How to solve their problems

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 recent years, short-term therapies have demonstrated their effectiveness in order to solve various problems encountered in everyday life. Unlike traditional psychotherapy, which can take months or even years before the results show that these methods are often short-term help people to change the model of constant concern for just a few sessions. Even more interestingly, these therapies may be considered normal inhabitants, allowing people to become your own psychotherapist. This is particularly useful for traders, for whom as the saying goes "time - the money."

In this article we explore a set of methods used for the cultivation of positive behavior in the trade. Known as the "concentration on the solution, it is one of the most short-and the most powerful methods for positive mood on thinking.

How are problems

The cornerstone of the method of concentration on the solution is the idea that the problems are caused by the human consciousness: they represent the way we see ourselves. As an example, I can imagine a somewhat unusual situation: John is a trader on the futures market S & P emini. Losing it was a few days and in two cases, was unable to comply with its rules limiting the losses that led to the loss of profit a few weeks. The night before his last loss transaction, he slept poorly, which led to the following day, fatigue and disturbance of trade disciplines. The next evening, he vowed to get enough sleep well, but was upset poor trading day. As a result, he was unable to sleep and woke up more tired than before. Vzbodrivshis coffee, he vowed not to commit the same mistakes, but is now hovering at the conclusion of their regular deals. Proklinaya their sleep problems, he decided that would take a break and will fall to sleep early that night. However, this time he continued to replay missed opportunities in their daily head and began to worry that he never returns a normal sleep. Despaired, he one day led to his doctor and asked for assistance from insomnia. The problem, in terms of concentration on the solution is not simply that John can not sleep. Rather, he concluded in his consciousness that he suffers from insomnia, or has a problem sleeping. The construction of identity on the basis of the problem helps to maintain a lot of negative patterns of thinking, feeling and action. As soon as people hang on the label of "bad traders", "suffering from insomnia or depression are, they tend to react to the label, rather than on the initial difficulties. John begins with the destruction of normal sleep, which, unfortunately, affects his trading discipline. Instead, however, looking at your problem as the problem of trafficking, it defines the problem as related to sleep. Once he built a sleeping problem, it now becomes an object of concern and threat. Even the usual difficulty with sleep is seen as evidence of "his insomnia, the more convincing him that he has a problem that will undermine his trade. Therapists working on a method of concentrating on solving, emphasize that many difficulties in life with this quality samoukrepleniya. Statistically normal, but nevertheless unpleasant line of adverse events is seen as a new problem, which establishes chain of emotional reactions in the form of anxiety and depression, and leads to further consolidation of a "problem". Active traders are very familiar with this phenomenon when they are experiencing gains or losses of the band. Even the random results of trade, showing bands of consecutive wins or losses, even for traders like the players are the reason to think that they have a good band, or vice versa. Once they build a sense of successful or unsuccessful bands, they appropriately modify their trade, possibly increasing or decreasing the size of positions or entering into transactions that they normally miss. This leads them from the proven strategies, increasing the likelihood that the curve of assets will suffer.

Another way in which problems are constructed samoukreplyayuschimisya linked with the concept of "trends." The short-term trader opens a long position after appearing to be a breakthrough price and then observes that the market is moving, one, two, three bars in the opposite direction. At some point, the trader decides that the opposite movement is an indication of a new downward trend, despite the fact that the market is moving in a range, not distinct from random market noise. Now, the emotional response to it was built "a change of trend, the trader of their long position to see the markets higher after the consolidation of the previous break. The important idea, the proposed method for physicians to concentrate on the problem is that many of the problems that people complain about do not exist in reality. They are a by-product of the continuous search for the value of any developments. Even random events can be regarded as significant, leading us to the belief that there are problems, when in fact nothing has changed. As we shall see, this tendency to build awareness of the problem of chaos creates traps for people and traders, among others.

Why self-help methods often do not work

Traders normally work with a great credit leverage, and recognize the need to be at the top of the crowd. They are well aware of how emotional interference can create weaknesses in the discipline and the distortion of perception, leading to losses in trade. Therefore, many traders are interested in psychology and self-help techniques that can help them to maintain their concentration.

Of course, there are many such self-help techniques that can be a useful complement to the arsenal of tools trader. However, in terms of approach to the solution, the traditional methods of self often difficult trade even worse, not better. Let's investigate why this is happening.

