The balance between leading indicators and the delay

Joe DiNapoli - trading veteran with more than 30 years of market experience. He is also a strong researcher, an internationally recognized lecturer and a well-known author.

His formal education is linked with the electrical engineering and economics. His informal education was in the bunker, the so-called trade locations, fully equipped with electronics and communications equipment, where the majority of early studies, Joe.

Exhaustive research Joe displaced moving averages, creating their own "predicted oscillator, in particular, his practical and unique method of applying Fibonacci ratios to the price axis, makes him today one of the most eminent experts.

Joe has taught his techniques in the major financial capitals of Europe and Asia, as well as in the United States. Only in 1996. Joe DiNapoli taught his techniques to students in more than 23 financial centers around the globe. His articles have appeared in various publications on technical analysis in various countries around the world.

He was co-authored the book "The tops of trade in futures, the lessons of the masters in 1990, which recognized the Book of the Year. His most significant work to date is the book "Trading with DiNapoli levels, which has become the standard for students of Fibonacci trading techniques.

When Chuck Lebeo ( "Technical Traders Bulletin") asked its readers the names of successful traders they most wanted to be interviewed, Joe DiNapoli name sounds most often. Similarly, the "Atlanta Constitution" cited the work of Joe, referring to the "magic power" of Fibonacci ratios in the market. Joe has used this magic time and again on national television to make exciting and surprising accurate market forecasts, particularly for stock market indexes and interest rate futures.

As president of the company "Coast Investment Software Inc.", Located in Sarasota, Florida, Joe continues to develop "high" trading methods, using combinations of leading and lagging indicators of unique and innovative ways. He conducts a limited number of private tutorials each year at his trading room and he also makes his trading methods available to others via software and training materials on trade.

Would you like to have a trading method that gives you predefined entry levels, reasonably close to the point of stop-orders and pre-calculated for the purpose of profit as soon as you enter in the movement? Add to that a very high percentage of winning deals. This is not an empty promise - it can become a reality, with an appropriate combination of highly effective and leading indicators of the overall retarded trading methodology.

Almost every technical indicator is a lagging indicator. Moving averages, MACD, RSI, Stochastics - calling all of this, we are talking about retarded indicators. First, there is a movement of prices, then a little later, the indicator signals to buy or sell. That is why the indicators are called retarded delay or laggards. They lag behind market action. They give a signal after the fact. Leading indicators, on the other hand, tell us in advance where the market is likely to find support or resistance. Most traders who are trying to use the leading or leading indicators that look at various forms of perekuplennosti pereprodannosti or oscillators. Most oscillators, however, belongs to the category of coincident or lagging indicators. They can tell us when the market is at a point of resistance or support level, but usually they do not give us useful information in advance.

Traders reasonably consider the use of leading indicators is risky because few traders understand how to deploy a true leading indicator of the proper way to achieve the desired results. The secret is to achieve a proper balance, combining leading and lagging indicators for the time scales. If we can achieve this goal, we can think of the trade approach, which greatly surpass the results of the use of any of them individually. Let us consider the problem in more detail. Traders, as rational human beings, prefer retarded indicators, because they want to get a certain comfort level in monitoring the market is already in motion before you enter. Unfortunately, this kind of comfort comes from the change in prices. As soon as the indicator down firmly established in this area, every other player also sees the movement and each is approximately the same time. Those who provide the necessary liquidity to carry out the warrant traders selling on the retarded indicators should receive their profits, so just at this moment we are ready to recover. This recovery usually occurs in the zone, where players place their retarded indicators stop-order. As a result, trader, trading for retarded indicators may be right about market direction, but too often, his position will be closed to stop the order before the market goes to where he had thought. So, how can we get out of this situation? Buy at pre-calculated levels fall during a rising trend. Sell to the pre-calculated levels rise during the downward trend. We define the location of these levels drop, and rises through a highly leading indicators.

In his trading career, I found only two leading indicators, which have the necessary credibility, justifying their use. First - this is predictive oscillator, which I created in the early eighties. It is a derivative of detrendovogo oscillator. He tells me one day earlier, where the market will find support or resistance. He does not tell me that the market will be traded at these points, it just tells me that, if the market reach them and there will be a significant support or resistance. The second leading indicator that I use and I have greatly developed, produced from an advanced form of Fibonacci analysis, called me DiNapoli Levels. By combining a lot of extensions and a unique way of recovery, the trader is able to advance is to determine exactly where the market is likely to find a good support or resistance during the subsequent motion. It does not matter whether they are at one minute or a monthly schedule - these levels are off everywhere. However, the problem with this is very accurate leading indicator, as with all the leading indicators is that it provides little value for the purchase of a support with a strong down trend, or to sell at the resistance in the strong upward movement, unless you're looking for opportunities for skalpirovaniya market in a very short-term transactions. That is why the trade you need a reliable analysis of the general mood of the market.

How it works:
First, define the overall mood of the market (context) to trade using indicators retarded. Then set the input level, using highly efficient leading indicator. Continue to use the leading indicator to locate the point of placing a stop-order. In the case of a rising trend, it must be less than significant level of support. In the case of the downward trend, the stop order should be significantly above the level of resistance. Please note - I do not use stop-order calculated in absolute value. If your stop-order is too large, on the basis of the criteria for the management of money, simply abstain from the deal. As a point of accommodation stop-order is known beforehand, the computation is easily done. As soon as the entry point and stop-order and installed, it is possible to calculate the target level for the generation of profit (with the help of a leading indicator). The warrant closure of the deal is placed on the market immediately after the computation of this value. Do not wait until the market reach there to see what happens next.

If you are using a high-leading indicators, the advantages of this type of trade is. You can achieve an extremely high percentage of winning deals. In addition, your order will be executed with minimal slippage, because you are buying from the depth, when the market declines and sell on the rise when the market rises. If you sell, using the size of management positions, then this approach gives a huge advantage compared to the introduction deals with overcoming a certain level.

