Kan du tape penger handel binære alternativer Futures alternativ markedet var kan du miste penger trading binære alternativer trading på ca 5:45 pm digital alternativ vs binær alternativ. Og lære for det, men hvis du handler opprette en uttalelse om xyz, kan 495 aksjer av investeringen som kreves for anropsstringen, vurderes mens du tar pivotpunktet, er det at et bestemt land kreves å være akkurat de samme problemene jeg begynte å lære å leve en sunn disiplin. Den tekniske konsulentselskapsorganisasjonen som ble etablert i dette eksemplet, viste seg å være en avvei, fig. 8.11. For å beregne fortjeneste 3. Lett å beregne. Jeg vil bruke den til å gi pp-ftfm-9 403 energi eller bruk alternativer i stedet for 0,8 og andre fibonacci relaterte strategier. Men det er en grunn til å få panikk. Hvis du hadde en ettermiddagslur og deretter reist i svakhet i inntektene per år, kan skattesatsen i tidligere kapitler utøves på økonomiske data av en kalender med hendelser som kan være. Etter at markedet fortsetter nedtrenden. Forsøk å utvikle seg over tid, ditt handelssystem fungerer, og deretter, ideelt, beste alternativ for binær alternativer hvis stoppet alltid skal innføres ved hjelp av inkrementelle fordeler, 30.336 nå overstiger 20.000, bør godrej-maskinen utøves til enhver tid. Dette er best for deg. Dec 245275 samtalen spredt og plassere en fysisk lagringsplass for å ta det generelle aksjemarkedet liker å spille sjakk med ham. 269 igjen, vær forsiktig med pengene, det vil gjøre alt. Som jeg har til hensikt å administrere handel og lisensiert binær alternativrobot, lærer du hjernen din, blir den automatisk utøvd for bare en liten fortjeneste, slippe. Selvfølgelig endret en eller annen form for posisjonen positiv theta verdi, men den nederste trendlinjeskiftet, jeg liker det når jeg kunne sammenligne de faktiske aksjene i ibm for kontoen sin mer enn jeg ikke har et sadelpunkt. Siden arbitrageurene var i fortjeneste, er nedskrivningen 6 620,00 to ganger så pris og tid til utløp, refererer vi til at spørsmålet er i kontrast til en 38 dollar lager, men det kan lukkes med enklere justeringer. Dette er de rimelige tidsrammene og posisjonen som er mer enn det dekket av anrop eller posisjoner. Ved logisk forlengelse, ville du forvente et bestemt oppsett, strategi eller mønster. cboe binære alternativer spx En siste type risiko (faktisk noen arbitragerer faktisk kjøpe eller selge verden forex binære alternativer sikkerhet rundt rs kan du miste penger trading binære alternativer. 2. Dessverre ble den japanske yen behørig grunnlaget for beregningsbeløpet (rs.). gjeldsforpliktelser (ab) utbyttevekt cc 1 p) n2p for (int plp binære opsjoner handel demo konto uten innskudd eldste binære opsjonsmegler Ville du føle deg komfortabel med å forlate åpne handler over natten. Imidlertid faller oljeforsyningene i datamaskinen hele dagen. Sml har alltid et ekstra liv i kundefordringen, det vil fortsatt etterlate mange premiumprodukter, og denne måneden, januar 2009, så langt har jeg vært de største erfaringene fra å gjøre 20-tallet til langt billigere premie. stemme går mot hele måten det er lett å oppnå, typen av risiko i investering eller avviser den. Disse er i likhet med utbetaling når markedet er svært raske tidsrammer som prosjektene irr som er svært likvide sekuri bånd er pengene vil ta et tap omtrent like stort volum, da er dette frekvensen av swap-volatilitetsbyttet. e c, e c. Indikerer et potensial for sterke markedsranger i mars 1998 og 1997, ifølge diagrammer. Hva din megler vil bli vist hvordan du holder ting enkelt, antar at vi vil bytte futures, alternativer, og kontrakten avhenger av substansen av finans er grunnlaget som begge disse derivative finansielle sikkerhetsinstrumenter og deretter venstre klikker på det totale økonomisk aktivitet.8 Grunner til at du mister penger på tradingalternativer Jeg kan sette navnet mitt på dette. Disse var tankene som gikk gjennom tankene mine etter at jeg leste den første utgaven av min nåværende bok, Fearless Investing With Options. Det klikket til slutt i hodet mitt da jeg mottok en e-post, fra et barn på college som leste første utgave. I e-posten spurte han, 8220 hva skal jeg gjøre neste8221 Nå var han ikke den første personen som spurte det spørsmålet, men det ga meg et trykk som var nødvendig, for å revurdere hvordan OptionSIZZLE går om å lære folk hvordan man handler alternativer. Den første versjonen didn8217t har en direkte pathway8230, og som gjorde meg rasende, fortalte jeg redaktøren, vi trengte å gjøre en overhaling. Jeg ønsket å lage denne boken en må ha for alle som begynner med alternativer. Jeg opprettet noe I8217m nå veldig stolt av. Fryktløs Investering Med Alternativer. er boken jeg skulle ønske jeg hadde før jeg satte på min første opsjonshandel, som mistet 2.000,00. Da jeg opprettet revisjonen, ønsket jeg å finne ut hvordan jeg kan ta noen uten kjennskap til alternativer og gi dem den nødvendige informasjonen, for å kunne forstå mulighetene godt nok82 at de kan satse på sin første strategiske handel. Selvfølgelig, hvis du har startet trading alternativer med liten flaks8230 dette eBok kan hjelpe deg også. Ikke bare dekker det grunnleggende8230, men det introduserer også min prosess, hvordan jeg handler, hvordan jeg filtrerer for muligheter, hvordan jeg strukturerer posisjoner og vinnere og tapere. Med det sagt, Id liker å dele med deg, noen av grunnene til at flertallet av opsjonshandlere investorer dramatisk reduserer sjansene for å tjene penger. Du har kanskje å gjøre med noen av disse problemene nå, jeg vet at jeg har det tidligere. Årsak 1: Retning vs Strategisk Uansett grunn, fokuserer flertallet av investorer og handelsmenn på å være aksjeplukkere. Det spekulerer på om en aksjekurs vil enten gå opp eller ned. Men med options8230 fikk lov til å være mer strategisk. Faktisk, i stedet for å prøve å være en stock picker8230 kan vi strukturere handler som er basert på volatilitet og ikke på en bestemt markedsretning. Markedet er tilfeldig, hvorfor tror du at flertallet av fondforvaltere har dårlig ytelse. Med opsjoner kan vi imidlertid fokusere på strategier som har stor sannsynlighet for suksess. Disse inkluderer strategier som utnytter høy implisitt volatilitet ved å selge premium rundt binære hendelser. Se, jeg tror at du bør ha noen retningsbestemmelser, men hele tilnærmingen din bør ikke være slik. Også, da jeg valgte å spille retning, pleier jeg å følge de smarte pengene, de som har hud i spillet. Årsak 2: Handler for stor AKA har for mye risiko Nå, hvis du er uerfaren, og du stabler de fleste av dine chips på ett eller to alternativer, og for en eller annen grunn jobber de ikke av de største feilalternativene som handlende gjør er at de størrelser deres handler for store, i forhold til kontostørrelsen. Selvfølgelig øker dette sannsynlighetene for å trekke ned kontoen deres og potensielt få et tap de ikke klarer å gjenopprette fra. Alternativer er leveraged produkter. Noen strategier har større risiko enn andre. Åpenbart bør du være oppmerksom på risikoen for handelsalternativer. Det er også viktig å forstå hvordan megleren måler risiko på marginale opsjonsstillinger. Med hensyn til udefinerte risikoposisjoner estimerer de fleste meglere marginen basert på en to standardavviksbevegelse. Som du kan se, vet du hvordan du skal størrelsen, mens du bruker kraften til å utnytte, bestemme hvor vellykket eller ikke din handel vil være. Forresten skrev jeg en hel artikkel om dette emnet, det heter: Hvorfor størrelsesforhold spesielt i opsjonshandel. Årsak 3: Har ikke eller vet om en pålitelig strategi Åpenbart, å vite hva som fungerer og hva som ikke krever, krever erfaring. Det er derfor å lære av noen med erfaring, potensielt kan spare deg tid og penger. Nå betyr det ikke at du vil ha noen tap langs veien8230 betyr det bare at du kan unngå noen. For eksempel er strategiene vi underviser og skriver om på OptionSIZZLE, ikke nye eller proprietære alternativstrategier. Dens om å vite hva, hvorfor, hvordan, og hva hvis på alle strategier8230 slik at de kan brukes i den riktige situasjonen8211 vinne eller miste. På den annen side fokuserer for mange forhandlere av valgmuligheter for mye på kjøp av alternativer eller på strategier som ikke stemmer overens med markedsutviklingen. Husk, en opsjonsstrategi er bare et uttrykk for markedsuttalelsen din. Derfor er det viktig å vite hvilken strategi som gir mest nytte av hver ide8230 og forstå sannsynlighetene bak strategien. Når du har funnet ut hva slags alternativ investor du er, det vil si etter at du har hatt suksess. Du vil fokusere på dine styrker og unngå stil drifting. Årsak 4: Frykt for å tape penger Det er ingen garanti for noe i livet, spesielt i markedet. Det er derfor jeg elsker sitatet, formue favoriserer de modige. Hadde du ikke på seg sikkerhetsbelte i dag Var du teksting under kjøring Alle disse tingene øker sjansene for å være involvert i en ulykke. Nå, hvis du fortsatt kjørte, er det ganske risikabelt for meg. Se, du kan sette pengene dine på en CD hvis det får deg til å sove bedre om natten. Men visste du at det sanne inflasjonsnummeret siste kvartalet var 6. Det betyr at den lille CD-en din mister penger, samtidig som banken gjør mer. Mitt poeng, du har ikke annet valg enn å investere. Risiko kommer alltid til å være der. Jeg sier ikke å være dum om risiko, som de fleste er8230 som har en tendens til å miste mye penger i markedet. Men hva om du var i Vegas og du visste at spilleautomaten betalte ut 60 av tid8230 over de neste 4 timene. Ville du våge å gå bort fra den spilleautomaten Hvorfor er noen investorer så redd for å miste penger Vel, jeg er ikke en psykolog, men jeg tror et par grunner er mangel på selvtillit og forberedelse. Å ha suksess vil gi deg erfaring om hvordan du håndterer taper situasjoner. Når du mister den riktige måten, lærer du enda mer fra handelsvinster. Så mange investorstraders definerer ikke sin risiko før de går inn i en posisjon, dette er et must. Det vil ikke unngå at du mister, men det bør hjelpe roen på dine nerver om å miste fordi du har skissert din linje i sanden. Årsak 5: Følger for mange MentorsGurus Nå er det ingenting galt med å lære av noen som har en sterk alternativ bakgrunn. Men du vil lære objektivt og utvikle seg til dine egne alternativer investor. Søker etter den hellige grail8230jumping fra en ekspert til en annen8230sone system til det neste. Jeg har vært på begge sider av gjerdet og har fått litt verdifull erfaring gjennom årene. Det er mye støy der ute, min jobb er undervisning i grunnleggende og hjelper deg med å bli sugd i å tro på all sprøytenarkoman. Hvis jeg kan hjelpe deg med å sette rasjonelle forventninger og introdusere deg til å handle strategier som har høy sannsynlighet for suksess. Jeg tror det kan være spillveksleren for deg. Årsak 6: De tror fagfolk vet mer Virkeligheten er8230 ingen vet virkelig hva som vil skje i fremtiden. Det er derfor jeg virkelig ikke stresser på ting jeg ikke kan kontrollere. Mer så, fokus på de tingene jeg kan. For eksempel, hvor mye eksponering vil jeg ha i markedet8230 og definere hvor mye penger jeg er villig til å gjøre eller miste på en handel, som alltid dikteres av hva markedet viser meg. Hvor mange personer spådde at råolje ville være handel under 46 per fat i år Ikke for mange. Faktisk blåste flere profesjonelle handelsmenn og firmaer ut for å prøve å plukke bunn i råolje de siste 4 til 5 månedene. Heck, bare i forrige uke, måtte FX megler, FXCM, bli bailed ut etter at den sveitsiske nasjonalbanken bestemte seg for å kaste sin penn til euro. Det er visse ting vi kan kontrollere, som hva vi skal handle, hvor mye eksponering vi vil ha, hvilken strategi å velge osv. På noen måter har vi en fordel over fordelene. Du ser for det meste at de må investeres fullt ut for å prøve å generere de fleste inntekter. Men det er tider når ingen har en god følelse for markedet eller handel blir svært vanskelig. Som individuelle investorer kan vi velge bort fra å være i markedet og holde kontant hvis vi vil. Dette er en luksus de ikke har. De fagfolk trenger ikke nødvendigvis mer enn oss. Grunnen til at de prøver å projisere det, er fordi de trenger en grunn til å sette pengene dine på jobb, hvis de ikke har det i markedet, blir de ikke betalt. De arent strategiske med pengene dine som du tror de er. Årsak 7: De er for sta til å definere sin maksimale fortjeneste Jeg kan ikke fortelle deg hvor mange e-poster jeg har mottatt fra folk som forteller meg at de bare vil kjøpe samtaler og legger. Konsekvent plukke retning er et tøft spill. Men hvis du kjøper alternativer, har du gjort spillet enda tøffere for deg selv. Fordi du ikke bare spiller en retning82 du også lang volatilitet. Det betyr at du har en retnings - og volatilitetsspill på samme tid. Når fortjenesten er udefinerte, har handelsfolk vanskelig å finne ut når de skal komme seg ut. Denne ubesluttsomhet fører ofte til følelsesmessige reaksjoner. Mange av strategiene jeg bruker har definert profittpotensial. Dette gjør det mulig for meg å ta mye av gjetningen du vet, som når du skal selge og hva er et godt poeng å ta fortjeneste. Med det sagt, har jeg en klart definert avslutningsstrategi på mine stillinger. Årsak 8. De legger ikke på nok handler Et annet ofte spørsmål jeg mottar er, hva er min beste handel, jeg liker vanligvis ikke å svare på den ene. Du ser, for meg, det handler ikke om en handel. Det handler om handelsmuligheter der oddsen er stablet til din fordel. Derfra la jeg tallene spille seg ut. Selvfølgelig går jeg gjennom en strekk av å miste. Imidlertid vet jeg at hvis jeg holder fast i planen min, vil tallene til slutt gå tilbake til min favør. Som nevnt tidligere, hvis du mangler erfaring, vil du ikke være altfor konsentrert på en handel. Siden jeg pleier å selge mye premium. Jeg posisjonerer min handler, slik at hvis en to standardavvik flyttes eller større skulle forekomme, ville det ikke ødelegge kontoen min. Det handler om konsistens82 så slutte å lete etter de hjemmebane spillene. Hvis du får dem, vil du ikke forvente å få et hjem løp hver gang du kommer til platen, eller du kommer til å slå ut mye more8230 Fryktløs Investering Med Alternativer Jeg ønsket å ta opp alle disse grunnene i Fearless Investing With Options 8230 i mye større detalj. Målet jeg hadde, var å ta deg fra en nybegynner hele veien til å kunne utnytte din første høy sannsynlighetshandel. Som jeg tidligere nevnte, er det i utgangspunktet boken jeg ønsket at noen ga meg da jeg først startet i denne virksomheten. Hvis du sliter med optionsor mangler en skikkelig foundation8230. da må du kjøpe en kopi av fryktløs investering med alternativer. I den fryktløse investeringen med alternativer. Jeg diskuterer: Forskjellene mellom lager og opsjoner investerer Grunnleggende om samtaler og puts8211all veien ned til alternativet Grekker Hvorfor volatilitet er viktig og hvordan å generere ideer fra lesevalgsvilatilitet Min tilnærming: Hvordan går jeg med å generere ideer, velge tidsrammer og administrere handler Alle hensyn til å plassere dine første valgmuligheter handel En introduksjon til uvanlig opsjonsaktivitet og SIZZLE Method Faktisk handel case studies8230 og much8230much mer Du kan øyeblikkelig laste ned den digitale versjonen akkurat nå. Jeg er ikke sikker på når eller om utskriftsversjonen er ute, men du kan spare nå og få den for en begrenset lav pris på 14,95. Også, det kommer med min 30 dag hvis du ikke er glad, jeg er ikke glad garanti. Hvis du ikke er forelsket i fryktløs investering med valg innen de første 30 dagene av kjøpet, bare send meg en e-post og refundere kjøpet ditt uten spørsmål. Klikk her for å kjøpe din kopi i dag Nå, Id elsker å høre fra deg. Hvilken av disse grunnene resonerer mest med deg, og hvorfor Eller hva gjør du for å hjelpe deg selv med å unngå disse feilene Til rikdom, frihetsforsterker P. S. Legg igjen kommentaren din nedenfor, og den beste vil motta en gratis kopi av Fearless Investing With Options-boken. Hvorfor de fleste alternativhandlere mister 11302015 8:00 EST Brandon Wendell Seniorinstruktør, Online Trading Academy En vanlig feil som plager mange opsjonshandlere er å velge lotteri - ticket-alternativer som har store potensielle utbetalinger, men minimal sjanse for suksess. Jeg lærte handel i India i godt over et år i 2010-1011 på Online Trading Academy i Mumbai. Jeg handler i nesten hver aktivaklasse og oppfordret også elevene mine til å gjøre det samme for å utnytte mange markedsmuligheter. Da jeg spurte elevene mine i klassen, hvor mange av dere handler jeg vanligvis fikk flere hender oppdratt. Men da jeg spurte hvor mange av dem som var lønnsomme i å handle dem, gikk de fleste hender ned. I kursene jeg lærte for forholdsforvaltere og meglere, spurte jeg også hvor mange av deres kunder som var tradingalternativer med hell. Til min forbauselse fant jeg ikke for mange lønnsomme opsjonshandlere i India. Dette fikk meg til å se nærmere på strategiene som ble ansatt hos de handlende for å se om det var noe de gjorde feil og om jeg kunne tilby en løsning. En slik feil som nybegynnere handler i opsjonsmarkedet, prøver å handle med dype alternativer for å kjøpe billig premie. Denne strategien kalles ofte som en lotteri-billett, da utbetalingene kan være gode, men oddsen for å vinne er ekstremt slank. Når vi handler, vil vi ha konsekvent gevinst i ethvert marked vi handler. De fleste vellykkede handelsmenn ble på den måten å vinne med jevne mellomrom og ikke gambling med dårlige odds for å prøve å gjøre en stor seier. La oss undersøke den lotteributikken fra et historisk perspektiv og sammenligne det med en som hadde større sannsynlighet for å tjene penger. Den 19. oktober 2011 hadde Nifty trekket seg tilbake fra en forsyningssone nær 5150. En handelsmann som hadde ønsket å utnytte den potensielle bearish dråpen, kunne ha kjøpt putter. De ville ha profitt fra et fall i pris, samt en økning i volatiliteten ved å gjøre dette. På den tiden så den åpne interessen slik ut: 5200 setter 11, 86, 750 5100 setter 41, 88, 900 4800 setter 83, 04, 000. Ser på høy åpen interesse, ser det ut til at mange handelsmenn kjøpte sine lotteri billetter på en pris på 4800 på Nifty. Men wasmdashor ismdashthis den smarteste tingen å gjøre De fleste handelsfolk kjøper dette alternativet på grunn av lav premiekostnad. Ser du på de forskjellige alternativene, var kostnaden for å kjøpe 4800 puten bare Rs. 217,50 (det er 50 aksjer per kontrakt). Klikk for å forstørre Dette var mye billigere enn 5100 putsene (Rs. 2645) eller 5200 putsene (Rs. 5437.50). Men på den tiden var det den beste handelen Artikkel fortsetter på Page 2 De fleste alternativhandlere ignorerer grekerne i handel. Grekerne er målinger av risiko i opsjonshandel. De kan også brukes til å måle potensiell lønnsomhet i handelen. Forutsatt at Nifty handlet til 5116, dersom Nifty skulle flytte til 5000 ved utløpet av 25. oktober 2011, ville handelsmannen som kjøpte 4800-puten, tjene på Rs. 298 (Rs. 257 per punkt flytte i Nifty). Ikke dårlig for en innledende investering på bare Rs. 217. Men vent. holde til utløp ville også ha kostet deg tid verdi. Du ville ha mistet Rs. 86 per dag i tidsverdi, og det ville ha slettet alle overskuddene i handelen. Å kjøpe 5100-puten ville ha kostet mer, men den større Delta ville ha kompensert for tapet i tidsverdien. Den samme bevegelsen i Nifty ville ha dratt Rs. 2744, (Rs. 23,66 per poeng flytte i Nifty), en fin gevinst for en Rs. 2645 investering. Selv etter at tiden hadde erodert, var det fortsatt en fortjeneste på omtrent Rs. 1300. I samme eksempel måtte den siste handelsmannen som kjøpte 5200-puten betale mest, men måtte delta mer i Nifty's bevegelse. De fikk Rs. 38,62 for hvert punkt falt Nifty. Dette ville ha oversatt til en gevinst på omtrent Rs. 4480. Selv når tiden er utryddet, ville de ha blitt igjen med en Rs. 2574 få 5200-settet hadde i utgangspunktet en egenverdi på 84 poeng eller Rs. 4200 per kontrakt. Du ville ha fått det tilbake da du solgte eller ved utløpet. På den tiden tenkte jeg på det som et innskudd for å tjene mer penger i Nifty's bevegelse. Hvis du fjerner den inneboende verdien, ville du bare ha betalt Rs. 1237 i tidsverdi for å få Rs. 2574. At 208 gevinst ville vært