Going back to our trader John, who is concerned about their insomnia and its impact on his trade, let's imagine that a psychologist will recommend relaxation exercises before you go to bed. Perhaps a psychologist may also prescribe a short course of assistance to help John to return to its normal cycle of sleep. Although it is acting techniques, often they will have unpleasant consequences. John returned to his psychologist to the continuing difficulty sleeping and even more powerful feeling that he has a serious problem.
The reason for obtaining the unpleasant consequences of a very thin but very important. By offering assistance to John for the normalization of sleep, assistants unwittingly bought its initial premise that it is indeed a problem. The more they talk about his sleep problem, the more they reinforce his view that this is indeed a real problem that exists independently of consciousness, John. This is particularly problematic in the long-term therapy, where the exhaustive discussion of past conflicts man helped cement the idea that man is, indeed, is in contradiction, and is concerned. In the end, what would your psychotherapist treating you out of your problems if you do not it?

Let us consider an example closer to the trade. Suppose that a mentor to trade offers for the "unsuccessful bands of their clients." Tutor can give advice on the unique strategies for managing money, protective stop-order, trade practices or methods of self-help to cope with these bands. All of this assistance, however, merely reinforces the basic idea that these bands exist, they are the problem and the need to adapt trade under these bands. As a trader, who went from long positions too early, after several adverse bars, a trader who is a few consecutive losses is likely to retain the attention of the trading system at the worst time for this. In terms of method of concentration on the solution, any help that you
looking to address this problem tends to reinforce in your minds, deepening it. Many of the problems began quite by accident, but it is not ridiculous, to support the efforts that we are taking to get rid of them. (see Annex 1 at the end of the article).

So what does a trader, a psychotherapist or commercial coach should do? Example with strips of trade offers, perhaps the most clear illustration of an additional strategy. Rather than refer to "rot", a mentor could help a trader to test his methods of trading. This identifies a band of losses expected, based on real market data. Armed with a specific set of expectations for a normal recession, periods of calm markets and sustained losses, the trader would be "vaccinated" against the propensity to over-interpret the events. Occasional adverse outcomes are not ascribed to a greater value than it really is.

Finding solutions: an additional strategy

Method of concentrating on the decision to avoid pitfalls noted above, the purpose of reviewing assistance. When traders are looking for psychological advice, they tend to formulate your question as, "you can help me get rid of X?", Where X is a problematic model of trade. Their goal is to eliminate the conflict, habit, or condition of sentiment, which they interpret as a problem. The work focuses on, is not seeking to eliminate those negatives. Rather, it identifies the goals of people - the positive, which they wish to achieve - and the ways in which they have already reached them, even a limited way. The idea is not to make a smaller amount of problem X, but to make more decisions Y. Once again, the example will be useful.

A married couple came to the recommendation, stating that they are "relationship problems" and are thinking about divorce. They argue that often swears and seems to be away from each other. My wife declares that her husband had too much time, trading in the market, ignoring family responsibilities. The husband contends that his wife constantly vorchit to him that he did things at home, diverting it from the study of markets. During the trading session, the wife yells irritably, "you never listen to me!" The husband, in turn, responds, "you never supported my work!"

It is clear that the couple formed the notion that they are in the balance. The idea for "never" - that he never drew attention to her or that she never supported it - reinforces the idea that they are incompatible with each other. If the other party will never behave in such a way as to contribute to a good marriage, it is not surprising that divorce seems the only option. Psychotherapist, practicing concentration on the solution, do not fall into the trap of the study of conflict pairs. In discussing their problems, especially the scroll them in meetings, only to convince a few more that the situation is hopeless, that they can not escape their difficulties, even in the office of psychotherapist. Instead, the psychologist will ask each member of the couple to describe the exceptions to this problem. "I am sure that you are not swears, 24 hours a day, 7 days a week, could say a psychotherapist. "Tell me what you do when you do not dispute." Or even better, a psychotherapist may indicate that there may be cases where the couple feels a little closer to each other than at the time of settlement. "What are you doing girlfriend during these situations, more friendly", could be questioned. The basis of psychotherapist is a key assumption: When exceptions to the problem of the model, the couple is doing something else and it makes things right. Very, very few people are completely incompatible with each other. The key solutions built in to determine what they do when they get along better with each other and then build it as a solution. Rather than reduce the problem, the idea is to continue the behavior that leads them to their goals.

