Forex Arena

Importance Of Accounting And Bookkeeping With Regards To Profitable Organization Prospect

2011-09-15T10:09:00.000-07:00

Two of the essential practices that need to be observed by every organization owner nowadays are accounting and bookkeeping. With the height of technologies, anyone can commence his own business from scratch, supplied he has an thought that will definitely attract lots of clients. Having said that, a visionary can only get so far as his organization solutions.

Undoubtedly, accounting and bookkeeping have to coexist. The practice of economic and small business theories is accounting, as well as the approach of keeping records of financial statements, as the name suggests, is bookkeeping. A organization owner have to know that financial statements can truly be useful in predicting the growth of a company. Using the proper application of accounting and bookkeeping practices, you may gain a stable base of clientele in no time.

Aside from that, accounting and bookkeeping practices are necessary in meeting client's demands. There might be discrepancies that could location the company in a chaos should you failed to allocate overhead of your business. If continuous errors happen, bankruptcy is inevitable.

You may employ the services of freelancers performing accounting and bookkeeping when you are starting out on your business enterprise and choose to save on expenditures. These freelancers will give exactly the same services of common employees, but you're not entirely responsible for them. You do not have to pay for their positive aspects for the reason that you may do transactions on the internet. You don't have to shoulder their task duties in this case.

Often, accounting and bookkeeping freelancers have websites that you can check often. You'll be able to view their profiles in their internet websites and you are able to also check if they are positive and negative reviews about them. Also, it is critical to check the portfolio of your prospect freelancer.

You will see organization aspects differently once you realize the importance of accounting and bookkeeping. You may see that most part of the corporate business are measured by probabilities-not probabilities, numbers, and individuals who have great senses of leadership and method. You'll now turn out to be bolder in producing any organization venture productive when you knew how these components function together.

About the Author:

By Shannon Curtis

Number of applications for unemployment benefits in the United States fell to 466 thousand

2009-11-26T04:03:00.000-08:00

The number of primary applications for unemployment insurance in the U.S. declined for the past week to November 21 to 35 thousand to 466 thousand
economists had expected a rate reduction of up to 495 thousand mark was below the critical level of 500 thousand for the first time over the past 54 weeks.
The number of Americans continuing to receive unemployment benefits dropped for the week to November 14 by 190 tons to 5,423 million.

Orders for durable goods in the U.S. fell by 0,6%

2009-11-26T04:02:00.000-08:00

The volume of orders for durable goods from U.S. producers fell in October at 0.6% against a background of falling demand for engineering products. Recall that in September, orders rose by 2%.
Economists expect improved performance in the reporting period by 0,5%.
Orders for durable goods excluding orders for vehicles fell by 1,3%.

UK GDP fell by 0.3% in the III quarter

2009-11-26T04:01:00.000-08:00

According to revised data from the National Statistical Office, UK GDP fell by 0.3% in the third quarter of this year compared with a preliminary estimate at -0.4%. On an annual basis has declined by 5,1% (revised from -5.2%).
Recall that in the second quarter GDP showed a decline of Britain 0,7% in monthly terms, and on 5,5% annual.
The index of activity in the services sector for three months, including September, amounted to -0,1%, as well as for the previous reporting period. Rate projected at 0.0%.

How to feed the world

2009-11-26T03:57:00.000-08:00

In 1974, Henry Kissinger (Henry Kissinger), then Secretary of State, spoke at the first World Food Conference that no child will go to bed hungry in 10 years. Slightly more than 35 years later, during a UN food summit in Rome, 1 billion people go to bed hungry.

Promise Kissinger failed and will continue to get worse. None of the agricultural problems that led to a surge in food prices and the increased number of hungry in 2007-2008, has not been resolved. In 2050 the world population will grow by one third, but the demand for agricultural products will grow by 70%, the demand for meat will double. This growth is in some sense can be considered good news because it means the growth of welfare in poor countries and middle-income countries. However, this growth would be achieved without development of a large number of new land by farmers (there are some opportunities for expansion, but the small ones) and without the use of large quantities of water (in some parts of the world's water supply is very problematic or worse). Moreover, this growth will occur against the background of the struggle of farmers with the consequences of climate change, which will ultimately do more harm than good for the farmland around the world.