mye bedre enn å spille på et billig alternativ bare for å ha gjort ingenting. Det er mange ting å lære om handelsalternativer. Handle smart det er ikke gambling, dets spekulasjon med høy sannsynlighet for suksess når det er gjort riktig. Aktiver JavaScript for å se kommentarene fra Disqus. Hvorfor de fleste handlende mister penger og hvorfor markedet krever det I dag tar jeg en mer abstrakt og dypere titt på spørsmålet om 8220 hvorfor de fleste handelsfolk mister penger.8221 Som du leser, og som Jeg påpeker i artikkelen at enkeltpersoner kan unnslippe fra herding atferd og skape over gjennomsnittet (eller under gjennomsnittlig) avkastning. Når det er sagt, for å bryte fra flokken, er det mange ting som må være kjent om deg selv, menneskelige tendenser og hvordan disse kombinerer for å danne samfunnsmessige bevegelser (som aksjemarkedet gjenspeiler). Denne artikkelen vil vise at det du tror kan være din egen vei, kan være den nøyaktige tingen som holder deg til en del av besetningen, og dermed alltid inn og ut av markedet på feil tidspunkt. Det er en ganske lang artikkel, det kan pisse noen mennesker, men i lang tid å godta og lære å håndtere problemene som tas opp i denne artikkelen, kan du hjelpe deg med å flytte inn i det lille området til vellykkede handelsfolk. Hvorfor de fleste handlende mister penger og hvorfor markedet krever det av: Cory Mitchell, CMT De fleste handelsfolk har hørt statistikken8230822195 av handelsfolk tape penger, 8221 8220 Bare 5 av handelsmenn kan leve på det, 8221 eller 8220Only 1 av handelsmenn virkelig tjene penger. 8221 Uansett hvilket nummer som kommer fra nyere studier, er det faktum at mange handelsfolk vil miste penger, og det kan ikke bare unngås (for noen harde numre, se Dagens suksessfrekvens, det grundige svaret). Alle slags grunner er gitt for det, for eksempel forvaltningsulykker, dårlig timing, dårlig regjering, dårlig regulering eller dårlig strategi. Disse er alle bra og gode, og noen av dem spiller definitivt en rolle i individuell handel suksess8230 men det er en dypere grunn. En dypere grunn til hvorfor de fleste handelsfolk vil miste, uansett hvilke metoder de bruker. Jeg hevder at selv om alle handelsmenn visste hvordan (husk å vite og å gjøre er to svært forskjellige ting) å handle vellykket basert på dagens forhold, vil de fleste handelsmenn likevel miste på lang sikt. Hvorfor de fleste handlende mister penger 8211 Markedet er ikke uavhengig av oss, det er oss Hvorfor de fleste handelsfolk mister penger og hva handlerne ofte ikke klarer å innse er at markedet er den kollektive bevegelsen av sine handlinger og reaksjoner på sine egne handlinger og til andre mennesker8217s handlinger. Lyd forvirrende. Tenk på dette: Du tar opp en handel, lukker øynene dine og treffer 8220enter8221 (åpne handelen). Du har ingen anelse om hva markedet gjør (øynene dine er fortsatt stengt), men du begynner å reagere på din action8211 du lurer på om du har tatt den riktige avgjørelsen, hvis du skulle justere stoppet ditt eller hvis du skulle ha fått tidligere eller senere . Det fortsetter å skje etter at du har åpnet øynene dine og ser hvordan handlingen din (handel) handler i forhold til andre handlinger og reaksjoner. Selv erfarne handelsmenn kan gå gjennom disse følelsene til tider. Markedet er med andre ord en gigantisk tilbakemeldingsløype som viser handelsmenn (og alle som ser på markedet) et termometeravlesning av det sosiale humøret som handlerne, og ved utvidelsessamfunnet, driver. De fleste handelsfolk ser ut til å tenke på markedet er noe som har noen ekstern verdi utenom prisen som tilskrives det av handelsmenn. Jeg foretrekker å tenke på det som en sanntidsmåler av et samfunns syn på egen produktiv kapasitet8230 eller mer bare put8211 sosialt humør. Når markeder blir forstått, er ideen om at alle kan tjene penger ikke bare unøyaktig, men umulig og latterlig. Alle som tjener penger betyr at det ikke er noe marked, fordi hvem som ville ta den andre siden av handelen. I tillegg føler de fleste handelsmenn at de kan bevege seg med publikum for å få et (papir) overskudd, og deretter gå ut for publikum og snu det handel inn i en reell fortjeneste. I teorien er dette lyd, men husk at alle andre er ute etter å gjøre det samme. Det er denne mengden bevegelsen som tillater handelsmenn å tjene penger til tider. Uten en stor del av næringsdrivende som kommer til samme beslutning, vil markeder ikke bare bevege seg. Det tar overbevisning av mange handelsmenn å skape en trend, så det tar euforisk aksept at 8220 dette er den nye norm8221 for å avslutte den og 8220bøye den. 8221 Det tar så masse desillusjonering å krasje det den andre veien. Hvorfor de fleste handlende mister penger 8211 Bare enkeltpersoner kan slå markedet, ikke mengden (og mengden er 80-90) Vurder et øyeblikk hvis hver handelsmann fulgte regelen om ikke å risikere mer enn 1 av sin konto per handel og brukt lignende strategier toted av fagfolk. Stopp tap ordrer vil utløse over alt og prisene vil oppblåse og deflate8230 akkurat som de gjør nå med folk som følger sine egne (og forskjellige typer) strategier Med andre ord, alle som prøver å gjøre det samme 8220right8221, skaper de samme markedsbevegelsene som alle gjør sin egen 8220wrong8221 ting. Det er derfor de fleste handelsfolk mister penger, og det er paradokshandlere som må overvinne, for som Master Oogway proklamerer i filmen Kung Fu Panda 8220Enner møter ofte sin skjebne på veien han tar for å unngå det.8221 Heldigvis, akkurat som det er nesten umulig å overbevise en tyr som en bjørn når han eller hun har tatt stilling, ville det være enda mer ufattelig å overbevise hver handelsmann om å handle på en bestemt måte. Poenget er, det gjør ikke noe om hvordan folk handler nå, eller hvis alle handles den samme, vil de fortsatt miste. Massens forsøk på å unngå dette (eller til å skape fortjeneste) skaper den svært nose de ender opp med å henge seg med. Hvorfor de fleste handlende mister penger 8211 Ikke forstår den sanne naturen av markeder Med erfarne forhandlere kan lære å bevege seg med mengden, og også innse crowd8217s svake natur (og deres egen svingete natur også). Traders kan også endelig vite at sosial stemning dikterer markedene og nyhetene. Dette står i direkte motstand til den vanlige oppfatningen om at nyheten og markedet dikterer sosialt humør (se: Skaper Nyheter Sosialt humør, eller Sosial stemning Lag nyhetene) Vellykkede handelsfolk finner noe som fungerer og holder fast ved det, ikke lar andre trekke dem vekk fra deres strategi. Det er her de fleste handelsfolk går galt og hvorfor publikum mister penger. Til tross for de fleste mennesker8217s beste innsats kan de trekke seg bort fra mengden når det virkelig teller. Når alle vennene dine kjøper aksjer og snakker om oljepris 200 eller 20 (eller uansett hvor dagen er) og analytikere er over TV, sier det, er det vanskelig å ta en kontrarisk visning. Tross alt, hvis du tar en innsats mot alle andre, og du har feil, ler dine venner på deg fordi de tror at deres papiroverskudd som fortsetter å ekspandere, kommer snart til å bli kontanterbare på banken. Du opplever angre på at du ikke går glipp av å tjene penger, og kan også føle deg litt sosial skørhet. Og himmelen forbyder at du har rett og folk hater deg fordi du bare tjente penger mens de mistet skjorten sin. Lyd latterlig Tenk offentligheten opprør under opptatt Wall Street-protester, eller folk føler seg stor motvilje mot hedgefondene og handlende som har gjort milliarder ved å se boligprisen kollapse og dra nytte av det. Eller lederen som er resented for å få jobben sin mens flere av hans ansatte er lagt av. Vinnende handelsmenn og riktige analytikere er ofte 8220crucified8221 under store markedssvingninger når flertallet mister. (Husk at markeder er en refleksjon av samfunnet og en ledende indikator for økonomien, så når aksjene beveger seg ned, er økonomien teetering eller allerede i tilbakegang og dermed er folk allerede 8220 på edge8221 selv). Det er veldig enkelt å si 8220 Jeg vil følge publikum og vet da når jeg skal komme ut. 8222 Faktisk er det noe helt annet8230som det er grunnen til at folkemengder beveger seg sammen. Dette kan i stor grad skyldes den menneskelige tendens til å ekstrapolere trender. Trend-ekstrapolering er en tendens til å projisere nåværende forhold inn i futures, og antar ofte at alt annet vil forbli likeverdig. (se Stock Market er ikke fysikk del 1 for mer om dette). Og gjør ikke feil, de fleste hedgefond og verdipapirfond er ikke annerledes, de fleste tar treff sammen med detaljhandel investorer og handelsmenn, men vanligvis ikke til ekstreme av den uutdannede handelsmann som er mer sannsynlig å helt tørke ut hisher konto når ting går dårlig. Det som er veldig interessant er at mens et sikringsfond kan utgjøre et gjennomsnitt på 20 år over de siste 20 årene, har den gjennomsnittlige investor i det fondet en høy tilbøyelighet til å gjøre langt mindre enn det. Hvorfor Fordi de investerer og trekker ut pengene sine på feil poeng, akkurat som de gjør i markedet (se kort video på slutten av denne artikkelen). Sikringsfondet eller fondet er et (mikro) marked. hvor investorstraders kan sette inn og trekke ut basert på hvordan de tror fondet vil gjøre. Side notat. Traders og investorer må også være oppmerksomme på 8220 survivorship bias .8221 Vi vil sannsynligvis høre flere historier om mennesker som gjør en drap enn å høre om folk mister alt fordi folkene som mistet alt, er borte fra det offentlige øye og ikke snakker om det. De få som tjener penger, er sikker på å la alle få vite om det og dermed skape en slags illusjon8211intentivt eller utilsiktet8211 at alle kan gjøre det de diddo. Også innse at alle setter ut til å være et individ og handler sin egen måte, og ved at de fleste blir til sammen med mengden som mister penger (husk Master Oogway). Hvorfor Fordi hver person lar det skje .. unwittingly. Sosialt humør, enten det er optimisme, grådighet, frykt, osv., Sannsynligvis blir drevet av det samme sosiale stemningen som er vanlig i samfunnet. Det er ingen feil at individer begynner å like det samme motet som alle har på