Are there disadvantages with this approach? Of course! It takes some experience to learn how to use this method. For example, the market approach, which you use to determine the direction of the market, pointed to the strong upward trend. You buy when falling within the ascending trend, but you place your order at the entrance is too conservative, at the level of support that has not been achieved. The market moves with you. If you do this repeatedly, and you're right eight times out of ten on the market direction, then your order will be executed in only two cases - when you are wrong! This may be, to say the least, unfortunate and underscores the need for accurate and complete knowledge of the use of high-performance of leading indicators, that method worked. Another problem arises when you take the goal of profit. You reach a clear level of resistance and close their positions, and the market continues to go further. If you are not disciplined trader, then you can go directly there and then in the market as soon as the market will make a serious correction. This problem can be mitigated, if you sell a few lots. You can always leave some of them open. I tried this approach and found that a shift to all positions in the pre-defined logic for profit is always better for the final result.

Another method, which you can use to locate positions on a strong bull movement is to re-enter the market at the rollback of the levels of support at lower time scales. Let's say you moved from the position of full-time on Tuesday, and you re-enter at the half schedule on Thursday. What is interesting in this approach - that even if you re-enter the market at a higher price, then you can be at a safe level. This means that statistically you are less vulnerable to the adverse variability, which could activate your stop-order and compel you to take a loss. This approach allows you to manage risk, not raising your stop-order to the areas where they may be vulnerable!

As a rule, I am looking for my retarded indicators or overlapping indicators at the higher time scale. I then combine this with my indicator of leading indicators at the lower temporal format. For example, a full-time model, which I use as the installation to go into a long position that has just been formed. I will watch the time (or smaller) schedule to calculate the exact entry point and stop placing orders. Depending on the nature of retarded indicator, which provided the context for the transaction, I determines the effectiveness of the market. Then I will use pre-calculated for the purpose of profit or time or full time schedule to the point of exit. The approach works equally well when using a half-schedule as the installation and transition to a five-time to analyze your leading indicator. If you sell large positions on a monthly schedule, you can check the daily analysis to determine their input, output and profit goals.

Lagging, and coinciding indicators that I use to determine market trend - the movement Moving averages, MACD and Stochastics combination, as well as a number of pricing models 9. The only leading indicators that I use as I have said, are predictive price oscillator and a special, advanced form of Fibonacci analysis. The more accurate will be your retarded indicators, the better your results will be. The more accurate your leading indicators, the better your results.

Now let's look at different types of traders to see who is best came to this approach, but who would not be able to successfully use this method of trading. Let us fund manager, has in the management of more than five million dollars. Such a trader can afford to diversify their portfolio on a broad spectrum of markets and to hedge their transactions on a variety of systems. It has assets in order to take market downturn (as the smaller trader can not afford it) and he can hire helpers to not be tied to the market all day - maybe he does not need this approach. On the other hand, let's take a trader with a score of 25.000 $ to 50.000 $. This is often an individual trader who is trying to earn a living, trading in the market. He often needs the income from which he can pay for their accounts. It may be need the support of his friends and family to continue this work. His wife can be hard to understand explanation of the 30% ratio of wins and the first significant loss in two months, even if the profits in the third month, outweighs the loss. High accuracy of the trade plan, which shows consistent gains, avoids this problem. This helps ensure that he was looking for opportunities for more effective interaction with the market.

Another aspect is a brokerage service, which may be available to him. Influential Communications, which is able to build a large trader is not available to small-scale trader. We all know that a lot on the S & P is considered in a different way than 10 or 50 lots. Therefore, for small traders may be especially attractive market to warrant pre-defined price levels before the market will be there. For the purposes of hedging, this approach may be finding. You eliminate the need for context. All you need to do at this point - it's easy to look where you are on your leading indicators. Act, or wait, as the numbers dictate.

Typically, mixing and retarded the leading indicators are not suitable for strict nesubektivnyh trading systems. This, however, is ideal for traders who use a certain level of discourse in their trading operations. System traders should be on the market constantly, watching for signals, so as not to miss a great movement that will cover their losses. It is very difficult for individual traders. However, an approach that gives the highest percentage of advantageous transactions, and which by its nature is subjective, can be successfully used if desired, regardless of the seasonality and other factors. In the end, there is not so in the first place most of us are selling?

Forex Magazine
based on www.tfnn.com

Price zone

Carolyn Boroden, Advisor to trade on commodity markets and the technical analyst. Expertise: Synchronize selection price and time on the market.

Carolyn Boroden an adviser on trade in commodity markets and the technical analyst, specializing in the analysis of Fibonacci time and price. She specializes in "synchronization" or merger ratios as price and time, which ensures a high probability of successful implementation of intra-day transactions with relatively low risk. Carolyn Boroden has been involved in trade with 1978. She worked at the major trading floors including the Chicago Stock Exchange, Chicago Mercantile Exchange, the New York Stock Exchange and the COMEX.

Carolyn also conducted seminars for four years on advanced trading techniques using Fibonacci ratios, both on the time axis, and at the price axis of the market. Currently, Carolyn Boroden operates an advisory service for "day trade" of Skotsdale, Arizona, which includes regular updates on the Internet in real time and live commentary. Her service specializing in S & P, but includes many other market indexes and U.S. Treasury bonds. It conducts its own seminars on trade during the year in various U.S. cities.

Most traders hear about the use of certain Fibonacci price relationships (such as levels of recovery) to help determine potential levels of support and resistance on the market. Many traders, however, less familiar with the concept of "groups" of these levels, and other price ratios to determine the commercial installation to enter the market with a high probability and relatively low risk.

For the purposes of this trading strategy, trading system on entry occurs when a trader sees a convergence of at least three Fibonacci price relationships that come together in the relatively narrow price range. This coincidence of price relationships determine a key price support or resistance zone for a potential trade entry.

These Fibonacci projection will be made from the "core" of maxima and minima of oscillations, obvious at a certain schedule, which we analyze. It takes some skill to select the key maxima and minima, which would be suitable for the creation of these groups. To find the "group" relationships, we use a price recovery, the price of expansion and projection of all the key Fibonacci maxima and minima of oscillations at a certain schedule.

