BUSINESS ERA

When the trade goes well, then you feel fine. When the trade goes wrong, it could be like a nightmare. Entire do in the weeks and lost in minutes. These examples are repeated each time as soon as a new generation of traders come to market. Obviously, for the trader if he wants to succeed, it is better to examine this experience and not repeat others' mistakes. This can be achieved by asking the right questions and finding the correct answers by rational observation and logical conclusions.

This article will be reviewed by one question: "What makes a successful trader ?"

Further suggested eleven observations and conclusions made by the author and used them in his own trade. Maybe these ideas will be useful to you.

Observation 1
The largest number of playback Traders are short-and intra-day trading. This is not so much connected with the interim period, but the fact that many of them lack the proper training and well-thought-out trade. Trading during the severe market movements, they are most vulnerable to the "market noise" and also have higher overall costs when trading (spread, communication, etc.) They also often lack the capital. Successful traders are often traded medium-and long-term positions. Often they also have higher initial capital.

Conclusion:
Trading on the medium-and long-term positions, in terms of statistics, a greater chance of success. The same can be said about the level of initial capital. The higher initial assets, the greater the chance of survival.

OBSERVATION 2
Playback traders often use complex systems and methodologies or rely entirely on the recommendations of analysts. Successful traders often use very simple methods. Invariably they use, or a modified version of an existing technology, or its own methodology.

Conclusion:
This seems at odds with the mistaken belief that the harder the better. This is not the case. Logically, it would be possible to argue that the simplified market-based approaches tend to be more practical and less prone to false interpretation. Frankly, even the term "simple" or "complex" have no meaning. What really matters is what makes money and what does not. You can also conclude that to be a successful trader it is important to most of the analysis to make their own.

Observation 3
Playback traders often rely heavily on the automatically-calculated systems and indicators. They do not spend time on the study of mathematical algorithms, and these instruments are not considered distinct from the more popular interpretations. Successful traders are often exploited by computers because of their speed of processing large amounts of data. However, they are also studying the mathematical formulas used indicators and spend the time to understand the market mechanism to the "last boltika.

Conclusion:
If you want to be successful in anything, you must have a good understanding of the instruments used.

OBSERVATION 4
Playback traders spend a lot of time, predicting where the market will be tomorrow. Successful traders spend most of their time thinking about how other traders will react to what the market is now, and in accordance with this plan his strategy.

Conclusion:
The success of trade is likely to depend on the trader's ability to predict what the reaction will cause the market at any event and the availability of well-thought-out plan of action when such reactions. It may be that the successful trader is easier than to be a successful analyst, as analysts have to actually predict the final outcome. If you ask a successful trader, which, in his view, the market will be tomorrow, the most likely answer is a simple clasp shoulders and a comment that he would follow the market wherever it goes.

OBSERVATION 5
Playback traders focus on winning transactions and the high percentage of the winnings. Successful traders focus on Losing transactions, stable income and good about the risk and income.

Conclusion:
The observation implies that much more important to focus on the full risk to the total profit, and not "gain" or "loss". A successful trader is focused on the potential income against potential losses, and have little to worry about the emotional satisfaction associated with the order to be "right" or "wrong."

OBSERVATION 6
Playback traders are often unable to recognize and manage their emotions at the time of trade. Successful traders are aware of their emotions and then researched the market. If the market has not changed, the emotions are ignored. If the market has changed - the emotions appropriate and they are a trade.

Conclusion:
If a trader enters or leaves the transaction, simply based on emotions, then his market approach is not practical and not rational. Strangely enough, the damage can be caused if a trader has completely ignored their emotions. In extreme cases it can cause physical illness due to psychological stress. In addition, valuable subconscious skills trade, which has a trader, but who have no conscious awareness, may be lost. Better to recognize emotions and to analyze the emerging market in these moments once again, to see whether it is the conclusion, based on where you strike a bargain. The proof of this equity withdrawal may be the fact that even a very systematic traders are the time when they conclude a successful transaction without any apparent reason. Usually, this is referred to as "luck" or "being in the zone."

OBSERVATION 7
Playback a lot of traders are worried about that to be right. They love the adrenaline and endorfin that can trade. They should be in touch with the market almost twenty-four hours a day. Successful traders recognize emotions, but do not allow them to become manager of a factor in the trading process. They may not look all day at the monitor. For them, trade - this is business. They are not worried about that to be right. They focus on what makes money and what does not. They get pleasure from finding the best chances to trade. If no such chances, they do not play.

Conclusion:
It is important to be in harmony with the market, but also important to have a life outside of commerce, not to go the limit and did not suffer psychological and physical overload. Successful traders are actively traded, so as not to lose their shape, but also understand that this is business, not mania.

OBSERVATION 8
Playback trader in the event of a failed trade goes and buys a new book or system, and then again from scratch. Successful traders on failure, find out what happened, and then adapt its current methodology to reflect this. They do not jump easily to the new system or technique, but do so only when it becomes clear that the old approach is no longer valid. In fact, the best traders often use methodologies that are organically linked to the main structure of the market and therefore will always be part of the market in which they sell. Thus, the possibility that the market will change its shape to such an extent that the technique will be useless, is very unlikely.

Conclusion:
The most successful traders have a methodology or system that they are consistently used. Often, it is tied to one or two techniques and market approaches that have proven effective in the past. Even a bad plan, which is used consistently, will be better than jumping from system to system. This observation implies that there must be established stylistic foundations of market-based approach before you begin a consistent profit.