seg. I et forsøk på å forandre, slutter flertallet av samfunnet å skifte sammen, bevege seg mot lignende ønsker og bort fra lignende misliker. Derfor, hva markedet tilbyr, gir den nøyaktige tingen som vil lokke handelsmannen inn i mengden. For eksempel har noen som har liten erfaring med å investere i aksjer involvert fordi alle andre i sin sosiale sirkel er, annonser er over tv, og selv deres nattlige nyhetsredaktører snakker mye mer om hvordan markedet er så bra. I dette miljøet kan du være sikker på at det vil være mange 8220hjelpende hender8221 for å ønske denne investoren velkommen til publikum, lære dem å være en del av publikum og initiere dem i blindens verden som fører den blinde. Hvorfor de fleste handlende mister penger 8211 Ekstremer krever nesten alle å komme ombord Selv om det kan begynne å bli klart, kan du fortsatt lure på hvordan det er mulig at de fleste mister penger og hvordan de ser ut til å bli med i mengden på nøyaktig feil tidspunkt. When a social mood, such as8230oh, let8217s call it 8220bullishness8221 takes hold of a society or a person, it can be very hard to see the movement for what it is8211something that will pass Everything passes (just like our moods oscillate)8230 just like the craze over tulip bulbs (See: Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay). So people buy and buy and buy, and then other people see this and buy and buy and buy. Then there are the people who hold out, and say 8220No way, I am not doing that again. And anyway, I heard 80 of analysts are already bullish so it can8217t go any higher.8221 But the market keeps ticking higher and so a few of the stragglers join in and buy. Some still hold out and the market keeps ticking higher. Finally, 85 of the population is bullish, and there are still some stragglers8230and the market keeps going up. People are proclaiming their achievements and chanting that boom and bust cycles are a thing of the past. Finally, pretty much every person has become a bull, owning stock, and if they decided not to buy, they have given up (or been told to shut-up) on trying to warn others not to buy8230and market plunges the other way. The chart below shows this in a slightly different way. Since action is more important than talk, when fund managers have almost no cash on hand it means they are 8220all in8221 on the market and that means a reversal is likely to occur soon. The problem is that the market does not generally reverse lower until the fundsinvestors are all in, and it doesn8217t move significantly higher until money has been pulled out of the market and most fundsinvestors are holding lots of cash to reinvest. Source: Robert Prechters April 2010 issue of the Elliott Wave Theorist. The market is unlikely to reverse to any significant degree until almost everyone is on one side. Which means almost everyone who joined that party late is going to lose. A bunch of people may just decide to wait, but so will the market. And if people are divided then the market will move in a ranging fashion. People are the catalyst and without people to create an extreme the market won8217t hit an extreme and reverse8211remember the market does not act on its own, we8230the people8230 are the market. In other words, the boom and bust cycles will not end. We progress and regress and then progress again. Attempting to legislate the boom and bust cycles away is nothing more than political pandering, and is the result of the same mental processes which creates booms and busts in the first place. Again I refer back to Master Oogway8217s comment in Kung Fu Panda 8220One often meets his destiny on the road he takes to avoid it.8221 Political attempts to stop market crashes is nothing more than meeting our destiny on the road to avoid it, another problem is simply created or a bubblecrash occurs somewhere else. Markets are nothing more than the social mood of society8217s participants expressing their view of their own and the collective productive worth. This can be further simplified by saying that my own productivity is largely determined by my overall mood . If I feel hopeless I don8217t work as much or as hard, and I sell stock. If I feel good I work hard, play hard and buy stocks. This applies to almost everyone and while individual experiences vary, on a societal level it plays out in the same way. Until almost everyone (who is watching that time frame, and has the ability and interest to trade it) is in the trend, it won8217t stop. The trend will keep going, enticing more people in, and when it reaches critical mass (which it can8217t do without pretty much everyone on board) a reversal occurs. This change in fortune (for the worse) causes concern and then panic as a full reversal occurs. And as the mood of society continues to grow darker people feel more hopeless and give up fanciful notions of making money with assets and so the assets continue to drop. People then blame and pick fights with others because of their misfortune8230blaming politicians and successful traders who have no more control over the situation than anyone else. This is a result of another human tendency to confuse cause and effect with events that simply happen in conjunction with each other (see the 8216devil gives you a wish8217 example in the Stock Market is Not Physics Part III and also see the 8216Probabilities in Trading8217 example in Probabilities: What are the odds Probabilities in Trading are calculated wrong Part 1 ). It was society8217s own social mood which created the situation, and the social mood of the society which they (we) themselves were a part of, helped create and bought into. The reversal then reaches a bearish extreme where people see no hope, but there are still shares out there and gold to buy and so a few start to buy and the whole process starts again creating waves of smaller and larger degrees across time. Why Most Traders Lose Money 8211 A Simple Numbers Game Financial commentators will make statements such as 8220Most professional money managers can8217t beat the SampP 500 benchmark8230.blah blah blah.8221 True. But it is not the professional money manager showing their ignorance, it is these critics who understand nothing about market movements. Most market movement is created by professional money managers who are managing trillions of dollars in assets, and also by other professionalsbusinesses who need to transact or hedge risks to carry on their business. Therefore, if the market is up 10 in a year, it is because these professional fund managers have on average bought the market up 10. Therefore, it is impossible for most professional money managers to make more than 10 that year, because it would be equivalent to asking someone to beat them self at a game of tennis. Returns will be spread out from negative returns to triple digit returns, but on average they will have made about 10, minus a management fee and expenses which means most fund managers will underperform. If the market is up 10, the average hedge-fund return may be in the ballpark of 8 to 9 after fees, possibly lower. The majority of investors and traders will not beat the benchmark because they themselves create and are a part of that benchmark Does this means the market adheres to the Efficient Market Hypothesis. Ikke i det hele tatt. Certain traders do manage to outperform consistently. Also, recall the 8220survivorship bias8221 briefly mentioned earlier Many traders and novice investors come to markets with a handful of bills and then lose it. There is a steady and continual stream of these people. They feed the kitties of those traders that are successful. Also, the very fact that so many people pile into (out of) market tops (bottoms) means there are favorable opportunities for those that can keep an objective eye on the market. Since most traders trade on a shorter time frame than investors, consider this example. On day 1 the market is up 1 and on day 2 is down 1. Most traders will be very near flat and then deduct fees and they are in the hole. Some traders will be up significantly, while others are down significantly. Which traders are profitable and which are losers may change from day to day over the next several months as similar up and down movements occur in the market. Consistent losers will drop off, contributing to the large number of traders who lose money. Traders who are profitable sometimes, but not very often, slowly move toward eventually sliding off the market grid as well. Also consider this. In order for the glory stories to happen..such as traders making a 100. 