To make these projections, we use the ratio defined by the Fibonacci series. The ratios used most frequently: 0.382, 0.50, 0.618, 0.786, 1.00, 1.272 and 1.618. From time to time, we will use the 0.236, 2.618 and 4.236 as the ratio, to confirm the other levels.

Once we have identified one of these price structures, we use the signals to enter the market to a certain price zone Fibonacci. Please note that many of these zones are violated every day. That is why we use the signals to enter the market. This increases our chances of success.

If the zone is not going to kept, the length of time you will not see a signal at the entrance to it. When we see a signal to the zone, and the transaction is unsuccessful, our risk is extremely well-defined border zone (Stop orders can be placed higher or lower extremes of the zone.) My favorite signal for the entrance to these zones - commercial channel index (CCI ). Some people may prefer to use other tools to get the signal.

Let's look at some examples.

The first example - a 15-minute schedule of S & P E-Mini. Once we got over all the possible combinations of price ratios, "zone" is established within the boundaries of 1132.75 - 1133.50. This zone includes at least three Fibonacci price relationships. Min was formed at 1133.25, which was accompanied by a good rally to the handle at 1139.00 (see model "cup with handle" at number 34).

The following example - a 15-minute schedule ES. We have a match, at least four Fibonacci price relationships in this example, in the range 1118.90 - 1119.50. The actual minimum was set at 1119.50. We have received a signal to buy against the zone from the 3-minute schedule.

This is an example - a 5-minute schedule minikontraktov Dow. We saw a good price a group of 10,272 - 81. The actual minimum was shown at around 10280, which was accompanied by impressive for the market rally.

Our final example is a schedule EURUSD. We have seen that, at least three price ratios are combined in the range of 11810 - 13. The actual minimum was put at around 11,812.

Again, remember that the price zone does not always work. In fact, many of them destroyed in a day, with only a pause. When you combine these areas with your favorite warning mechanism, serving as a filter, your chances of success greatly increase.

Forex Magazine
based on www.screamingquote.com

On the other side of the entrance

Joe DiNapoli, president of the company "Coast Investment Software, Inc." Expertise: Although his methods can be applied in all time scales and in all liquid markets, Joe is most preferred inside - the daily trading on the stock market indices. He began to sell, since the index was introduced S & P in 1982.

Joe DiNapoli - trading veteran with more than 30 years of market experience. He is also a strong researcher, an internationally recognized lecturer and a well-known author.

His formal education is linked with the electrical engineering and economics. His informal education was in the bunker, the so-called trade locations, fully equipped with electronics and communications equipment, where the majority of early studies, Joe.

Exhaustive research Joe displaced moving averages, creating their own "predicted oscillator, in particular, his practical and unique method of applying Fibonacci ratios to the price axis, makes him today one of the most eminent experts.

Joe has taught his techniques in the major financial capitals of Europe and Asia, as well as in the United States. Only in 1996. Joe DiNapoli taught his techniques to students in more than 23 financial centers around the globe. His articles have appeared in various publications on technical analysis in various countries around the world.

He was co-authored the book "The tops of trade in futures, the lessons of the masters in 1990, which recognized the Book of the Year. His most significant work to date is the book "Trading with DiNapoli levels, which has become the standard for students of Fibonacci trading techniques.

When Chuck Lebeo ( "Technical Traders Bulletin") asked its readers the names of successful traders they most wanted to be interviewed, Joe DiNapoli name sounds most often. Similarly, the "Atlanta Constitution" cited the work of Joe, referring to the "magic power" of Fibonacci ratios in the market. Joe has used this magic time and again on national television to make exciting and surprising accurate market forecasts, particularly for stock market indexes and interest rate futures.

As president of the company "Coast Investment Software Inc.", Located in Sarasota, Florida, Joe continues to develop "high" trading methods, using combinations of leading and lagging indicators of unique and innovative ways. He conducts a limited number of private tutorials each year at his trading room and he also makes his trading methods available to others via software and training materials on trade.

The methodology that we are going to present, is designed to appeal to the entrance to the market with an extremely safe and minimal risk. I am sure that the money in the trade should be made after proper entry. If you go right, then your position is not likely to be closed to stop the order before they start to grow, as you intended. If you enter the market in the right direction, but for the wrong price, then your position can be closed before the market goes your way.

To prepare the ground for the application of this non-traditional trade strategy, it is necessary to make some assumptions about how markets behave. If you do not agree with the assumptions, the methodology would be meaningless, and you should not use it. Also, would like to see any trader who attempts to use these strategies have been at least a year of active trading experience. The three-year period, even more preferable. You should also have good knowledge of traditional use of indicators Stochastics and MACD.

The reason for this could give an example of how the legendary Jack Benny plays the violin. He could play the violin for non-traditional, to obtain such results, which he wanted because he knew very well how to play the violin in traditional way.

The assumptions with which we begin:
1. Markets do not often rampant trends.

2. Markets include a series of measurable actions and reactions.

3. Buying or selling at the breached is quite a dangerous way to trade.

4. Buying a drop in the upward trend and sell on rises in the descending trend is much safer way to trade.

5. Using the predefined goals of profit guarantees a high percentage of winning deals.

If you agree with the assumptions 1 and 2, you can see how obvious assumptions 3, 4 and 5.

Rules regarding the use of indicators DiNapoli Preferred Stochastics and MACD DiNapoli will be the following:

1. I'm using DiNapoli Preferred Stochastics and MACD DiNapoli only as a defining trend of instruments. I do not use them as oscillators perekuplennosti / pereprodannosti or momentum indicators. For this purpose, can be used much more effectively Detrendovy oscillator DiNapoli.

