What to do when things go from bad to worse?


The problem of method

The next category of problems - the problems of the method. This includes cases where the trader does not have a clear plan or trades impulsively, or does not know what to do, why, etc. All of these problems are the lack of a method or set of methods. What is the method in general terms? This is something that generates signals that instruct the trader to act one way or another. And here we immediately encounter a problem with the first method. The fact that the method itself generates tension between your desire for independence and dependence on the method. Trading without a plan and a method often means a situation where the trader believes that he feels the market and can trade on the basis of this feeling, instinct or intuition. Sometimes such a situation, if it penetrate deeper, means that the trader should indeed be a certain method, but simply does not identify him. Unfortunately, more often disregard the method and plan is a derivative of a very dangerous delusion trader: "I know it better than the market>. Traders with the stereotype quickly parted with their capital. The basis of such errors is very common psychology <foresight>. <Foresight> generates <Faith> Faith sets the emotional predestination, and she, in turn, creates a denial of reality. At the end of this process is only one reality comes to the trader - the lack of finance. So, how to deal with the lack of a method? Get method. In the most general sense. Choosing sides in color trades scored card - it is a method. Transactions that you see in a dream - a great method. I personally know only successful application of this method. On Tuesday, do the opposite of what you did on Monday - is also a method. Trade in references speaker Maria Bartiromo CNBC - is, of course, the method (in the sense that it should be a lot of people in the U.S.).

Methods innumerable. You should first make sure that you have a method. Maybe you have too many methods. Maybe you actively dislike the methods you have used so far. In any case, you can not avoid the question of method. You have to have a method. Just this alone will solve many problems in our list of possible disasters. Next. You need a method that suits you. For example, you want to buy shares and receive mnogodollarovye profit scalp you definitely do not fit. Maybe in a week trading range more suitable for your purpose.

In any case, you must first solve the problem of the search method, and then begin to study it. You have to understand the method and the basis on which you are using it. Why it works, and how you will know that it is not working. It's like learning how to use the main tool of your trade. Your method may be a combination of a few - this is normal. The main thing - to have a method and know it inside and out. Know when the method will serve you, and when - no.

Following the method

It's time to move on to the next category of problems - the problem of following method. This problem is more serious of the two previous ones. Let's start it up again with a survey of traders: <What's stopping you follow the method?>. Typical responses (in parentheses - our comments):
- Emotions (the inability to follow the method of fear or greed);
- Knowledge of the market best practices;
- Lack of faith in the method (a particular method does not fit a particular trader);
- Trading is a method (method better knowledge of the market);
- Arbitrary translation stop / target (set stop / goals depending on the psychological comfort, not the reality of the market or the strategy for what is essentially the same thing);
- Input method, but the exit before, the fear spread (better knowledge of the market method + greed + fear);
- Absence from the signal of the method for greed.