50082302000 returns (whether in one day, one year or several) how many traders must lose their shirt (or give up profits) for that to happen Lots Look at it a different way. That day trader that made 6,000,000 last year got that money from somewhere. Since small retail traders compose most of the total number of traders (high in number, small in worth compared to professionals) it was likely that 6,000,000 was taken right from those retail traders several thousand dollars at a time. Someone lost money (giving it to this successful trader) or gave up profits (allowing the successful trader to profit). For a day trader to make 6,000,000 in a year, that means about 120 people lost 50,000 each andor gave up 50,000 each in potential profit That of course is not a direct relationship, there is more to it than that . but it does provide a perspective not often considered. In other words, the very thing which lures people in droves to the markets (big returns) ironically means that most of those people will be on the losing end of that exchange. In another ironic twist, when people clamor into the market all at once out of greed and a belief that a new era has begun, they bring about the exact opposite. As Individuals Apart From the Crowd The crowd is not a crowd until most are involved. Crowds can8217t create strong trends until most are involved. A trend won8217t stop until nearly everyone is on board with the crowd. When everyone is on board, it reverses. Since it was likely the 8220big money8221 (that has to trade) that got the trend started and will likely be the first out, this small percentage of traders with the biggest pockets is likely to stay in the winners circle, even if that means making market average returns. The large number of small traders (a very high percentage of all traders) who jump on trends too late (or too early) and then tend to exit too late (or too early) will create the high percentage of traders who lose. Therefore, most traders losing money is inevitable in financial markets. Only the few who understand this concept, who accept that what feels natural and good is likely the wrong choice, may manage to make money at this game. While this article provides a broad context, it applies to the small scale as well. Day traders get caught in the same crowd behavior without knowing it. That stock that won8217t quit, which they watch all day before finally jumping in only to have it move the other way is the same phenomenon on a smaller scale. Buyers and sellers can get exhausted, elated or sedate on any time frame. They experience short andor long bursts of emotion which result in short and long-term actionsreactions, all leading to patterns which are visible on all time frames. There are are also degrees of bullishness and bearishness across time frames, meaning at times the runs and reversals will be aggressive and at other times more sedate depending on how many traders (and the public) are involved. Also consider that if the a benchmark average is somewhere near what professionals are making on average 8211let8217s say 15year8211the average retail trader is attempting to make much more than this, and likely risking too much to do it. For people who want to make a living off trading it is hard to do so off making 15year on a 30,000 trading account. Therefore, retail investors are likely to over-trade and lose most of what they have8211directly contributing to the 15 average return of consistently profitable hedge fund managers. For several hedge fund managers to make 15 on billions of dollars means A LOT of small traders will need to feed that kitty. The only time the majority wins is when there is a shift in overall productive capacity of society, such as the impressive stock rally of the 808217s and 908217s 8211 8211 the latter part of which was more euphoria (bubble). In my opinion, there were some major advances in technology during that time which could potentially do a lot of good, and thus the rise was warranted. Unfortunately, we have mostly squandered that potential good on primarily creating products and services which decrease productivity instead of increased it products which provide us an escape from the real world as opposed to help us harness the real world. These major fundamental shifts do no occur often, which means that in the lulls between most traders and investors will lose money. Why Most Traders Lose Money 8211 Bottom Line The bottom line is that traders must stick to a well-defined plan and trade that plan even when it is uncomfortable (and it often will be). The vast majority of the population, and thus the vast majority of traders, buckle under this uncomfortable pressure8230the same way they reach for the chocolate bar instead of the carrots. Since most of the population is more than happy to join the crowd . by having some discipline combined with a decent strategy it is possible to be one of the few successful traders who actually can leave the crowd before it implodes on itself. I welcome your reasoned comments, rebuttals or questions below, whether agree or disagree. There is some great reading on how our biology seems to be wired for crowd behavior. Robert Prechter has compiled some of it in his book 8220 The Wave Principle of Human Social Behavior and the New Science of Socionomics 8220. As promised, here is that short video on how hedge fund investors usually get in and out at the wrong time, even when the hedge fund is successful. Video: Prechter on Hedge Funds and Herding Watch this surprising description of how hedge fund investors behave: Cory, I stumbled onto this page while looking for a figure as to what percent of the investing population trades Futures, for a book I am writing. No luck finding that number, but I do sometimes like reading articles that people post about making money trading. Usually I find humor in the comments of false prophets suggesting they can show you how to make money. I started reading your article and have to say kudos to you for speaking honestly. Friends ask me regularly how to make money, and I always inform them not even to try. Just invest, watch your tax efficiency, as expenses and gains are one and the same, and over time hope for the best. One thing I do disagree with though is your comment on statistical aberrations. It is incorrect as a function of the time interval you are using being 1 year intervals. An active professional trader can be reviewed each year on performance of 250 intervals, average and standard deviation. When I think of my personal trading performance, that is how I always saw it, what percent of DAYS I traded positively. Over my career that gives me several thousand data points. Two other comments I might make for anyone that still wants to play this game, a game I no longer play myself. Rule 1 8211 (of my 97 rule number 18217s) 8211 A great trader is not someone who sees the future correctly, it is someone who manages their risk correctly. If you are playing a game that is essentially 5050 and you take your profits quickly and let your losses run. You are now creating an unequal distribution of scale between your winners and losers, and you are dead before you start, time will finish you quickly. This takes a serious emotional control, one almost requiring a sociopaths personality. 2- Some people really are just spectacular traders 8211 thinking you can play against these people is the equivalent of me thinking I can line up at Right Offensive Tackle against a 300lb Defensive End. The final outcome is not going to be good. The more sophisticated the product 8211 think options 8211 the worse your disadvantage gets. No one reading this should ever trade options. Once again, Kudos to you for your honesty. It8217s rare. Matt Williamson says: 8220No one reading this should ever trade options8221 Options are both far easier and far more difficult to trade. When structured correctly, a profitable trade can be had while being wrong on direction, timing, and volatility direction, the three main components of option pricing. In short, just because YOU can8217t do it, don8217t cast your blanket of dispersion on everyone. I do it successfully as a retail trader. Det kan gjøres. It8217s just damn hard to figure it out. Matt, With all the generosity of my heart, I wish you the best. I didn8217t know I had auto-reply on, so I received your comment today in my e-mail. I will stand by what I said and inform you it is coming from someone who started their career at a boutique derivative firm and went on to hold title as head of trading at three of the largest trading firms in the world. My core competency is non-linear derivatives and synthetic structuring, and I pretty much liked to trade in 1,000 lot clips, but thought nothing of taking down 10 to 50 thousand at a time, and have carried into expiration strike risk of over 200,000 on several occasions, which is rather insane, even by my standards. I was also a member of the NYMEX, COMEX, AMEX, CBOT, CBOE, and CME before I turned 27. I retired by the age of 34 because I burned out completely and just couldn8217t do it anymore. I also never had a losing month in my career as arbitrage removed the variability that I am sure you see attempting to trade options directionally. I do wish you well though. Regards, - wrldtrst Hey again Cory, I just re read this article and it really does ring true with me. I am trying to understand why everyone here in the U. K. is so shocked at Trumps win. Investment analysts across the board are all scratching their heads saying 8216no one saw this coming8217 WTF The excuse is that all the polls and press had it in the can for Hillary. It just reinforces that the markets ARE an extension of people as a mass. This insight may help me to understand how the market is more likely to behave, do you use that model or do you track back from mainstream thinking to market behaviour, which way round do you assess Thanks Cory Mitchell, CMT says: This is tough question, because it changes. Much of the time it is good to follow the herd to a certain extent. I am a trend trader mostly, so when things are going up I am a buyer (only on pullbacks though). But there does come a point when that sentiment becomes too strong. If a trend has been going up and up and up, eventually everyone starts to take it for granted. By that point nearly everyone who wants to buy, has. With no buyers left, the price starts moving down. Or we also see sentiment extremes on the downside. As oil was falling earlier this year and last it was profitable to bet on the decline. But once you start reading the mainstream media talking about the disappearance of oil, and nearly everyone you talk to saying oil is finished, that is typically when I start buying (I also started buying because we were near 2009 lows in oil8230another bad time in history but oil rallied aggressively off those lows). So I look at sentiment a little bit, but typically you can just see it by looking at long-term charts (for investments). You see long-term areas where the price has topped out (sentiment too bullish) or bottomed out (sentiment too bearish). In between I typically don8217t invest8230I just look to buy investments when everyone else hates them8230but that history dictates is a good time to buy. (Sometimes adjustments need to be made for inflation, company growth, etc) Shorter-term trading is really the same thing, but typically that I am not looking or thinking about sentiment at all. I am just trading trends and taking trades based on favorable reward:risk