Psychological aspects of the market
Refracted reality of being Much has been said and written about the importance of psychological factors in the market. But the only real trade can identify gaps in the psychological preparation of the trader, to show in what direction it should develop. Everything Else - tinsel, it's just talk about the market, who love to people who have never worked in the market and nothing on it is not earned. We need to understand who we are, understand their feelings in a situation of risk. Each time, earning money, you have to be really very careful and very ironic to yourself, you lose the rest - because, without doing so, the next day, we tend to lose more than earned.
Why is this happening? The problem is that people perceive time as a kind of reality, not thinking about its meaning. But the meaning is that every day, every hour are any developments. We are planning an action plan, it looks like some straight - but here it is distorted by all-powerful time, as the distorted visual perception of an object immersed in its environment with a different refractive index, such as a teaspoon in a glass of water.
Build-built and finally ... So it is with the future. We drew the line, built from bricks buduschee past, but the desired result can be only with big assumptions. And to this we must always be prepared, especially if our work is completely dependent on changes made in time. It must add something that we did not expect. Even with the correct prediction will be very difficult to manage the situation, because it is always unpredictable.
The trader thinks about what will happen after. Fig. 1. The trader thinks about what will happen after.
The same happens in a situation where we are, traders, outlines an action plan on the assumption of a pessimistic scenario. But the problem is that most traders to worse outcome, as a rule, do not reach. Around the middle of the road, instead, quietly preparing for a conservative, take a stop loss, out of position, etc., the trader begins to become bolder look ahead and not think about the alleged worst, but that will come after ( Fig. 1).
Accounting for time and self- By the way, thirty of the best American traders, when they were asked what they consider to be the most difficult in his profession, answered the same way: it's not technical skills, no understanding of markets, and discipline. That is its weakness hinders the implementation of plans of trade outlined earlier. Night - the worst time for the trader. If the call comes at night with the information that somewhere that something is happening, and you need to decide, remember - this decision is usually irrational. There is something constantly knocking you to the original course of action. In general, this is a serious problem - lack of discipline. Our linear perception, but reality, to put it mildly, somewhat ragged.
Another aspect, more mathematical. To make kakoenibud prediction, we must take the historical data for the period is longer of interest to us threefold. For example, when Khrushchev was based on growth rates during the period from 1945 to 1960-th years, came to rather optimistic conclusion that communism in the Soviet Union to build a 1980-mu, was wrongly selected period. Of course, not want to stretch it to war and destruction ...
The reality is in another band, wider than prognoziruemym.Ris. 2. The reality is in another band, wider than projected.
In trading, it happens every day - included in the analysis of less than the required interval, and come to an incorrect assessment. Taking a short period in the Range, people buy, sell, and then they took it out for this range, and they lose a major amount of money (Figure 2).
People tend to confuse the scope and hope for the best, and persist in their delusions. And when the little waves overlap large trader reaction is not always adequate. Overcoming it is very difficult from a psychological point of view.
So the vehicle technology, but without the work themselves, without understanding the psychology of trading on financial markets and the ability to monitor themselves during this work - success should be expected. Wish otherwise.
Footnotes: * The material is based on statements Simon Vine at the Second International Conference and Exhibition, held 1-2 October 2002 in Moscow.
By Michael Babchenko
Refracted reality of being Much has been said and written about the importance of psychological factors in the market. But the only real trade can identify gaps in the psychological preparation of the trader, to show in what direction it should develop. Everything Else - tinsel, it's just talk about the market, who love to people who have never worked in the market and nothing on it is not earned. We need to understand who we are, understand their feelings in a situation of risk. Each time, earning money, you have to be really very careful and very ironic to yourself, you lose the rest - because, without doing so, the next day, we tend to lose more than earned.
Why is this happening? The problem is that people perceive time as a kind of reality, not thinking about its meaning. But the meaning is that every day, every hour are any developments. We are planning an action plan, it looks like some straight - but here it is distorted by all-powerful time, as the distorted visual perception of an object immersed in its environment with a different refractive index, such as a teaspoon in a glass of water.
Build-built and finally ... So it is with the future. We drew the line, built from bricks buduschee past, but
The trader thinks about what will happen after. Fig. 1. The trader thinks about what will happen after.
The same happens in a situation where we are, traders, outlines an action plan on the assumption of a pessimistic scenario. But the problem is that most traders to worse outcome, as a rule, do not reach. Around the middle of the road, instead, quietly preparing for a conservative, take a stop loss, out of position, etc., the trader begins to become bolder look ahead and not think about the alleged worst, but that will come after ( Fig. 1).
Accounting for time and self- By the way, thirty of the best American traders, when they were asked what they consider to be the most difficult in his profession, answered the same way: it's not technical skills, no understanding of markets, and discipline. That is its weakness hinders the implementation of plans of trade outlined earlier. Night - the worst time for the trader. If the call comes at night with the information that somewhere that something is happening, and you need to decide
Another aspect, more mathematical. To make kakoenibud prediction, we must take the historical data for the period is longer of interest to us threefold. For example, when Khrushchev was based on growth rates during the period from 1945 to 1960-th years, came to rather optimistic conclusion that communism in the Soviet Union to build a 1980-mu, was wrongly selected period. Of course, not want to stretch it to war and destruction ...
The reality is in another band, wider than prognoziruemym.Ris. 2. The reality is in another band, wider than projected.
In trading, it happens every day - included in the analysis of less than the required interval, and come to an incorrect assessment. Taking a short period in the Range, people buy, sell, and then they took it out for this range, and they lose a major amount of money (Figure 2).
People tend to confuse the scope and hope for the best, and persist in their delusions. And when the little waves overlap large trader reaction is not always adequate. Overcoming it is very difficult from a psychological point of view.
So the vehicle technology, but without the work themselves, without understanding the psychology of trading on financial markets and the ability to monitor themselves during this work - success should be expected. Wish otherwise.
Footnotes: * The material is based on statements Simon Vine at the Second International Conference and Exhibition
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