2. Alert ascending trend in any indicator served fast (blue) line across a slow (black) line from the bottom up. Alarm sales served fast line crossing the slow line from top to bottom. Situation lines on the scale of the indicator is not important, but the angle of intersection plays a major role. The more acute angle will be and what it will be closer to 90 degrees, the better to determine the quality of following this trend. (see Figure 1)

3. Some software packages are in the presence of the above indicators (such as proposed by eSignal). In others, they can be programmed independently. This should be especially careful in order to achieve the required accuracy.

The idea behind this pair of indicators is quite straightforward. DiNapoli MACD is a strong indicator to determine trend, and DiNapoli Preferred Stochastics deliberately weakened determining counter-trend movement. As an example, let's take down the trend, some using MACD, as shown in Figure 1. The blue line does not cross the black line. In addition, we have the upward movement, as defined Stochastics. This upward movement occurs in the downward trend. Movement limited DiNapoli (Fibonacci level of recovery), where we can sell, because the MACD supports top-down trend.

In practice, the DiNapoli Preferred Stochastics of great assistance in determining what level of restoration selected in the implementation of the entrance. You can see that, even if the DiNapoli MACD fast line has crossed a little slow line, the angle of intersection would not have been close to 90 degrees. While the level of recovery keeps the market, you can hold the position. If the restoration of broken down but the trend remains intact, you can still hold the position!

Figure 2 is an example of "Intel corp.". Time scale on the graph - 30 minutes, although the strategy will work for all commonly used time scale. The method may also be applicable to all liquid markets, including the stock market, futures, Forex, etc.

Figure 2 shows two reduction of opportunities for shopping. They were represented by traditional signals "sale" on preference Stochastics DiNapoli, while the rising trend in the DiNapoli MACD remained intact.

Figure 3 represents a 5-minute e-mini. As signals are buying or selling signals show use the same methodology. Investigation of the effectiveness of this approach in the past may be unreliable, because the indicators of modernization in real time, and what you see on the historical graph, is the last indicator, calculated on the closing of the bar, rather than for each segment of the bar, as it is constructed with Each tikom. Point A, for example, is preferable to Stochastics DiNapoli filed signal "shopping" in real time.

The strategy becomes even more effective when the time periods overlap markets - those in which the main movement and those which arise only minor restoration.

You could, for example, to sell at all, "traditional buy signals" on the 5-minute Stochastics DiNapoli Preferably, when the half-DiNapoli MACD points down on the sale. Possible combinations almost endless, which is another advantage of the methodology. You will not do the same, which makes another trader using the methodology, if only he did not choose exactly the same time periods, and reversals in which you operate. Your stop-order and will not be grouped because the stop-order is established in the light of more distant recovery, or if the DiNapoli MACD in the chosen time scale goes against you. Of course, this assumes that you can manage this risk in accordance with the parameters of money management.

After you put your transaction, you then have to select the appropriate logical target for revenue determined in accordance with the analysis of the expansion.

Getting profit with the "safe" interaction with the markets, as appropriate, using the reaction in the trend is the fact that directed at the methodology.

Forex Magazine
based on www.tfnn.com

3 Stage Trader

Every new trader, or those who received energy to be successful, must understand that the road ahead is not easy and it is not like a fast, exciting trip. The way that they will be, filled with daily challenges, which will check their skills, both technical and psychological. In fact, most traders can not pass the initial stage. They have not been able to learn:

. Accept the loss
. Being wrong
. To succeed, they must spend the time required to study this!

One established fact, which is spoken by all successful traders, including Borselinno, Fisher, Jones and others, is that to become a successful trader takes time. Borselinno said that at least a year, Fisher said, perhaps 2 years, but they all say that this business has nothing to do with instant success. And just the opposite: the most successful traders say that survival is the first key to success. Expressions like "Love to take the loss" or "Keep losses small," all refer to the fact that, indeed, we need to survive, to flourish.

As a business - a consultant, I often agree to work with business owners, top managers and those who decide to offer them fresh ideas about the business - procedures. For many years, I have documented a cyclic model of types of businesses as they develop. Here in this article are some identifiable characteristics of 3 stages that I have identified and described as they relate to the type of business such as trade.

Typical of many stages of initial stage in trade:

. Traders lured a lot of money
. I feel a low barrier to enter the business
. Susceptible to the influence of advertising on Equal Opportunities
. Look what others had done so
. Read some books
. Attend several seminars, and receive all that is available on the Internet
. Has some speculative capital
. Traded
. Wins
. Lose
. Lose
. Find that the correct tools are needed, but I think that they can not allow ourselves
. Think "I should try something more complicated, even if that does not understand that just tried to do, no tools, no trade in general
. Lose more
. Understand that really needs to work on "planning" and how to change their emotions from the enemy for their own ends in the direction of a powerful force that will guide their actions. Finally, understand that good to take a loss (in fact, they find that it was the first lesson that is needed to learn to survive!)

Survival in fact is the goal for the initial stage. So, then they are trained to go to the stage of growth.

Typical stages of Phase Growth in trade:
. Traders are trying to get the appropriate education and proper equipment
. Indeed some things are exploring
. Plan their trade
. Trade with better results
. Decide to complicate the sale of unknown reason
. Lose patience
. Lose
. Simplify again, improve their methods
. Understand the importance of patience in the trade
. Beginning to take greater risks
. Punished by the market stronger than ever before
. Now have a problem with pressing the "trigger" when the signals are clear
. Beginning to understand the importance of discipline
. Reveal the mechanics of trade
. They study the life cycle of trade
. Stabilize their capital as planned, using strict money management
. The cases are better
. Beginning to actually take responsibility for their own actions
. Cease to look and begin to concentrate.
This is the key to the transition to the stage of maturity.

Typical stages of maturity stages in Trade:
. Traders are patient in their efforts
. Become disciplined enough to trade in line with its plan
. Understand leverage
. Practice strict money management
. Take fewer risks, preferring to use the amount to a strong signal
. Learn how to deal with a huge dollar profits, but to stick to its plan (return on investment against time for money)
. Learn how to deal with the huge dollar losses, but stick to its plan (return on investment against time for money)
. Really understand the life cycle of trade and may accordingly plan their trade
. Allow time for education and study
. Now the trade is happening on autopilot, selecting the best deal to pay for risk
. Make their top priority in its trade plan

The fact is that many people were on this path, but very few have succeeded. I think it would be prudent to go on that road, knowing in advance the natural trend of development progress in this business, and how you can prepare to improve their chances by using appropriate tools and education, as well as a serious plan each stage.