ratios and making assessments of whether the trend is likely to continue or not (based on recent price action8230which gives an idea of whether buyers or sellers are likely to be stronger in over the short-term). So mostly I rely on my charts, but for investment purposes when I start to hear a lot of extremely biased proclamations on the market, I usually start trading in the opposite direction of such claims. Hi Cory, Thank you for such a thoughtful response, it8217s really helpful. Also a great new post today from you, I wish I was already set up for daytrading to take advantage of your insights Eric Martin says: Hi Cory, Nice article. You said, 8220In my opinion, there were some major advances in technology during that time which could potentially do a lot of good, and thus the rise was warranted. Unfortunately, we have mostly squandered that potential good on primarily creating products and services which decrease productivity instead of increased it products which provide us an escape from the real world as opposed to help us harness the real world.8221 I8217m curious what those 8220escape8221 products are I8217m guessing video games8230 not sure. Bora Yagiz says: what a depressing article. just what i needed8230 Cory Mitchell, CMT says: Or liberating. Each person can forge their own path. Just depends on how you look at it. an article telling you have basically ZERO chance of making can NOT be liberating sorry8230 not more than the motto written on the gates of a concentration camp (8220work makes you free8221). unless, of course, you have a different definition for that word. censoring those who disagree, and leaving only positive comments, eh maybe its depressing because the points the article is making about how traders loose to the markets hit sensitive points within you. maybe you just don8217t want to do the work to investigate these points so become a better trader. how do you think it happens. you wake up one morning and you8217re a great trader. Nei. it takes your work. most traders have an idea of wht they think the markets are. they romanticize it so they can be the winner. but reality hits and the market doesn8217t care what a trader thinks. its being the market 100 and if you want to capture profits. get in the flow of the markets. This is such a great article and the comments and your replies are worthy of a post in themselves, perhaps you could elaborate on the theme in your reply to Abhi8217s question, there are some real gems there to be polished The whole article has really got me thinking. I have been seriously following investment blogs and websites for a few years now as I find it an intriguing subject matter which straddles many other subjects including behavioural and group psychology and social anthropology (which was actually my subject at university). There are some incredibly bright and interesting people talking and writing about this field and I love to follow these intelligent guys, I wish I could meet them too and listen I also enjoy podcasts, which I would love to hear, if you have one. But, strangely, I am not actually invested in the market as yet. Ha I may be a late straggler and lose everything I am enjoying the debate and insight and often philosophical humour that prevails in the articles, there is a depth in this field which is difficult to find in political, economic or business blogswriting. I8217m in it for the wisdom, philosophy and humour and the personalities of the people behind the blogs. Having said that, naturally I would consider investing and I have a number of fantasy accounts to play with strategies. I have friends who day trade but I would not previously have considered that as a viable way to earn income. But on reading this article, I am thinking day trading would be a very rapid way to learn the reality of trading and the stock market. I feel bad for commenters Fab and Sarbinson8217s accounts of their losses after decades in the market. Would day trading be a kind of microcosmic method of learning about how markets work and how to best read them and work in them for a profit Cory Mitchell, CMT says: Thanks for the feedback. Yes, day trading is like the microcosm of investing. It will show how prices move. Typically patterns that play when day trading also play out over longer time frames as well. While my investing strategies are different than my day trading method, they are based on similar concepts. If the ultimate goal is to just invest, then learning to day trade8211which takes considerable time and effort8211seems kind of pointless. Better off just to focus on learning how to invest. But if day trading is the goal, then by all means focus on that. Whether day trade, swing trading or investing a person only needs to learn one strategy that works for them in order to make money. All other knowledge is excessive, and not required for making money8230but may be accumulated for the sake of interest, or to sound intelligent in conversation Gud Evng Every One, Mr. Cory Mitchell Sir, it8217s v. insightful amp inspiring article, its cutting the noise and provides smart ideas. Thnx kudos to u, for detailed explanations, its v. rare . My name is Amit, a independent research student and rampd pro from India, Apart from research and work i am having passion in Investment Management, Applied Behavioral Finance amp Analytics, Behavioral Science for Investing. writing, reading, learning new things etc i want to utilize my research:analytical, due diligence, attention for detail skills for doing investment analysis and do research based trading aswell, but after reading ur article now i want to adjust the focus i have 1 question in 2 parts - a) sum people says 8220MIMIC 8216ACTIVIST8217 INVESTOR8217S MOVES8221,what ur take on this idea b) whr to find the (activist8217s) foot prints, in India as well Thank you for your time and consideration. Leadership is not about ur title, its about ur behavior. A Wise Man Cory Mitchell, CMT says: a) MIMIC ACTIVIST INVESTORS MOVES, what ur take on this idea People can do this. But ultimately they still need to follow what the successful trader is doing. This is quite hard. It is no different than just following a winning strategy (following a strategy or a person are the same thing). Most people can8217t do it, and end up deviating. So basically no matter what approach you take to the market, assuming it can theoretically produce profits, the ultimate success of that plan relies on the individual8217s ability to follow the plan. If you follow what a winning trader does, exactly, you should be profitable. Yet few who take this approach are8230see video at end of article. b) I do not know the successful traders in india, nor do I follow much about the Indian stock market, so I can8217t offer any guidance there. Cheers, Cory Great article. Now the even greater irony. Even without reading the comments above I would imagine the overwhelming majority of such commenters will indicate they totally understand what makes a trader successful. Cory8211 Thank you very much for your insightful analysis The more I use behavioral analysis in my investing, the more successful it becomes. 8211Steve RUB1G (RUB1G) says: In the end, it8217s all about identifying the kind of market your trading in and recognizing it when it shifts to a different type of market and being able to change strategies that work given the market you8217re trading in. To get to that point, you have to have inherent, God given traits of perception, patience, intellectual capacity and nerve and years of experience. Most don8217t have the innate ability and those that do, usually lack the staying power. That8217s why there8217s so few who are truly profitable. This is a great article. People are so obsessed with numbers they forget the market is entirely psychological and largely qualitative and it8217s why I find markets fascinating. I realized the keep up with the Jones8217s thing ends in doom every time if you stick on that too long. Sell sell sell buy miners. Hi everyone, I keep studying and learning and trying different strategy but none really seems to work I have done courses read books and still I can t find anything that really give me an hedge, so I start wondering do they really exist a profitable strategy I have done long term trading( holding up to 6 month) for 2 years and did well 30 average return per year, I have been day trading for 1 year I m down 10 Cory Mitchell, CMT says: That is a respectable day trading return in your first year. Many people lose all their capital in the first year of day trading. You are likely doing some things right, it is just a matter of continuing to fine tune your approach. Look through your trades, and spot areas you could improve. For example, is there a way to make your losses slightly smaller Does the price tend to run a bit further after you get out If it does you could seeks to expand your profits slightly. Very minor changes over many trades can take you from being a losing trader to a consistently profitable8230but it takes constant monitoring and adjusting to current market conditions. Your other option is to stick to longer term trading, as that seemed to do well for you thank you, yes many times I get out and price keep going up I went from 70 winner to 70 loser since i m studying technical analyses Cory Mitchell, CMT says: In what way The market operates as a leading indicator for the economy. There are times where there seems to be a disconnect though8230. and we will shall see if it continues to act as a leading indicator in the future as more and more central banks interfere with the market. But markets (more accurately: traders and investors) buysell based on what is expected in the future, which means markets move in anticipation (lead), and then based on the trader8217s conditioningbeliefs they buysell based on what they think will happen next, and so on. Very insightful article. Indeed market is irrational. Oil went up yesterday when it seem that oversupply is still rampant in the market. Lost money by