What is any trade tactics? Let us try to "dissect", to consider the "inside". Any trade tactics, simply put, is a goal (task) and a list of actions that should lead to reaching the goal. Action, naturally transactions, opening and closing of positions. But to - many problems. When you talk even with experienced traders talking about tactics, to the question - what is the goal, give strange answers, and more often - in General the answer is no. A flight to nowhere. Try to find out a little deeper and you begin to understand - the main mass of traders trades, already having reconciled with complete loss of money, but eager to as long as possible to extend your stay in the market. This is coupled with the hope of good luck that if can "catch" a great movement and taking much money. "This, is, the goal is to trade for the sake of trading.
Remember, narrated by me in the beginning of the article, a joke about old beekeeper? Now, if You thought that should determine the purpose, and everything goes "smoothly", are wrong. All this is not important, but still, I advise to put in the development of tactics of some concrete and achievable objectives. And if You put a task to double the Deposit during the year, do not dream that suddenly get to make thousands of million. This harmful thoughts.
Again have to digress a bit and move to a higher level, the level of strategies. Talk about trading strategies, strategies, money management, etc. All, at first glance, confused. Actually we deal with usual dolls. On the upper level the strategy of Your life, purpose, so to say, the purpose. And most of the "unable to look away from the road to see what awaits him at the end of the path." Just roll on a track. The main strategy includes a lot of other short - and long-term, aimed at different aspects of Your life. Here we will talk only about the strategies of financial, property. These strategies, their "point" must be exclusively on yourself. It is impossible to break the balance. Be sure if You succeed, Your loved ones will also be good. If You will be wasting their strength and energy to help others - you will meet very many difficulties on your way (who the path of the righteous let him be ready to hardship).
Any strategy, in addition to the objectives (strategic)includes a set of tactics to achieve the objective, and may strategies more small-scale (or shorter). All of them are subordinate to and serve the purpose. Here is an example of such a strategy (much simplified):
the Goal is to attain financial independence and high quality of life
Time - 5 years.
the Possible strategy of 2 levels:
Stop work for somebody else but themselves.
Find and implement a business idea, goal - income from $500 a month
allocate capital in the financial markets and create at least 3 of retail fishing supplies. To achieve the General condition of not less than 300 thousand dollars for 4 years.
Rob a Bank
Make a minor crime, stay in prison for 2 years (implementation, training, recruitment)
to Create criminal force structure, get a gun, transport, means of communication (then I will not, it seems, it turns out specific guidance)
a good marriage (marry).
Do fitness, increase breast (biceps and buttocks) and other, (further'll never get boring, they themselves come up with)
Somebody giggled in the back row? Now tell me honestly, have You ever been involved in planning your life? Not dreams, and specific planning? So that's it, and don't need to giggle, "the country of dreamers..."
Any entrepreneur will confirm that to make money the easiest of the three standing before him. What is much harder to save money and grow. If You don't have from the very beginning clear and specific strategic objectives, money will just leave You like water through your fingers, how much You have earned.
let's Return to the strategies that I designated as "allocate capital in the financial markets." This strategy is usually called - capital management strategy, and is devoted to quite a few books by various authors. The main idea of all these works is that, firstly, "never put all your eggs in one basket', secondly accurately assess the risks of various investment in advance and provide for compensation of possible losses and to avoid the loss of part of the capital.
of Course, capital management issues arise when this same capital already have. And if "for the soul" a couple of thousand dollars, what to do?
But to plan their own activities. Yes, the First stage is very difficult and risky. Have to put all of these smaller money make the primary capital. Or, indeed, to implement some business idea and a couple of years spent on the "solidification" capital. To "pop out" from the track it is necessary to spend some efforts, and there is a risk jump in the wrong, which had planned, but quite another. Well, so is our world.
Actually, all of my newsletter, the whole series of articles focused on this particular strategy is to help beginners successfully "jump out of the rut, to help solve the most complicated problem - the creation of primary capital on the currency market of relatively small amounts of money. Then - not my problem. Will understand.
let's Return to the tactics of the trade. As is already clear set of different tactics, United by a common (strategic goal and forms a strategy. For example, the above - make relatively little money the primary capital. When this is used, as a rule, not one tactic, but several. The market is changing, changing Deposit, change You, all this leads to the need to change and trading tactics.
Any tactics, as mentioned above, represents a set of objectives and activities to achieve the goal. An important requirement - tactics should be repeatable and sustainable, that is, lead to approximately the same results when repetitions. Agree, it is of no use tactics, showing high results on historical data, but are very different in real time. Trading tactics should be reported in the form of formalized rules covering every situation that you may encounter when trade. The description should be necessarily reflected the following:
- traded currencies
- the value of capital (part of it)
- conditions for opening a position
- conditions of increasing of open positions (if used)
- closing part of the open positions
- protective StopLoss (reversal at the foot)
- other ways of hedging?
- planned profit
- conditions for closing a position (if not achieved a stop Loss or Take Profit)
- other features
Necessarily it is necessary to define the scope of a particular trading strategy. For example - may also be applied to the flat, when expressed as a trend, if any the nature of the market, for the salvation of Deposit, for aggressive trading, etc.
For the evaluation of the effectiveness of the various TT use the following parameters:
the Average profit for the control period;
Allowable number of stop - loss, the following in a row (the maximum length of "strips" losses");
Often, as a basic parameter use the term "expectation" tactics. What this means (simplified)? Suppose TT involves the of 10 transactions profit by 100 points in 7 cases, and losses of a size of 110 pips in 3 cases. Then Mat. Waiting tactics is calculated: MO= (100*7 - 110*3) / 10 =37. If MO tactics less than 0 - naturally, with such tactics You inevitably lose money.
So when I say listservs, in the letters to find, develop, test, their tactics, I mean that You should get as clear formalized rules of Your trading tactics according to the above diagram for all occasions (market). Only when You create and оттестируете long enough to ensure their effectiveness and reliability - is only possible to speak about the beginning of serious professional work. That difficult? And You thought was opened in a few minutes "caught" a dozen other items and have a rest? No, it will have to work hard, think.
I would Emphasize important, in my view, the requirement: Your tactics should not be in the mind, not in my dreams, not even on the hard drive, and written (printed) on paper. I will not explain why, just take it on faith. For You it shall become a law, the Constitution, in no case do not deviate from the rules, push such impulses (the cause of many failures, it is in a deviation from the tactics of the initial trading plan). Man is weak, lazy, greedy, gripped by fears people, of course, great, beautiful, generous, kind, has the wisdom and the will, but now is not this side of the coin), and You must work in the markets to keep yourself in the iron hands of self-discipline, but it is very difficult. And don't change it (tactics) every day, let her work out "a planned series", vanity harmful, when dealing with money.
As you know, the dragons do not exist. This primitive statement can satisfy only the mind simpleton, but not a scientist,... ... there are three types of dragons: zero imaginary and negative. They all was said not to exist, but each type - in your own special way. Imaginary and zero dragons, called the professional language мнимоконами and нульконами not exist, much less interesting way than negative."
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