Forex Magazine
based on www.screamingquote.com

Psychological preparation of the trader

Think in terms of probabilities "probable inability to be preferred to improbable possibilities"

Aristotle

You have the power when you think categories of probabilities. Probabilities give us opportunities. Without the opportunity we just run the risk of haphazard. And luck would not continue without prejudice to this construct. We must create our own luck. How we do it? We think the probabilities of the categories, and develop approach to analyze and trade in the market, which puts the likelihood of compliance with our trade.

Then, the probability is not certainty. Probabilities, simply, is likely to occur. Yet, should we think the probabilities of the categories. Why? Because, that's all we have.

We could turn to psychics. We could turn to astrology. We could appeal to divine intervention. We could, and some of us do. Our trade is in the hands of fate or God, guesswork, or probabilities. I prefer to probability. Even if they are not always sufficient probable. "Not always is the key word. The models emerge, but not always. Systems work, but not always. Fundamental factors dictate the price, but not always.

Relax. If it was always, the game would be finished. There is no such thing as tomorrow's magazine "Wall Street" today. That is why trade on insider information is a crime. Insider information is predicted, but not always. Even the offense did not give full confidence.

What can we do? Accept the fact that we have. Think categories of probabilities, and act in accordance with them. Permit likely to be sufficient for you. Moreover - Be thankful for them. Probabilities in the end, probably.

Successful traders think the probabilities of the categories. They put themselves in line with the probabilities. They share them. Low probability. It is quite probable. Highly probable. At a high probability of a transaction, they risk more than the low probability trade. This is where the management of their money or to choose the size of the position.

We must accept our limitations and the limitations of our craft and art. We should be comfortable with some predictions and interpretations. We must trust the protection of probabilities. Then we can go with that now exists, and likely to trust the predictability of our techniques.

Successful traders keep themselves out of trouble, thinking types of probabilities. If you know that the transaction is likely to make money, you'll go ahead and run it in an appropriate manner. Why not? It is probably going to make money.

On the other hand, if you know that the trade - this is just the chance, you put a protective stop order. Because this is only likely to remember you about other opportunities. This may be a losing transaction. Therefore, you protect yourself.

Probabilities keep you in a balanced mental state. Reflections categories of probability is the very antithesis of meditation classes undeniable facts. Remember that there are no certainties in trading. Thinking types of probabilities, you hold your perception of sound, to evaluate conflicting indicators or information. Clarity of perception keeps you in touch with this reality. You will not tell a hypnotic tale of what should happen or is going to happen. There is no room for self-deception.

Reflections in the categories of probabilities lets you tie your ego to trade. Because any decision - this is just the probability that there is no great achievement, if you win, and no great failure if you lose. As you kontsentriruetes on the probability, you connect it to the market, rather than a direct. The moment when you begin to consider the market in the relationship with them, you find yourself in trouble. First, you have distorted his vision. You can not see what is right in front of his nose. Secondly, you have biased their assessment. Your trade is too important. When the trade is too important, all kinds of distortions and difficulties increased. You are trading in order to prove their own value, rather than making money.

Probabilities - it is your strength. That's all that you have, but this is enough.

Learning from mistakes

"Trader only rarely makes a mistake. If he makes one, he usually makes the second. The second is destructive."

Adolf Raynshtayn

There is an old saying that it was not a mistake he who does nothing. And this is true. Errors inherent in the implementation of something, and, of course, are an essential part of studying the implementation of any process. You learn to walk, not falling? Ride a bike for the first time, did not hesitate? Of course not. Also, you can not learn to deal effectively, not making mistakes.

It is important to learn from their mistakes when trading, when they occur. You make a mistake, and then you make adjustments. Perhaps you've done wrong and need to make adjustments to re-adjust.

I take the error as a feedback. Any action produces results. Since the trade - this is a series of perceptions, thoughts and actions, we get continuous feedback. Our results speak to us through a period of time, working or not what we do. We must keep open its view that imprisoned their skills.

Some traders are so afraid to commit an error that did not sell the relevant situation way. And this is one of the worst mistakes that can make a trader.

Other so ashamed of errors that can not recognize them. If you can not admit a mistake or do not take responsibility for the failed operation, you can not learn from this mistake. This leaves you vulnerable to repeat exactly the same error.

Ultimately, what distinguishes winners from losers - the ability to learn from the mistakes and the discipline to stop repeating them. Already more than once stated that, an amateur from a professional experienced distinguishes fact that a professional, just make fewer mistakes.

And how do we do less mistakes? We recognize and acknowledge mistakes when they occur. We practice, going forward, without repeating the same mistake again.

According to Roy B. Longstrit:
"Let us not make the first error. But if we do it, let's avoid making the second exactly the same mistake. The first can teach us. But the second is killing us."

Learn trading

"Our greatest achievement is not to never fall, but to get up every time we fall."

Confucius

You learn from their mistakes in the trade? If not, you pay too high a price for them. One of the costs if you do not learn, is that you repeat the same mistake many times. Another cost is that you learner errors, and makes them part of your personal trading. You can even begin to consider themselves as losers.

Not every loss is a mistake, and not every error is a loss. We must make a distinction between loss and profit and a mistake and a mistake. The losses are natural in the framework of trade experience, and profit. We just accept it and move on. Every trader makes mistakes from time to time, but not every trader to identify them, and not every trader is learning to them.

For the discriminating trader error is recognizable. You have made a simple mistake, such as purchasing, when wanted to sell, or have forgotten to cancel a stop-order, when the came out of the market? In this case, your training must concentrate and pay attention to its procedures for testing or other protective measures.