A married couple, for example, may indicate that they feel closer when they operate as a team, citing a case where they had to cooperate to prepare a house to live together. Out of the recognition can be obtained from the exercises to perform household chores that involve a high degree of interaction with separate tasks, such as joint planning vacation or investment research. In carrying out these exercises, the couple learns that they can, indeed, to enjoy the company of each other, destroying the belief that they have a "bad attitude" and "never" do not worry about each other.
Indeed, a new experience allows them to build a more positive perception of their relationship, forming a solution of the exceptions to the original problem. When traders have become mired in problems, an approach focusing on solving is to look for exceptions. "Let's look at what you do when selling well," said a trader I am concerned, who complained of the fear of "pressing the trigger" when entering into transactions. "Rather than assume that you" never "did not sell well, let's look at your successful transaction and find the core of an effective trader. Let us find, as the core of successful transactions, and then this one-time. The purpose was not to fix the problem trade and increase the share trader, you have always been, when placed at a height. "

For example, in the case of insomnia trader John, a psychotherapist, practicing concentration on the solution could be to ask "what the deal you are, when sleep well?" Hence, perhaps, a set of healthy trade practices that have enhanced and expanded, will allow John to sleep normally. The key method, the concentration on the solution lies in determining what people do when there are closer to their goals and then make them do that anymore.

Application of concentration on the decision to trade

In his private trade, I annually spend an analysis of transactions made over the past years, focusing both on the winning transaction, and at Losing. From an examination of the winning transaction, I'm trying to determine what I did the right - what worked for me over the past year. This becomes the basis for "trading decisions, which I try to apply next year. (a sample list of trading solutions, see appendix 2 at the end of the article) The idea is to create its own model of commercial success from my own experience, rather than borrow it from others. Before each trading day, I rehearsed elements of the model in my trading diary, which I am. This serial repetition helps me learn the trade decisions in a way that they become an automatic part of the trade arsenal. The method of concentration on the solution seems to be working on the same pattern as a model of evolution. When there are random mutations within the framework of the gene, some of which are very adaptive and enhance the degree of survival of species. Over time, this selective pressure increases the representation of mutations in the common gene until it becomes dominant. Similarly, we can consider our transaction as a set of mutations in the overall totality of our conduct. Singling out successful transactions and paying particular attention to them - constructing them as the solutions - we provide our own selective pressure and increase the representation of this behavior in our repertoire. On the contrary, when we concentrate on the problem, paying more attention to our imperfect behavior, rather than success, we are unwittingly reinforcing it, and create a kind of degradation. Recently, I expanded the concept of trade analysis for the daily training, defining a "deal of the day" for each of the last day of trading. Deal of the day, which is part of the daily analysis, is not necessarily the most lucrative deal that could conclude but that the transaction with the highest probability of success, which I had committed or was committed on the basis of its trading system. For example, if the market moves from pereprodannosti up, noting the new short-term peaks, the higher the chances of continuing the upward movement. Opening a long position in the first back after such a motion might be my bargain of the day. In determining the "best commercial practices" every day, I embody them in their minds, building solutions, rather than find out their problems. Clearly, methods of decision not to respond to the challenges of trade. Sometimes people are really experiencing emotional dezorganizovannost, which interferes with their success, and this may require additional attention and refining. Analysis of the worst deals can also be useful, especially for the removal of the few deals, which often generate a large share of annual losses. However, among the methods of care, methods of concentration on the solution is unique by its ability to help traders become their own psychotherapist. By requiring that market participants find their own success and create models based on them, focus on addressing each person makes his own guru, rather than create an unhealthy dependence on others.

Annex 1

Trading problems in terms of concentration in the solution

1. Many problems begin as a string of negative events or as a negative event, which grabs the attention of the trader.
2. While the string of negative events or a negative event may occur as a mere coincidence, people tend to seek meaning in events and go to them and explain the model.
3. Once a trader sees a problem, concentrate on it and create an explanation to this, it changes its behavior in an attempt to destroy it.
4. Attempts to analyze and address the problem at all to build on these problems and their consequences, creating a vicious cycle.
5. After a while, concentrating on the problem of becoming familiar and configures trader negatively,
reducing its confidence.
6. By the time the majority of traders looking for help to solve trade problems, they have already svyklis with this problem, which continue to affect the processing of information necessary for a successful trade.

Annex 2

Examples of commercial solutions
. Keep each transaction a small, removing the pressure associated with any particular transaction.
. To maintain a constant amount of transactions that each transaction was similar to any other, making the auto trade.
. Limit the transaction to one or two of intraday volatility of the options or futures, entering into the market only when the tested models showed a significant bias certain directions.
. To restrict trade on the break only to those transactions that occur when a significant breakthrough intra-day level, for example, short-term peak or minimum.

