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Technical Analysis 3 for the Professional Forex Trader 2010
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Essentials of Foreign Exchange Trading (Essentials Series)
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Hedge Fund Stock & Forex Chart Tool / Technical Analysis
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Technical Analysis I for the Professional Forex Trader 2010
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Psychological attitude of trader remains crucial point in the commercial activity. It suffices to speak about the fact that the traders, who trade on the virtual calculation (with the virtual money) frequently show not bad results, but their results strongly deteriorate upon transfer to the real money. But in what the matter? One and the same trader, the same quotations, the same utilized tools - and this different result. Answer is simple - in action psychological factors. Working with the real financial means, trader most strongly depends on his own feelings of fear and greediness, which still are called the engines of market.
Specifically, these two is frequently oppositely
directed sensations do not give to trader to quietly and sensibly
evaluate situation, to in proper time shut unprofitable positions or to
fix profit. Panic on the market leads to abrupt changes in the exchange
rates and very frequently this motion does not reflect the real
processes, which take place in one or other economy or another of
peace. It is here appropriate to recall determination for “collective
reason”: the reason of crowd is equal to the reason of the most
under-developed representative of this crowd. And when the discussion
deals with the large number of traders, representing as private
individuals, so also all possible investment trusts, financial houses,
jar, then the joint mood of this crowd is frequently subjected to the
action of panicky mood in spite of the logical reasonings of the
sober-minded trader. And if to us will be intelligible overall
psychological attitude, then the success of our trade sharply will grow.
But thus far the discussion dealt with “collective psychological
attitude”. And if it is desirable to see, to understand and to use
overall attitude for the personal trade, then this is possible to carry
out, controlling the reaction of market to the events, proceeding in
the world policy, to the economy and to nature. To much more complexly
restrain its own psychological attitude at the moment of making a
decision about purchase or sale of currency. With decision making in
the beginning trader on one cup- - weights occurs the intuition, made
up by emotions, on another the cup- unprejudiced knowledge, deprived of
emotional attitude, which is rested only on the facts and the
objectivity. What does hang somewhere else? Certainly, intuition! But
the intuition of novice thus far is not based on the experience.
Because of this the solution starts on the emotions - main enemy and
the assistant to trader. But how to learn to regulate their emotions,
minimizing their influence when they greatly do interfere with? Answer
- to improve discipline of trader. Only disciplined trader will be able
to work on the market as much time, as it is necessary for achievement
to purpose. Only discipline will not give to trader to be broken under
the market action and to leave from the market for earlier than the
time. There is a mass of modes of operation on strengthening of the
discipline of trader - this and the measured off operating schedule,
and the selection of temporary frames for the work on the basis of its
psychological special features. But the use of a commercial system is
nevertheless most efficient.
To follow the signals of commercial system also is sufficiently
complex. It is necessary to understand well for this that the
situations for the successful moment of the entrance into the market
will be always and will be repeated thus far “living” market. But many
traders, yielding to temptation “to have time to jump into the outgoing
train”, enter into market either too early or it is too late, which
unavoidably leads both to the losses and to the psychological disorder.
Work with the financial tools is complex, in the first place, because
of the strong negative action of failures on the psychological state of
trader, closely to the heart who survives the loss of money in the
unsuccessful transaction and the being undergone continuous
psychological pressure.
You will astonish, but the psychological state negatively can influence
the gain, when trader, successfully entering into market, shuts
position with the profit. In this case the danger can be connected with
the overestimation of its commercial grades and reduction in the
attention. Calling result gain, we consciously focus attention of the
reader to this perception of earnings, since the result of last
transaction with the profit is frequently received by trader as the
earned sum, although about the earnings we can speak only as about the
result of several transactions, let us say, during the month or the
larger period. Then the results of all positive transactions are
averaged, and we speak about the average positive transaction and
general profit. The results of all negative transactions also are
averaged - we obtain average unprofitable, and additionally to it - the
index of general loss. Joint income minus joint loss composes profit
during the specific period of time, and we make level it with the
earned means. If trader will operate, first of all, with the concepts,
connected with the general result, and not to appeal to the immediate
gain, then this approach will lower the psychological pressure as a
result of each carried out transaction, “averaging” its action on the
large temporary period, month or quarter.
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