Investor, trader, player. Greed is bad. Sergei Riazantsev

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СКАЧАТЬ than 1 hour, and here is trading, because the order was closed after 59 minutes.

      May the highbrow theoretical financiers forgive us if we hurt their tender feelings, but that’s the way it is. Let’s say Warren Buffett, who has been actively trading on the stock market since the 50s of the last century – is he a trader or an investor?

      In the classic works of Benjamin Graham “The Intelligent Investor: A Complete Guide to Value Investing” and “Stock Market Analysis” we find the following definition:

      Investments are operations, the purpose of which is to carefully analyze the situation, save the invested funds and get an acceptable profit. Operations that do not meet these requirements are speculations.

      We agree with this short exhaustive term. In which a clear line is drawn between professionalism and recklessness. When buying and selling stocks, bonds, currencies and anything else becomes a kind of financial casino for a person. Only the place of roulette or playing cards is occupied by stock quotes and a trading terminal. When people are just chasing adrenaline, thrills, the possibility of a random win. They are not looking for earnings, with the help of knowledge and experience, but quick and easy money.

      If, after a thorough analysis of the market situation, a person saved a deposit and made a profit, say, on the EURUSD currency pair – is he an investor or a trader? You can’t tell right away. Let’s leave this task to armchair scientists and indefatigable internet disputants.

      We are more interested in making money on the market.

      Starting to learn

      Most major banks are now actively offering investment services. But there is not much literature in which complex financial mechanisms and really working techniques are explained in simple words. Advertising imposes the installation that “to want a lot of money”, “download an application to a smartphone” or “open a brokerage account” in itself means to be an investor.

      This is not true. We need knowledge, skills, and experience.

      In fact, for a layman, ruin is only a matter of time. According to statistics, from 1% to 2% of traders consistently earn on the market, about the same number work at zero, and about 95% go bankrupt in the period from three to six months. This is one of the most competitive professions in the world.

      The trouble of modern man is the focus on a quick result without personal effort. Press the button, poke your finger at the smartphone screen, read an article with funny pictures in three minutes… But this does not work in serious things, and trading is a serious matter. “Investing is easy… it’s easy to play on the stock exchange… open a brokerage account in a minute from your phone and get a stock as a gift” – all these beautiful advertising promises have nothing to do with the real work of a trader.

      The modern person does not like “many letters”.

      Give him instant working recipes with a guarantee.

      If you are looking for something like this, close the book – this is not here.

      Linear logic does not work in complex processes. Trading is not a science, because it does not describe constant or cyclical phenomena. The main tool in trading is charts. And this is misleading for beginners: well, of course, charts, numbers, mathematical calculations – what is not science! In fact, the charts only reflect human psychology. Fear, greed, emotions. We will talk about this later.

      We will learn how to work with probabilities in conditions of uncertainty. We will learn to think first of all about losses. We will understand the paradoxical logic of trading: a bad road can be good, a good one on the contrary is bad, an obvious decision is unprofitable, an unusual decision is profitable.

      I advise beginners to start with two: “Memoirs of a stock speculator” by Edwin Lefebvre and “Encyclopedia of Stock Trading” by Alexander Elder. Read serious books, think, study. Time will do the rest.

      Fundamental points:

      – It will take as long as it takes. We do not set strict goals and time benchmarks. You have to be completely mentally liberated. Don’t think of training as a project with tight deadlines. Learn with pleasure.

      – Trading is complicated by its simplicity: there is nothing in it except arithmetic and common sense. In this book you will not find any incomprehensible things that require higher financial or economic education. But simplicity is not synonymous with lightness. As running is the simplest biomechanical movement, a one-year-old child can quickly move his legs. But running a marathon (42,195 km) is not an easy task.

      – Negative experiences are often more important than positive ones. For example, to understand that emotional haphazard trading is the way to nowhere. More precisely, straight to ruin. This most valuable invisible asset will help you all your life.

      – We will develop unnatural skills: courage where you want to be scared, and vice versa. Patience is where you want to do everything as quickly as possible. Do not expect psychological comfort. There is simply no such thing in trading.

      – Constant self-study, market observation, comprehension of what you saw. Independence in everything, in trading, in analytics, in discipline. You need to learn to be a teacher and a boss for yourself.

      The most valuable asset of trading

      Most people will probably answer the question of what is the most valuable thing in trading – money. This seems obvious. The larger the size of the trading account, the greater the profit, the better. For example, 1% of $1,000,000 is $10,000-a pleasant amount in all respects. However, we will try to show that there is something much more valuable. What we almost do not pay attention to.

      In fact, money in trading is not a unique, renewable, secondary asset. They are an effect, not a cause. Working material: a bricklayer builds a house out of bricks, a baker bakes bread from flour, and a trader seeks to multiply money. The attitude to the material (stone, flour, money) should be professional. And a brick wall, and a freshly baked loaf, and a bundle of money are only the result of the right actions.

      It takes time to learn these actions. It is our most valuable, unique, non-renewable asset. Paradoxically, it is time that a novice trader values the least. Hours, which make up days, weeks and months, are spent on hypnotizing the price in the trading terminal. To search for and copy other people’s trading systems. To the endless monitoring of news reports, in which there is nothing new in a couple of minutes.

      Real trading experience cannot be replaced by anything.

      Let’s explain with an example: let’s say your trading system is based on following the trend. If you are not taught by experience to ignore volatility (“market noise”), if price fluctuations excite you to a cold sweat, if you have not developed the skill of patience – this strategy will not bring you any benefit. Time will simply kill this trading system. If experience has not taught you risk management – similarly – your deposit is doomed.

      Experience is born only out of time.

      There is such a mathematical action – multiplication by zero, which zeroes everything, and the value of the second multiplier does not matter at all. One multiplied by zero and a million СКАЧАТЬ