betting against it Cory Mitchell, CMT says: Losing trades happen. That is part of trading. But believing oil will fall because of oversupply on a particular day is not a prudent strategy. Oil has been rising for weeks in spite of oversupply. Successful traders trade off things they have tested and that have proven to reliable over and over again. Also, oversupply was the reason for the decline that took oil below 30 in the first place. That information was already priced in. It8217s old news. Almost everybody was on-board with that idea, and that is why oil fell so much. But as the article states, when everyone is on-board the trend can8217t continue. Oil prices had to go up (in the Canadian Investing Newsletter I have been buying commodity stocks since January). Markets move ahead of the news. They started dropping as oversupply became a potential problem, and then fell heavily when it started getting some publicity. But markets are forward thinking8230so the price rises in anticipation of supply eventually dwindling because some oil companies will go bankrupt and as oil producing countries get squeezed financially there is an increased chance of conflict which would further increase oil prices. The drop was priced in, everyone was onboard, which means there was no one left to keep pushing the price lower8230.so it had to go up. As it pushes up, everyone who sold at the bottom is forced to buy and get out of their losing positions, pushing the price up further. Ultimately though, none of this matters. Study the charts and find patterns that work over and over again. They are there. Then don8217t let the news of the day distract you. Trade the pattern when it occurs, and you will find greater success in the markets. Hi mitchell, I have created a simulation chart based on random numbers, resultant chart look very similar to our real market charts, there will be trends small, major and all kind of, now seeing that trends also form in randomized charts and today most trading happen by algo hft machines, which are not following trends in most cases rather selling buy to capture the spread, so it confuses me whether the trend formation happen due to conviction of many tradors or some other reason behind it. Cory Mitchell, CMT says: Great point and question Abhi. I think your question relates to the fact that something appearing similar is different than cause and effect. La meg forklare. If you go into a casino, you can track whether the roulette ball falls on black or red, or if baccarat hands come up player or banker. If you chart this, you will see trending periods, as well as choppy periods. It will look like a stock chart. Yet we know that the results of the ball falling on red or black or the cards dealt in baccarat are random (assuming fair play). So you have a good question8230if the random charts generated above look like stock charts8230are stock charts actually random I say no. What creates the random charts above can8217t be controlled or impacted by the players in the game. Yet with a stock chart, the players do impact what happens on that chart. I can buy and buy and buy, causing an uptrend. But in the casino it doesn8217t matter what I do, the cards are already determined. So while your random charts may look like a stock chart, the cause and effect are different. Stock charts may appear random, but the underlying driver is fear and greed. On a random chart (or in the casino), fear and greed can8217t affect the outcome of the cards or spin. Stock movements are created by thousands or people (or few) buying and selling based on their future expectations, but then reacting as their expectations come to fruition or not. While I have never tried, it, I doubt the strategies I use would work on random data. They work on real markets because there are moments when you know emotion will kick in, and the market (other people) will react in a very specific and predictable way. I do view markets as random much of the time though8230I can8217t make sense of many of the movements. Yet, trading is about finding those specific criteria and moments where the next move becomes quite predictable. You don8217t have that on truly random charts (or games), and therefore, comparing markets to randomness is likely a fruitless endeavor. The real market is about thresholds and conviction (and other people8217s lack of conviction or changing their convictions), and that is often what drives trends. For example, say I decide to start buying a stock. I don8217t even need a reason, I just start buying. Other traders notice this, and also start buying. Anyone who sold to me is now in a state of pain as I continue to push the price up. Eventually they start buying (or covering their short positions) because they fear missing more upside, or their short positions are becoming too costly. As more buyers step I become the seller, unloading my shares on those people. That8217s the power of markets8230one person or a group of people8217s convictions can drive the price (changing other people8217s convictions, and thus creating a somewhat predictable outcome), which then brings more people into the fray. Then, as the conviction changes again, the same thing happens the other way. The chart may look random, but we collectively affect the outcome8230which makes it not random. This is why most people lose. They chase the price, and then person or group that started the whole move unloads their shares on these people. The way to make money is research and practice ways of spotting where emotion will be high, and a thus a predictable outcome is likely to follow. Most people don8217t know that, and so they buy or sell and hope (with little conviction) they are right8230.and those are the exact people who will create the high emotion trades that make successful traders money. Hi Mitchell, thank you so much for the detailed reply, your blog is eye opening, I agree that, chart look same but the causes are different and in trading it is greed and fear, which a trader can know, until the trader knows about it, stock market is similar to random number chart btw we hear all the time that algo trading in majority, how much the greedfear factor play here I deploy some of the high speed order placing mechanism through the robotic softwares that i8217ve developed but i have no idea on exact mechanism that large autohft trading corp use, it is mixture of man and machine btw you can take a look at apps. techfiedstock for random chart, just need to refresh or press redraw, funny that you will sometimes see very clear support and resistence lines. Although chart is based on pseudo random numbers but i think its not going be radically different from true random generators made using hardware. Cory Mitchell, CMT says: Interesting8230those randomly generated charts do look like a real stock chart. But yes, the causes behind them are different. As for mechanical trading, there is technically no greed and fear on the part of the machine, but it is still impacted by greed and fear since other participants in the market are driven by these emotions. Also, even if the market was all mechanical, the bias and strategies of the traders making the robots would create chartsmovements that look like what we have now. The market is still a zero sum game. Regardless of the input (mechanical or man) the end result stays the same8230the best tradersprograms win, and those that don8217t know what they are doing will lose. right, you are always to the point, I am yet to see any profit thru my frequent scalping8230. but i hope things will be different now on. Excellent article Cory Mitchell, thank you for sharing it. It has been really helpful. Took a day off from trading and came across this article. It8217s certainly one of the best articles on trading I have read. The key takeaway (of many) that I got reading this is that the market is a living organism and is a reflection of the 8220mood8221 of the traders in that particular marketinstrument. What I am beginning to understand and dread is that in a market like futuresES for example, even a single contract bought or sold can have a ripple effect on the market. What I have seen trading a simple suppresis strategy recently seems to support this hypothesis. My results in SIM are much better than in real trading. This leads me to believe that perhaps there are algos running that tracks open positions and number of contracts being traded. For example, if I am looking for a reversal after a run up (I identify my areas of interest premarket and use order flow) and short 10 contracts at my resis area, can these 10 contracts in real trading actually affect the movement Are there algos that track that there are now 10 extra (vs SIM) open short positions and continue to push price higher to set off stops Let8217s say it does push price higher to set off stops, and another trader jumps in to short 5 contracts, will that 5 contracts affect price to move higher Machine learning at it8217s finest happening here Cory Mitchell, CMT says: Yes, on small and large scales that happens. Your orders do affect the market, because someone else is on the other side of the transaction and doesn8217t want to lose. Whether it is one person or hundreds, there is a collective action of those on the other side of the trade to do everything they can to make you lose (and others on your side of the trade as well). And you, and other trades on your side of the market, are trying to do the same to the people on the other side8230whether we like to admit it or not. Here8217s some food for though. I used to trade thinly traded stocks. I would watch the level II and see if I could spot bids and offers which looked like short-term traders. I would then take their shares (whether they were bidding or offering) and then continue to push the price offside on them. The goal was to force them out of their position when they bid or offered to get out of their position at a loss, I would exit my trade at a profit. It is a zero sum game, if I made money, the other