You may load position. Then, you must develop some basic principles in order to adapt the size of the positions. You may have incorrectly interpreted signals. Study on this. Perhaps your system does not work on certain types of markets. Develop a new rule for cases where you will be using this specific method. Perhaps you made a deal, is the momentum when reading someone's advice or listen to your broker. Install a set of probabilities, only that you'll follow.

Pay attention to the difference between the new study and a simple reaction. A simple reaction to the latest deal throw the probability in your trade. For example, if you took profits when the market had reached your goal, but the price has gone further by your goal, then you will be tempted to allow the next transaction to go. However, in the next transaction price can only achieve the objectives and turn back to the loss. What you need is to be always consistent, closing the position when you reach the goal of profit, or always allow the price to rise until the market closes you. The study is not a simple reaction.

When the sale does not go as you planned, very often there is one way to make your trading better. Constantly ask yourself, "What can I learn in this situation?" It is possible to learn from success - ask yourself, "what I did that so well?"

To learn from the mistakes that you should be willing to accept them. More easily recognize the mistake, when you stick to the relationship that mistakes are acceptable and a natural part of the study and development process. For the benefit of improvement, do not expect that you will be perfect. Let yourself explore the process through trial and error.

Look for each error. Once you've made the lesson from the mistakes keep this lesson and go forward. Leave this mistake in the past. How do you do? You forgive yourself.

Good and bad ideas

"What was once thought, it is impossible not to think."

Friedrich Durenmatt

What are the thoughts you attend at a time when you sell?

If you say to yourself, "just could not lose, you can cause a loss or at least miss the opportunity. Remember, trade - that capture the opportunities and take losses, even when you keep them small.

If you say to yourself, "I can do a lot of money here, you will probably overload the position and will likely finish with big losses, too, in accordance with the principles of managing your money.

You tell me about a specific market-based instruments - it should go down because of something and that something, it should rise because it is so. These thoughts, and affect your views and encourage them in some way.

You say, "I do not believe this!" If you do not believe you detracts from the fact that you clearly see and what happens in reality. This approval is valid as no red flag saying to you, where you could go wrong.

You ask yourself, "What if I'm wrong?" This brings your imagination to the consequences of being wrong. When you start to feel defeated before you even started to sell, you'll be inclined to skip the transaction, and will feel terrible, when it later proves profitable.

You volnuetes about the fact that your boss will think, broker friend or family member, if you lose? Such thoughts may make you hesitate at the entrance to the market or fixed income too quickly.

The ideas are good and bad, are a powerful force. They affect your perception, your interpretation of the situation and, of course, your actions. You must control your thoughts.

You can do so at the end of the trading day, when you look at the deal. What do you think, when entered into the transaction or were unable to enter into this or that transaction. What do you think, when he lifted the stop-order, double position, or had withdrawn from the market. What would you like to think in such situations tomorrow?

It is best if you can catch yourself when you are about something to think that would deter you from your best trading position. And you can completely change it on the spot. If you hear a remark, "What if I lose?" Change it immediately to the "what if this transaction will bring me more profit?" If you hear a phrase, "the market should turn." Revising it to "the market has shown me now?" or "what is the probability in this situation?"

Who manages your opinion? You. And you can learn to manage their opinions to support their trade.

Winners and Losers

"Winners and losers themselves determine. But only the winners are ready to admit it."

John Vuden

Trade - a victory. It is sort of consistent victories over time. This is like a slowly rising curve of increasing capital.

Trade - is also a loss. As a trader, you must accept the inevitability of loss. When you have a psychological victory for the installation, you are considering trading losses, as a minor and a natural part of the game. Some losses to trade no more important than the loss of a few points to your opponent in tennis or basketball. Even a long period of decline, as a wake-up call, can be considered as a temporary situation. You can be the winner even when you're a loser.

Adoption of the losses is an integral part of trade. Traders who seek to avoid losses, finishing up losing. Or they miss the deal, being unable to click on the "trigger" or they will lose because they refuse to recognize a losing situation where they are in it and they will not be able to reduce their losses, while not received great damage.

Losses happen. I have. You. Do the best traders. It's a simple reality of our business. This is the price of this business and it should be taken into account in the shopping budget. This is like the rent or the cost of equipment trader.

Chronic loss, however, are not part of a winning game plan! Ask yourself, "whether I am a net winner or, still, I am a net loser, since I started to trade?" As you walked in the case last year? How did they go this year?

If you were a loser, you should analyze the cause of the loss. Is this happening because of bad strategy? Does your entry into the market of a problem or your exits are an obstacle? Or both? Maybe the problem is managing your money? Or the problem is lack of capital? This is your personal identity or psychiatric unit, which leads to repeated losses?

If you lose, sit down before you continue to sell and make analysis that does not work. You should stop doing what does not work. Try to see what works and do more than just that. Check what might work.

Requires courage to face the facts. Be a winner, taking responsibility for the weakness of their trade. Find a teacher or a tutor if you need it. Remember the words of John Vudena - "Winners and losers themselves determine. But only the winners are ready to admit it." What happens if you can learn to think and act like a winner?

The ratio of the successful trader

In his work with traders, I have noticed that there are certain attitudes, certain attitudes, certain habits of thinking that are the norm among successful traders. Typically, this relationship is not perception, is not something that traders from all the forces are trying to achieve, although the traders are really working on learning. Mainly, I learned that successful traders naturally form an opinion about trade.

Successful traders come to trade with a benevolent spirit. Their relevance to the key aspects of trade work for them. And if it does not work, they change it. Their winning mental approach is so consistently maintained that it becomes a normal model of thinking and acting.

When attitude becomes a habit, we can call this a normal attitude. The attitude that has become routine, and then becomes natural.

For most traders, but such preferential treatment does not come by themselves. They need to explore, develop and maintain, yet they do not become routine. In his new book recently published "12 habits of very successful traders, I explore the effective treatment of trade and shows how changes in the relationship increases every other relationship. I identify ways to develop these habits.

What habits for a successful trade? I chose the twelve.