OBSERVATION 9
Playback traders look to newly "guru" and try to imitate their technique. Successful traders look for new methods, which appear on the market, but remain at his or her opinion, if some of this equipment can not be effectively applied in their current market approach.

Conclusion:
Once again I draw your attention that the individual trader and his comfort level and knowledge of its system is more important than the latest news or opinion "market gurus".

OBSERVATION 10
Playback traders often do not take into account all factors, which are included in the full process of trade and influence the results. Successful traders understand that winning in the marketplace is the final financial result. More money must come, than to go and everything that affects it, it should be taken into account. Thus the successful trader is also closely related to opportunities to reduce their costs, as well as opportunities to improve its trading system.

Conclusion:
Anything that affects the overall financial results of trade, should be carefully monitored for efficiency.

OBSERVATION 11
Playback traders often refer to themselves too seriously, and rarely find a place for humor in that relates to trade. Successful traders are very funny and funny people. They get pleasure from trade and the first ready to laugh or tell a funny story. They relate to trade seriously, but they are always ready to laugh at themselves.

Conclusion:
No wonder that one of the first test when considering the patient's mental health is to determine whether it is with a sense of humor to their misery. The more serious tone of the patient, the more likely it is that the problems began.

CONCLUSION
And successful traders think and play trading game. However, successful traders do not see the game as entertainment but as a vocation which they practice with intensity and dedication, comparable with the zeal of professional athletes. As a sports metaphor seems relevant, summarize in this note.

As for sporting events, affecting the outcome of factors, both internal and external. We are dealing with the market and directly with each other. And like the arms trade can be for the benefit and harm. Each transaction must be undertaken with professional care and planning.

If we compare trade with firing a handgun, it is important to hit the goal, but it is equally important to make sure the gun is not directed at you, when you press the trigger. Minor differences in how we aims at the market, can have a surprising impact on the final result. In one case, the exact spot shooting, in another - Russian roulette.

based on Tradingarticles.com

Morning gaps drive traders crazy, because they hurl positions and assumptions into unknown territory. These shocking events also force an immediate re-evaluation of the charting landscape to deal with the altered reward-risk equation. But the extra work pays off, because the gaps may predict big changes in subsequent price action.

Gaps reveal shifts in crowd sentiment through single price bars. They can print anywhere within a pattern or trend, but they tend to occur in several common scenarios. Each type of gap generates unique characteristics related to persistence, response during retracements and impact on price movement.

Gaps cut through all time frames and trends, but they represent different phenomena in each one. For example, a breakout move in one time frame may print an exhaustion event in another.

A gap's importance is directly related to its location, range and volume. For this reason, a high-volume gap late in a trend often signals the end of the move.

A gap can print in the direction of the major trend, or against it. When it moves against current momentum, it triggers the only chart phenomenon that can signal trend change without a topping or bottoming pattern. A narrow-range or wide-range bar can stand at the end of the gap event. Long bars predict reliable follow-through in the direction of the gap. Short bars suggest sideways action, or a pullback into the violated space.

Take the time to distinguish between gaps in the direction of the trend and those moving against it. Countertrend gaps represent important shock events when they occur near big highs or lows. For example, a price break in the wrong direction after a strong rally can produce considerable fear and lead to much lower prices.

Gaps through major support and resistance levels signal breakouts and breakdowns. Emotions can build so strongly at these levels that the gap exceeds common sense and sets off a violent reversal. Strong greed or fear can trigger multiple gaps as a growing trend builds momentum. Gaps that print within sideways patterns show less persistence and can fill with little warning or volume.

Gap creation aligns with Elliott Wave Theory. The breakaway gap corresponds with the breakout that occurs during the dynamic first-wave impulse. Runaway emotions trigger the continuation gap at the center of the third-wave rally or selloff. The trend sequence ends with the fifth-wave exhaustion gap.

The continuation gap should mark the halfway point of a trend. Traders familiar with waves can use this projection to target potential reversal levels. Visualize the gap as soon as possible after the fourth wave begins. Then draw an extension from the edge of the first wave into the continuation gap. Then double that distance and wait for price to push into the target level. Enter a position in the opposite direction when price moves out of a reversal pattern in a smaller time dimension.

High-percentage gaps can exhaust further movement in that direction for an extended period of time. The reason is simple: The big move forces all uncommitted players off the sidelines, while winners take profits and losers take losses. This provokes an overextended condition that forces a reversal back toward the prior bar.

Opening gaps fascinate traders but require solid execution skills. Cash seeks opportunity at the start of the day while insiders paint the tape to encourage execution. This encourages a supply-demand imbalance, with ill-advised orders well above or below the market, depending on the gap direction. The resulting friction can set the stage for a reversal just minutes into the new session.

No easy formula shows traders how far a gap can travel and still remain healthy. But we need to apply common sense when observing premarket action above or below the last closing price. The most important question for traders to consider: Does the news and market environment justify the price you're seeing?

The level of crowd participation limits or fuels the strength and durability of the gap event. Certain gaps verify only when strong volume accompanies them. For example, a breakaway gap without heavy volume suggests it will eventually yield to a failed breakout.

The relationship between gaps and the crowd relies on complex interactions. For example, a high-volume gap may end movement in that direction because it uses up the last available supply for that trend. But another gap with less volume leaves just enough on the table to ensure sustained movement in that direction.

Old traders' wisdom tells us that gaps get filled. This classic expression does a good job describing the mechanics of retracement found in most trends. However, some gaps never fill. This suggests using common sense with these specialized patterns. Learn the unique characteristics of each gap type and then apply the strategy that aligns best with its behavior.

Source:www.hardrightedge.com