to think about the consequences first, and then consciously choose an alternative course of action. Without clear thinking on priorities, is too easily subject behavior, which offer short-term rewards but long-term negative effects. How does this apply to the sale? After working with many traders in the past year, I can vouch for the fact that among active market participants, exceeding the trade regime is the single most common problem faced by them. Excess trading regime in this context means to enter into a transaction where there is no apparent benefit, and even no reasonable explanation for the trade. In general, the reason behind the excessive trade, not the other than, "I felt like a rising market." With impulsive trader to understand is that this is no different from the justification of man sitting on a diet - "I felt the desire to eat chocolate cake."
I usually go to the cabinet and watch the trader's trade. Although a trader may lose money every day, usually it makes money, while I watched him. This is not because I propose a special understanding of the market - usually I do not propose their own understanding of the market trader. Rather, I demand that the trader explained the reasons behind the ears of its trading activities. This naturally slows down its trade and forcing him to make a distinction between standing trading ideas, and simple emotional impulses.
From my point of view, all ideas about trade are reduced to varieties of two themes:
1. market development trend and should be purchased for rollback when an upward trend, or sell when ascending descending trend;
2. the market is moving in the range, and should sell in the approach to the upper edge of the range as soon as the purchase or decline to buy when approaching the bottom of the range as soon as the sale of fizzle out.
If I use a reliable rationale for the trade, I want to assess the status of these subjects, as in the temporary structure in which I sell, and greater time scale. The trend in the short-term temporary structure could be part of the range in the longer time scale, a range of short-term temporary structure could be consolidation in the big trend. It's not so rare, your ideas on the objectives for the trade position will continue to arise from the evaluation of larger temporary structures.
Correct way to identify impulsive transaction - it is the absence of a well-planned exit. Ninety per cent of effort expended at the entrance to the market, because the purpose of trade is to be on the market, rather than a profit. Impulsive trader looking for action, not results. As a way out of the market relates to the termination of, the base is it rather quickly.
On the contrary, a reasonable trade includes several components:
1. Assessment of current price developments: the pressure of customers increases or weakens, the pressure is increasing or vendor contracts, price volatility increases or decreases?
2. Assessment of the market in the short and long temporal structure: growing trend or trading range is limited?
3. The purpose for the transaction: the movement to the new maximum / minimum, with the development trend, the movement to a certain price value when trading in the range.
4. Criteria for closing a position: the conditions that will convince you that your idea of trade does not work anymore.
5. The decision regarding the allocation of resources, trade: how much of your trading capital you are willing to compromise in this trade idea.
If progovarivanie out these five components before you make a deal, cause you to trade less frequently and make you trade in a different way than the way you sell now, it is likely that you will exceed the trade regime. Definitely there is something that can be called a sense of the market. However, this does not imply that the sense of the market replace the knowledge and understanding of the market.
"Think before you act!"
"Count to 10 before you say something, to be regrettable."
"Ready, aim, fire!"
"I think about all this."
In many situations we face in everyday life, we recognize that the action should be guided by reason. Justification is a powerful antidote to impetuous behavior. An excellent example is the violation of habits. We learn to overcome the impulse to eat or drink, forcing yourself to think about the consequences first, and then consciously choose an alternative course of action. Without clear thinking on priorities, is too easily subject behavior, which offer short-term rewards but long-term negative effects. How does this apply to the sale? After working with many traders in the past year, I can vouch for the fact that among active market participants, exceeding the trade regime is the single most common problem faced by them. Excess trading regime in this context means to enter into a transaction where there is no apparent benefit, and even no reasonable explanation for the trade. In general, the reason behind the excessive trade, not the other than, "I felt like a rising market." With impulsive trader to understand is that this is no different from the justification of man sitting on a diet - "I felt the desire to eat chocolate cake."
I usually go to the cabinet and watch the trader's trade. Although a trader may lose money every day, usually it makes money, while I watched him. This is not because I propose a special understanding of the market - usually I do not propose their own understanding of the market trader. Rather, I demand that the trader explained the reasons behind the ears of its trading activities. This naturally slows down its trade and forcing him to make a distinction between standing trading ideas, and simple emotional impulses.
From my point of view, all ideas about trade are reduced to varieties of two themes:
1. market development trend and should be purchased for rollback when an upward trend, or sell when ascending descending trend;
2. the market is moving in the range, and should sell in the approach to the upper edge of the range as soon as the purchase or decline to buy when approaching the bottom of the range as soon as the sale of fizzle out.
If I use a reliable rationale for the trade, I want to assess the status of these subjects, as in the temporary structure in which I sell, and greater time scale. The trend in the short-term temporary structure could be part of the range in the longer time scale, a range of short-term temporary structure could be consolidation in the big trend. It's not so rare, your ideas on the objectives for the trade position will continue to arise from the evaluation of larger temporary structures.
Correct way to identify impulsive transaction - it is the absence of a well-planned exit. Ninety per cent of effort expended at the entrance to the market, because the purpose of trade is to be on the market, rather than a profit. Impulsive trader looking for action, not results. As a way out of the market relates to the termination of, the base is it rather quickly.
On the contrary, a reasonable trade includes several components:
1. Assessment of current price developments: the pressure of customers increases or weakens, the pressure is increasing or vendor contracts, price volatility increases or decreases?
2. Assessment of the market in the short and long temporal structure: growing trend or trading range is limited?
3. The purpose for the transaction: the movement to the new maximum / minimum, with the development trend, the movement to a certain price value when trading in the range.
4. Criteria for closing a position: the conditions that will convince you that your idea of trade does not work anymore.
5. The decision regarding the allocation of resources, trade: how much of your trading capital you are willing to compromise in this trade idea.
If progovarivanie out these five components before you make a deal, cause you to trade less frequently and make you trade in a different way than the way you sell now, it is likely that you will exceed the trade regime. Definitely there is something that can be called a sense of the market. However, this does not imply that the sense of the market replace the knowledge and understanding of the market.
www.brettsteenbarger.com
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