First. A successful trader is willing to trade. The methods tested. Home work is finished. Precautions taken, and all checked. Trader himself mentally and emotionally ready to trade.

Second. A successful trader away from the results. He thinks the category and believes in the validity of the process. He realizes that he himself more than his trade. It does not bind his fragile ego with the results of any day or any transaction.

Third. A successful trader is willing to take the loss. She understands that a loss - it is an integral part of the trade process. He does not like losing. He does not expect losses. It just takes a loss as costs for maintaining the business.

Fourth. A successful trader naturally manages risk. He is taking a risk. He was willing to take risks to win. He may even find the risk of stimulant. This keeps it in the tone and at the top of their game.

Fifth. A successful trader thinks the probabilities of the categories. While he may have some prejudice in his life when he begins to trade, he understands that did not know anything for sure. All that he has - it is probable. And the probability is more than enough.

Sixth. A successful trader feels comfortable in the face of uncertainty. He understands that the future is not known, and accepts the fact that he has only probability, and no certainties. He has no needs to be right. He understands that the desire to be right or there is no perfect place to trade. Therefore, it is flexible.

Seventh. A successful trader has a long-term perspective. He was willing to lose in the short term. Recession seen as temporary. He remains optimistic about the future, while it maintains a realistic attitude to the present.

Eighth. A successful trader has the attitude of abundance. The deficit has nothing to do with his attitude. He sees the market as the river of opportunity. He understands that the market does not care about the ocean, you will come to him with a bucket or a tea spoon. He knows that will always be able to recover from any downtime. He expects and creates a lot of wealth and opportunity.

Ninth. A successful trader is an optimist. He is realistic and honest here. He is optimistic about its future trading. His optimism gives him confidence and courage. It supports it, to avoid becoming a victim of fear and other emotions.

Tenth. A successful trader has impartially relevance and clarity of thought and perception. He wants to listen to the market and is sensitive to the changing whims of the market. It is this attitude that anything can happen, and he will be able to act in accordance with what actually happens.

Eleventh. A successful trader is brave. He is willing to act in the face of uncertainty and potential losses. This does not mean that he knows no fear. He feels the fear and act anyway. He has a healthy attitude to the market, and he balances on this regard with a certain courage.

Twelfth. A successful trader disciplined. Discipline gives effect to those things which should be made to move him to his goals - regardless of whether or not he feels this way. He does what he intends to do. His actions support its objectives. His goal is to make money from the sale. He is doing what must be to win and he does it the right way and at the right time.

If any of these familiar patterns of thinking is missing in your approach to trade, then you can degrade your results. Your thoughts are your strength and you can change your thinking.

Forex Magazine
based on www.marketmavens.com

Models of market success 2

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.

In a recent study published in the New York Times' David Leonhadtom invited to an interesting analysis of how athletes are able to take difficult decisions in fractions of seconds.

Let's look at some examples:

? The player who discourage the ball in baseball, should discourage the filing, thrown at speeds over 80 miles per hour. Filing is sent directly to him in the head. If it is twisted the ball, the filing may be far to strike. In this case, to discourage the player to swing from side to side, standing firmly at the feet. If this is a straight fast ball, the ball falling into the player and hurt him badly. For a few moments, discourage the player must evaluate many factors to decide whether to stay in his area and discourage sway or bend, and defend itself. The speed and rotation of the ball, making the movement of the hand, making knowledge of the style - everything must be taken into account when deciding that much faster than is possible in the conscious level.

? Colonel John Boyd studied the behavior of the best military fighter pilot, and came to the conclusion that during the fighting with the enemy planes, they take difficult decisions in a matter of seconds. He described the decision as an observation, orientation, decision and action (NORD) and was convinced that the key to the training of pilots is to accelerate NORD elements, so that pilots can respond more quickly and accurately than their opponents. Being himself a pilot-class, Boyd was known that he could start with the uncomfortable position in the air and being behind a driver who threw him a call within 13 seconds - a challenge, obviously, it will never skip.

What is interesting for us, these examples? Those that experienced singer is faced with a high degree of uncertainty. There is no way to predict in advance whether to throw a player in baseball feeding one type of filing or the other, and there is no way to expect the following actions by the enemy in the air. Once the appropriate situation arises, as there is no opportunity for calm, rational reflection on the situation. Subconscious to assess the baseline factors and take the best possible solution before going on any conscious reasoning.

How can that be?
Here is an excerpt from an article in The New York Times, which describes a recent study: Each participant experiment sat down and put his hand on the table. Designing a computer screen does not allow them to see the hand. The aim was to keep the cursor, which followed the movement of hands, from one side of the screen to the goal on the other side. Adding uncertainty, the cursor usually appeared slightly right hand, and participants saw in a quick flash of him when he was half-way when crossing the screen. Sometimes, the cursor appears as a discrete point, in other times, it was a vague cloud. Researchers found that when the cursor is not displayed, people relied on the experience gained during training before the experiment - namely that the cursor was, on average, one centimeter to the right of the hand.
When broken out of cloud, they saw it, but only in part, in the model, which followed the formula Beysa. When the cursor is flared, they have relied on it, rather than on past experience.
"Most decisions in our life is made in conditions of uncertainty," said Dr. Kerding. "In all these cases, prior knowledge, which we have can be very helpful. If the way the brain works Beysa, the optimal use of a prior knowledge."

