Floor reflections on trading

But let's think: why he reproaches himself? For that does not comply with the discipline and should not be a method. Or, if you drop all the husk and look at the root - for the fact that the trader succumbed to the pressure of the crowd, and ceases to be himself. Remember, the main features of the market - fast motion, unpredictability and so on - it's basically the dynamics and psychology of the crowd. A crowd psychology always destroys discipline.

And one more thing. The market is and will always be. You - no. Especially if you lose all your money. From these simple arguments just a step to understand the critical importance of the method of how the knowledge and discipline of knowledge in action. Remember that the crowd always takes you independence. In trading, it inevitably ends in a loss. Only method helps you to separate you from the crowd and gives emotions, always guided and guides the behavior of the crowd, manage your trades. In this formulation, the discipline - it's just a mechanistic implementation of your method.

Let's look at it from the next corner. Let's say you have a method, but there is no discipline. This means that you are under the influence of various emotional and any other factors, in fact, arbitrarily deviate from the actions dictated by the method. Thus, in practice, you implement a different - or, more precisely, a new method. Each of these new methods separately might not be bad (and even, most likely, all of these methods are great.) But it is possible to learn and prove only the systematic disciplined their application. Also have an option to elect a random realization of even the finest of methods - a guaranteed loss. That's why I say it again: use the method, no matter what, but use it constantly. Most methods work well, provided that you comply with them.

An example from my own practice. I wrote a vending machine - a program that, based on information about the price of the shares delivered to the real-time, making decisions about buying and selling. So, on a computer keyboard on which the machine, I have a sheet of paper is printed in large type the words: "Do not interfere with the program!".

Of course, you have to find a method that suits you, and then to use it responsibly. It is very difficult to use the method in which you do not like something.

Risk and reward

What we want to achieve as a result of trading? What is the risk we take to achieve our goals? Most trading books you find a variety of discussions on this topic. There are even formulas that determine the optimal risk and the required lot size for trading on the basis of a given amount of capital and the level of success of the chosen strategy. And all this can be reduced to the exact numbers - what is the maximum risk of the trader can make in any given transaction.

All organizations using hired traders (proprietary traders), have clear schemes of risk / reward (Risk / Reward). Unfortunately, very few traders follow these schemes.