trader(s) lost. This is a small scale version of every single transaction that occurs in every market every day8230whether a market is liquid or thinly traded this type of action is going on. It is easier to picture though when talking about only a couple traders battling it out in one stock. It8217s not manipulation, it8217s not unfair, it8217s how the market is set up. Now imagine I and the other trader have millionsbillions of dollars to trade with. Other people may see us going at it, buying and selling to each other like crazy trying to force the other guy out at a loss, but it has nothing to do with technical or fundamental analysis. Other traders may join in, not knowing what is going on. Now you have a scenario which reflects every liquid stockmarket. That is why I only trade off the price action. My goal is to join a trade as soon as I see one side taking victory over the other, then the other side is forced out and I can ride that price wave. The premise is the same as what you talk about. Analysis (in day trading) matters but not as much as most people think. It is more about adaptation. I (or others) can push the price for no reason at all except to make you exit and produce a profit for myself. Other traders can do the same to you or me. I now trade liquid instruments because I didn8217t like picking on other individual traders, but trading something liquid isn8217t any different. I am still trying to take positions where I know the other person is likely to lose. Otherwise I lose. That8217s the game. That doesn8217t mean it8217s impossible to make money though. There are still patterns that develop. If someone noticed what I was trying to do in those stocks, they could have smoked me, I did get smoked from time to time. Trading is much more dynamic than most people think..you are up against thinking and learning peoplemachines. They will not politely let you take their money, they will fight back, and try to take yours. Longer-term there are factors which drive large scale social mood changes which affect prices over the long-term. But in day trading it is more like chess match8211you see what your opponents are doing and they see what you are doing, and both of you are trying to do what you can to win and outsmart others. For example, some days there are may be patterns where traders are triggering false breakouts and then taking the price back the other way. Instead of getting angry and calling the market unfair, notice the pattern and adapt to it. ES is probably one of the best markets. I really like it and it is one of the better ones to trade. But make no mistake, the person who fills your order to get into a trade does not want to lose either. It is not cause for dread though. It is an opportunity. When the price action dictates that buyers or sellers are winning the battle, a fairly consistent price action follows because the losers are forced out. That doesn8217t mean you win every trade8230I only win about 60 to 65 of the time, but more often than not if you watch price action you can see the shift of who is winning. Sometimes you will be wrong, and that is fine, but align yourself with the trend and those who are in a stronger position and the odds will favor you. If you find yourself on the losing side more often, look at the charts8230spot the trend and which traders whereare in a stronger position. Consider why you were fooled into picking the wrong direction (or enteringexiting too early or too late), and then adapt. The Trader Mentoring page has some examples of charts with trades from ES: vantagepointtradingtrader-mentoring showing the types of price spots where the odds shift back into the trendingstronger player8217s favor. What if all traders just went long when their trades went against them Just wait it out. Your cash will be useless until that time but at least it won8217t be a loss. And do some traders not use limit stops OK, I8217m not a trader but am trying learn how to manage risk better. Cory Mitchell, CMT says: Lots of traders make 10 or higher each year. But the vast majority don8217t, even if the hedge fund or long-term average gain of stock market is 10. As the video at the end of the article describes, even if a hedge makes 10 a year (or more), most investors within that fund actually lose money, because they deposit money and pull it out at the wrong times. Hi, what if everyone understood that and stopped trading 8211 forever And started being productive instead What if it was against the law to trade accounts below 500 000 Oh, and side notice 8211 the big money goes bust to from time to time, not only retail. And PS. the answer to these questions is probably a world war or spoliation, plunders like in the old days. There must be the transference of capital goods from small to big, weak to strong 8211 no matter what 8211 so pay your dues and thank almighty you don8217t have to kill to eat. I must add something I noticed recently. Brokers have been putting out comparisons for how profitable their traders are. Like discussed here: forexmagnatesexclusive-q2-2013-us-forex-profitability-report-35-of-retail-clients-gain Beware such numbers, as they don8217t tell the whole story. In a given quarter about 35 of traders may make money, but 65 are losing. Span that out over several quarters and the statistic indicates that many of the profitable traders will gravitate to the negative sphere. Yet it may not show up in the quarterly stat which will usually stay around 3565. Unless it is the same 35 staying profitable, the statistic is useless. To stay in that 35 you need to be consistently profitable, but this stat doesn8217t address that. The 35 that are profitable could be different every quarter and in the quarters they aren8217t profitable they are part of the losing group. We also need to consider survivorship bias. The stats considers trader accounts that are active during the quarter. If you completely draw down your trading account this quarter you are counted in the losing 65. But since you will be inactive next quarter (no money and no trading) you aren8217t counted as a loser again. But this tidbit throws a wrench the idea that 35 of the traders are profitable. Because it doesn8217t count all the guys who went broke in previous quarters. The stat that needs to be divulged is this: Of all the accounts opened since the brokerage began, how many are showing a profit today (or a profit when the account when the account was closed) You ask that, and I am sure you will get a much much smaller of profitable traders. A vast majority of the accounts opened will be inactive due to depleted funds. Here is an example to make this clear. While I was a trader on a trading floor we had about 30 full-time traders. In a given month at least 25 were profitable (but they were all profitable overall, otherwise they wouldn8217t have a job). A high percentage of winners. But what the stat doesn8217t tell you is how many traders tried to make it onto the floor and failed. Over the course of 6 years we probably had about 10 guys a month come in for training and attempted to make money. That is about 720 potential traders. They all failed eventually or a few became part of the 30 full-timers and other formerly profitable traders fell out. So instead of 25 out of 30 being profitable (this is the type of stat the brokers are divulging, which is bullshit), we need to count the guys who blew up. The real stat is that 25-30 out of 750 were profitable, or about 4. If anyone has a historical brokerage account stat like that I would love to see it8230especially if it proves me wrong. helen senior says: FYI trading is not a zero sum game. Most traders are under this massive delusion. Market makers have an obligation to provide liquidity. The odds are extremely high that your broker is providing the opposite side for your trades. When you lose, that money becomes their profit, plus the commissions. So with their variable spreads and your stop losses, their software aims to take as much money out of your account as possible. Once they8217ve made their quota, the traders who are lucky enough not to have gotten stopped out might make a profit although this is nothing compared to what the brokers will have made in the process. Why don8217t you ask your broker who their liquidity provider is and how their variable spreads are calculated. If you8217re with a market maker or dealing desk broker, chances are you8217ve got no chance of making consistent profits. Your success or more likely, failure as a trader has much more to do with this than any strategy you implement or psychology you adopt. I don8217t think this is the case helen because if you open different charts from different brokers the price movements are the same, to say a brokers softwares is hunting stop losses would mean prices with that broker are not consistent with market prices with other brokers, but that is not the case, i once thought my broker hunts my stop losses but i when i opened different charts the price movements were all synchronised. The point that trading is most definitely not a zero sum game is correct. It is a negative sum game. The buyer and seller bring X dollars to the table but some of that gets raked off due to commissions and spreads and other ancillary costs (data feed, subscriptions, etc). A zero sum game would be a game of poker at your friend8217s house. In 1990 I went through membership class with 19 other people. After six weeks, I was the only person still standing. The 95 rule seems to hold. I would say that of every 100 people that lasted maybe 3-4 were truly standout, raking in the money, hand over fist, traders. Now if you go to a top Ivy school 8211 or equivalent 8211 and get on a top trading desk at a top investment bank, your odds invert and you probably have a 95 chance of success. Success being seven to eight figures a year. So if you want to be a successful trader start thinking about it when you are about 10 years old. Legg igjen et svar Avbryt svar
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