There are several important points in this study:
? to make their decision to participate in the experiment were in need of a long period of study. It took hundreds of practical exercises to enable participants to make accurate predictions of the location of the cursor. This is consistent with research on "implicit study, which showed that subjects faced with complex patterns during multiple training sessions, eventually, to study these models and can make predictions based on these models is much better than it would be with a random guess. However, surprisingly, that they can not be explained by these models are a logical way or the way they make their decisions. Their study is indeed an implicit, ie is completely subconscious.
? when subjects were faced with a new and questionable information, which is contrary to known models, they evaluated the new information complicated way that is consistent with the mathematics Beysa. In other words, the actors have given increased importance of new information over time, re-evaluate their position the cursor, which united a new, dubious information that they learned previously. It is also compatible with the implicit study. People can handle complex information, mathematical methods, even when they are not familiar with the complex mathematics!
? when subjects were faced with a new, specific information, which is contrary to the models studied during their training, they left their previous study and relied entirely on new data. That is, they were able to set aside their previous expectations and quickly create a new framework for decision making. This is not as easy as it might seem. People have a natural bias on the evidence that leads us to search for information that confirms our expectations and led to ignore the data that are contrary to what we believe.
? that is particularly interesting in this article is that the authors find that on the confirmation bias prevents people decide mathematically. That is, people just do not combine a new, dubious information from the old experience, as do the professionals, when they remain attached to their old expectations. This makes them too slow to respond to new data. Professionals same, thus not only able to take immediate, subconscious decision, they can also quickly review these decisions as the new data. Speed and flexibility are the signs of professionalism.

It can be very important findings for the short-term trading in this study. One of the key findings is that the distinction between intuitive controlled commerce and trade, based on the study may be much smaller than we think. Here is a remarkable conclusion that can be made on the basis of this study:

Our subconscious is a springboard for success! When the experienced traders examined thousands of cases of intra-day behavior of prices and indicators of their subconscious to be able to identify patterns of market noise, and they can not explain how. This is - implicit study. As soon as new information comes to the market, second to second, it brings the unconscious to the old
knowledge of complex ways. For example, one or two irrelevant overall analysis of information, one or a few ticks against the position does not necessarily make you decide to leave the transaction. However, as the inadequate information is collected, it changes the assessment of an experienced trader likelihood that the transaction will succeed. The deal begins to feel not as necessary, before a trader can explain what is wrong. This internal sense is very important, and it is not only subjective intuition. This is - the result of subconscious mathematical analysis!
When an experienced trader enters new information, which is obviously contrary to his expectations (such as sudden market reaction to some economic news), the previous study goes into the background. An experienced trader speed to get out of the transaction and to review expectations, rather than wallow in his bias on the need to confirm that now is in contradiction with the data.

What prevents traders become skilled performers? If Colonel Boyd can train pilots to analyze the actions of an enemy fighter pilot and perform rapid maneuver for 13 seconds, perhaps we can learn to accurately respond to short-term market model. So, we saw that according to the study, unconscious processing adds new information to the past to respond to changing circumstances. When the market, for example, changes its volatility, an experienced trader to join the new data with their experience, to expect that the direction of movement. It seems that the subconscious is able to perform the complex integration of new and old data to expected future events. This allows you to make an excellent performance with fast, stressful conditions, which do not allow for conscious, explicit processing.

Can such a subconscious decision to be trained? One of the articles devoted to training the elite of military officers, I found one possible model for the promotion of best execution. Perhaps we can also learn what some of the best athletes train and develop models to improve the performance of traders.

The study of sport psychology
What we know about the psychological factors that contribute to the success of the athletes? Comprehensive study shows several important components of best execution:
? setting goals? - More than 500 studies of athletes show that the goal contributes to meeting a variety of short-term objectives and long-term goals. Goals that are clearly defined, achievable, but requires sufficient effort and concentration on performance, rather than the result, are most effective. There is also evidence that the combination of short-and long-term goals, as well as group and individual goals, can increase the effectiveness in achieving goals.
? practice? - Large-scale studies of athletes, as well as professionals in other fields, shows that general practice is closely linked with the development of professionalism. This is especially true in situations where there is a study of implicit, requiring the acquisition of performance skills that can not be explained logically (eg, to learn how to beat on the tennis ball). A large number of practical classes, with immediate feedback may be particularly useful for the development of necessary skills.
? stress? - Studies show that a moderate degree of stress helps performance, while higher tension may lead to a catastrophic decline in performance. Recent results indicate that much more important, everyone sees their own strain rather than the absolute level of physical stress.
? Self? - Athlete confidence in their ability to achieve its goal very strongly linked to actual implementation. Belief in own ability to succeed is the single most important factor of identity associated with the sporting success. Studies show that exercises that improve the self, leading to improved sports performance, even when they are connected only with thou exercises, rather than with actual sports training.
? Mentor? - Recent studies show that the confidence mentor (coach) significantly and positively correlated with improvement in the performance of their athletes. Differences in style of training is also reasonably affect the outcome of sports, primarily through effects on the motivation of athlete.

How these different findings relate to research on the subconscious study?
The likely explanation is that the focused, intensive training with quick feedback, not only shapes the skills, but also increases in athletes self-confidence. This allows professional athletes to use the tension to facilitate, rather than obstacles to the execution, because the stress they are not considered alarming. The role of the coach is not so much how to teach the skills - because the skills of the implicit, but rather to create an environment in which skills can be maximized. This includes motivation, but also the conditions related to the efficiency of practical training.

It is also worth noting that much of this learning occurs in the command environment, including sports teams, military units and the business environment. Command environment helps with motivation, creating a favorable environment for learning, but also allows participants to learn from each other, watching the same yourself. The friendly competition between the teams also serve as preparation for real competition, zatachivaya skills in realistic terms of performance.

Conclusion
The success with which a trader can learn to read changing market behavior may be related to the quality and intensity of training, which he has made. Each study implicit study shows that require a lot of intensive training before an individual develops the necessary skills in this task. Most traders have failed, as I suspect, because they never gain the necessary number of intensive training necessary for the development of underlying skills. Without a command environment to simulate the development of skills and mentors to provide assistance to targeted training, the majority of individual traders will never be able to develop self-confidence necessary to withstand the inevitable periods of losses. This is particularly problematic for traders, trade on a partial basis, which may be short of intensive practice required for the skill, simply due to lack of time to understand market behavior, develop skills and use of performance feedback.
While many market by concentrating on the development of new indicators and methods for analyzing market data, it is possible that the most promising direction for improving the results of trade are the tools and technologies that motivate the study and increased its intensity.

Forex Magazine
based on www.brettsteenbarger.com