. Logging out of perekuplennyh, or resell market, where 5-minute volume spikes commits more than three or more standard deviations, compared with normal volume.
. Enter the market only when prices and the cumulative normalized TEC has moved in the direction of the expected traffic, using the latest maxima / minima of these values to establish a stop-orders for open positions.

Forex Magazine
based on www.brettsteenbarger.com

Advantages of short-term trading

Afshin Taychian today one of the most popular world-recognized expert and lecturer on all aspects of trade. He is the founder of the company «Traders International» and developer of trading methodology for trading the S & P 500, NASDAQ and DOW E-mini, which was the highest ranking line TIMES. He spent many years studying advanced technical analysis, and effectively used his extensive knowledge and experience to develop methodologies that are unique and have been popular among the professionals trade.

Today, there are a sufficient number of highly liquid and highly volatile markets, which represent a «gold vein» for short-term traders.

For short-term or intra-day trade, the discovery of the correct marketing tool is essential. These tools can be clearly attributed to the stock indices futures E-mini and currency instruments, which have become very popular over the past few years, because it has some valuable features, which have no other markets.

In order to enumerate all the advantages of trading in these markets would require a very long time, but some of them I still enumerate:

• Unique combination of high volatility, high liquidity and high credit leverage;
• the opportunity to trade with 100% of th e execution of orders, eliminating the need to exchange room or stock broker to attract the hall;
• minimal slippage;
• Small spreads;
• equal opportunity to open a short or long positions;
• absolutely no requirement to do market research;
• a much easier implementation of transactions than for other instruments;
• very low or no fees;
• Significant short-term tax benefits;
• the possibility of hedging;
• And most importantly, these markets are, and always will be, absolutely fair. No corruption, no manipulation, no insider information (compared with the shares of individual companies).

Methods and systems

Any of these benefits could have a significant impact on your results. Your success is a direct result of your choice in the trade market, and your choice of trade.

What about the method of trading? Does this matter? Are you sure you yes! The method of trade must comply with your trading style, as well as your personal identity. If you do not have the patience and discipline, you will need a mechanical method, but not at 100%.

Before we discuss what needs to be a trader, let's give a couple of minutes to discuss what the trader does not need. In recent years, a trend from extremely complex to very simple methods - from one extreme to another. The truth is that no one method does not work perfectly.

Complexity leads to fatigue, fatigue to the disorder, and disorder to failure. Using a complex approach, you will always find at least one element that is not consistent with the overall picture and you have to make any assumptions. Most people are not the supercomputers and sophisticated techniques, involving multiple charts and indicators are not working well for them.

Some go the other way in search of «The Holy Grail chalice» - buy magic program that should turn their computer into the car to make money, which will make decisions about buying and selling for them, because they no longer have the confidence to make decisions for themselves. They are held responsible for its financial future on a computer that does not even know when to speak Greenspan. Of course, this is not realistic. Success can not be bought. It should be work, and require accountability and scrutiny. Remember this.
Commercial software can not be effective a long time, because they were programmed based on past market data. The fact is that the driving forces of the market is always changing, and the program is unable to admit it. But when you know how to be flexible to dynamic changes in the market, you can very well monitor their transactions.

But what about the trade practices? Have you heard the phrase, «if you want something done properly, then do it yourself». This expression is doubly true for a trader. Success in trade is nothing like the discovery of a market that offers the greatest sequence of long periods of time because, let's recognize it, you'll want to make money as long as possible. We are again talking about «cup of the Holy Grail»? Absolutely nothing! Building a reliable method means that you - the star, not your computer. You completely control your transaction and are responsible for their financial future. Now we come to the really important question - «Is there a methodology available that works?»
To date, we hope that you know that the complexity does not mean return, so let's talk about the simple approach. Combining these simple techniques with the advantages of some of the market should provide us with a positive result.

For example, take the market S & P 500. The average price movement of market S & P 500 E-mini is about 25 points a day, and each item is $ 50 per contract. You can trade as many contracts as far as your account and your risk management rules. If you are five contracts traded in one transaction, for example, and have just two points, it will be $ 500 a day. Of course, to be fair, one should notice that you can lose the same amount if the market goes against you. Everything is how you manage risk and potential for use in the course of his trade.

