Forex and gambling

12. The psychology of a trader

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Many believe that the Forex trading game. This is partly true, but unlike the game of Forex trading is a real opportunity to earn a living. Investments in the currency market do not require deep mathematical knowledge, but in Analytics trader should understand. One of the most important abilities - the ability to interpret the news.

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Our dealing center has over activities in the international currency market and gives the possibility to earn on sale of currency for both experienced and novice traders (Forex traders). Forecasts of leading analysts of the market, and, including trading robots and signals enable traders in their work.

The initial contribution that would be needed to get started in Forex (despite all the stories, wandering in the Network) is very small. First, you will have the opportunity to trade, to thoroughly examine all the rules and nuances of the market even without any investment (with the help of the demo account no Deposit or Forex accounts). In addition, the Forex market does not have to fear crises and sharp falls. Disaster that make of the enterprising and intelligent millionaire bankrupt, peculiar only to the stock market.
Consider the benefits of:

"trading is like a game of chance". Some say that trading is a game for money, but for now let's concentrate on the judgment that trading is similar to gambling. Analogy is a comparison between the two concepts, similar in some respects. People use the analogy to explain or understand complex topic. Trade difficult, because about 95 % of those who are trying to sell fail. Thus, we must use an analogy to or understand trading, or understand that this is an impossible task, type try to survive, jumping down from a high cliff. Some will survive after the fall, but most won't. If trading is not possible, the analogy is not too help us. But, assuming that the trading, as the work is viable under the right conditions, most of the traders can use the analogy to understand the complex problems of trading.

When considering any analogy is necessary to avoid spoofing analogy actual phenomenon that is required to understand: trading is like a game of chance, but it is not an absolute similarity. The dictionary definition of gambling: "a game based on the probability of a or the bet in the hope of winning money." In Innerworth we sometimes get letters, упрекающие us in popularization of the "myth"that "trading - a game for money". Now look at this definition from the dictionary. Trading really is a game based on probability", because there is no 100%sure that you can make a deal and get a guaranteed profit. And why are You trading (or invest)? You do so in the hope of winning money."

So, semantically, trading - a game for money. "But the casino is the only officially sanctioned institutions, where the law of gambling and institutions that serve the trading and investing is another" - with passion scream critics comparing the trading cash game. Well. Here is another argument.

In "Textbook of diagnostic and statistical manual of mental disorders," "Bible" of all professionals dealing with mental illness, a disorder called "pathological gambling". As a rule, it is a common gambling. Gambling can become a tendency similar to alcoholism, but there is no mention of "pathological trading". So I guess that society as a whole has yet to recognize pathological version of trading. If for You is so important to prove to your friends that You're not playing for money while trading, so be it. But regardless of how You call trading is only formal name, because, whether You like it or not, You play for money. Now let's get down to business. What trading is like a gamble? And as this analogy may help You understand the trade?

no one invented the absolute signal, or an indicator that would allow the trader to expect next market move with confidence 100 %. There is some risk. And again, this is something that makes trading game. So the analogy with the game on the money - useful. The fact that You can lose money must be at the centre of your consciousness; You do not put their money in an FDIC insured savings account. Once You accept the risk, You can take precautions to protect themselves. If You do not want to act as "pathological" trader, it is reasonable to clearly define your own risk before entering into a deal, take measures to protect and develop an exit strategy in case of movement of fate against You. Because trading is a question of probabilities, in your best interests to limit your risk a small percentage of the total number of capital in any single transaction. This will help You survive a serious drawdown and stay in the game. Then You act like a professional player, not a lover.

Perhaps the biggest component in analogy with the game on the money - the state of mind of a trader. If You look at trade as the game a chance, it allows You to think in terms of probabilities: trading is a question of capital accumulation by chance during a number of transactions. The result of the single transaction has little importance, if a sufficient number of transactions, You will receive the total profit. Mark Douglas gave one of the best descriptions of this thinking strategies in the book "trading in the Zone". When playing some game with chances, the distribution of all possible outcomes can be represented by a probability distribution in which some of the results are more likely than others. For example, when You throw a pair of dice, there are 36 variants of their loss, the chance of 3 % get 2 or 12, and a chance to 20 % get 7.

Traders try to find a deal with a high probability; it is like a bet on the loss of 7. You can get 7, but there is still a small chance to get 2 or 12. But the larger the number of times You throw the dice, the more distinct in your favor works the law of averages. That is, You get 7приблизительно in 20 % of cases, if you throw the dice long enough (but theoretically there is still a chance that You will never get 7).

dice Game similar to the use of trading strategies with reliable statistics. If You use a trading strategy, which gave the history of 80 %, You can expect that it will work in 80 % of cases. It only remains to easily and mechanical fulfill strategy lot of time, so that the probability worked in your favor. But unlike a casino, where known probability, and "weaknesses"essentially identical, trading strategy is rarely performed exactly the same; history does not repeat itself. The analogy with the game for money in this case does not work. A professional player has the best probability, because the theoretical laws of probability related to the traditional casino games, and not for trading strategies.

When You're agreeing with the statement that You are playing a game of chance where, the more transactions comply, the better the results will correspond to the distribution of probability in your favor, the more confident You will feel. As You follow that strategy many times, you can remind yourself, "I trust my strategy, a multiple of its repetition will make the probability of working for me". The analogy with the game for money in this case gives You the advantage.

It puts trade in clear limits. You will feel calm, happy, and is easy to trade, the highest performance. In the end, there are many advantages to treat trading as a game of chance. Accepting this, You immediately confirm the potential risk and take steps to minimize. At the same time, You can use a different thinking strategies, despite the sale in terms of probability. Calm, confident approach that will bring the kind of thinking that will give You an advantage.

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