Look at the schedule for one minute S & P 500, and you'll notice that most of the time, the index moved up and down, at least at two points or more every 5 - 20 minutes. When you aim to arrive in two points of entry points, you have a very high probability of achieving the goal.

To increase their chances, avoid excess of the trade regime and filter the «market noise». You can take a simple yet powerful method of trading, which organically combines similar levels of stop-orders, a very precise trade signals, and normal approaches to managing money to achieve excellent results Trade. Stop for a method should not be more than two points, but you should be winning more deals than Losing in accordance with this method.

To determine the buying and selling signals, I use Stochastics and Moving averages of certain parameters on the one minute chart. Setting is very important for the accuracy of the signals when they confirm a certain price movement. These two indicators are based on different formulas and look at the market from different angles. Whenever they both confirm some movement, this implies a deal with a high potential.

The most traditional methods of trade using multiple schedules with different time scales. 1 -, 5 -, 10 -, 15-and 30-minute charts are expected to provide us with high reliability and accuracy when these graphs confirm a price move. The biggest drawback of these methods, generally, is that they miss many opportunities.

For example, if we have a full movement of four points in one minute schedule, we can enter into this movement and make a few points rather easily. But if we want to wait, when the five-minute schedule, etc. show proof, then the movement has already finished! Even if we use a five-minute schedule, 90% of our signals will not be confirmed.

With multiple time formats we skip a lot of opportunities to catch a little movement in a few paragraphs, which could mean substantial profits, depending on the size of the position and number of transactions. A separate one minute candle schedule and correctly configured to combine the two indicators will enable you to make quick bargain.

But what about the definition of the market direction over the next five minutes or something like that? What if we use the enormous power of modern technical analysis and allow the natural tendency of the market to tell us how far the market will go in this direction?

Most traders follow the same school in their trade. Some methods used to recognize image patterns and waiting for the formation of high models. Other traders use technical analysis to predict the next price movement. Still others use astrology, news, and lots of other ways to get «answer».

We found that the combination of the legendary models of «likely» to a simple, yet reliable technical analysis is the single most accurate way to determine the entry points into the market.

At highly volatile and highly liquid markets, this is an excellent approach to trade. Does this mean that we can expect in our dealings only small gains in the two paragraphs? With this approach, it is possible to accurately detect the long, strong trends at their very early stage and traded in their direction. You also can trade against the main trend or sideways market.

Trade as a business

Trade like the majority of other types of businesses. According to statistics, 90% of newly businesses fail within the first year or two. There are three main reasons for this. First - this nedokapitalizatsiya, the second - lack of a reliable business plan, and the third - poor management. Any of these three factors can lead to business failure, but nevertheless, there are many people who try to carry out his dream to own their own business.
Interesting, but the same is true of the statistics of trade. Trader may fail due to lack of one or more of these same elements (ie, being nedokapitalizirovannym, not having a reliable method of trade, or by poor management of money), add here two more - the lack of discipline and control to properly implement the terms of trade .

With today's technology, it is much easier than ever before, follow the proper steps in order to grow and develop trade and implement this plan, not just risking capital to make sure that the method and the plan worked well.

After the lining of the method and adapt it to your personal and financial status, you can check it on a virtual account to see how viable your method of trading, while not risking real money. This testing should demonstrate that your business plan is normal. I always convince newcomers to achieve 15 consecutive days of successful trading, before they start trading real money. As most traders will confirm that it is almost impossible without a very powerful and accurate method of trade, plus good personal skills of its execution.

The next step (assuming that the trader has sufficient capital), is good governance (or execution) of the plan. This step is probably the biggest challenge because it involves the deployment of real capital in their transactions. We believe that the best way to make a smooth transition from simulation to the stage of «real thing» is to sell a small amount of money. The smallest amount of money being at risk will reduce the impact of human factors (emotions) in trade. Later there will be time for fear, greed and insecurity.

Once you've proven to myself that the method worked with the trade on a virtual account, you have successfully used to trade for small money, you are ready to negotiate this delicate business, as your confidence grows and your skills sharpened. Patience, discipline and concentration make it possible to control the situation, and the trader becomes a fearless warrior with an arsenal of weapons invincible to trade.

The next logical step would be to increase the volume of trade by increasing the size of the positions. Now, a trader can enjoy the fruits of their efforts - the award comes not only in financial terms. Need work, study and responsibility in the beginning to get to a positive working stages, but it's worth the effort.

Afshin Taychian