May already be too late to avoid a new round of price increases. Despite the global recession and the biggest grain harvest recorded in 2008, food prices are rising again. However, in countries now have a brief opportunity for the approval of long-term pricing policy, without the distraction of panic measures. Politicians need to do two things: invest in the productive capacity of agriculture and improve the functioning of food markets.

The Government made the first but not the second. Over the past year, investment is growing faster than expected. But distrust of markets and the reaction against farm trade, grow. If the government not keep these impulses, they will reduce the profit from the growth of investment.

A quarter century of inactivity
Over the past 25 years, investment in agriculture declined relentlessly. In 2005, most developing countries have invested about 5% of government revenue in agriculture. The share of Western aid devoted to agriculture fell by about three-quarters between 1980 and 2006. This reduction in investment performance hit. During the green revolution in the 1960's, productivity grew by 3.6% per year. Now, this growth is only 1-2% per year in poor countries, the yield does not increase at all.

Fortunately, the jump in food prices in 2007-2008 forced the government to wake up from the 25-year neglect of this issue. World Bank and many developed countries has doubled investment in farming in poor countries. In themselves poor countries, agriculture ceased to be a minor matter for the government, and if the Minister of Agriculture to do something - it becomes an event that should be concerned about everyone. That's how it should be: agriculture, undoubtedly, is the most important economic activity in poor countries.

Part of the new expenditures of public funds account for insurance of poor farmers, which is also the basis for poverty reduction: three-quarters of the world's poor live in rural areas. However, ultimately, the money will bring dividends, will be established only if the access of farmers to markets. Lack of reliable markets - is a great obstacle to rural development, because without this, farmers have no incentives for efficient growth. Therefore, development of roads in rural areas is welcome, as well as measures to increase the quality of the local markets (for example), dissemination of information on prices and the construction of silos. There is also a sense in the temporary subsidies better seeding and fertilizing the land in countries where local markets can not ensure this, all these measures can serve as an example of correct market failure.

Stimulating food production without the development of new land and water use will also require new technologies that will play an increasingly important role in the next 40 years than it did in the past 40, when people are somehow lived through the results of the Green Revolution. Technologies involves many things: drip irrigation, no-tillage treatment, more efficient use of fertilizers and pest control. One way to increase yields clearly stands out: the development of genetically modified (GM) crops, which, for example, requires less water. GM crops may become more acceptable if they are developed in state institutions, rather than in large private companies, and seedlings will be given, rather than sell.

I'm not alright, Jack
There is, however, the danger inherent in all activities of government: the temptation to self-sufficiency. Rising food prices in 2007-2008 led all countries rightly worried about the "continuity of food supply. However, over the past year "continuity" (meaning that should be enough for subsistence) was shaded by "self-sufficiency. Self-sufficiency has become a common priority for policy in many countries.

Self-sufficiency in itself is not bad. If poor countries have a comparative advantage in producing their own food, these must be used (many will do so). The problem is that the new rhetoric of self-sufficiency coincides with increasing distrust of markets and trade. Importers of grain is no longer trusted by the world markets in ensuring their needs. Illegal invaders "fall upon the land overseas to grow food. Everywhere, governments are more actively take part in agriculture through subsidies on capital investments. In these circumstances, self-sufficiency can be easily vovzvesti security barrier.

It is not beneficial to anyone. As shown by the European experience over the decades, the pursuit of self-sufficiency, especially excessively wasteful. Self-sufficiency and would lead to the freezing of the structure of agricultural production at the very moment when climate change affects various parts of the world in different ways, and trade between them is more important.

The Economist

The problems of the dollar - this is good news for the markets in Europe

2009-11-20T11:00:00.000-08:00

Almost all predicted the dollar fall. He has even fewer friends than a passenger aircraft, which during the flight is suspected sick swine flu.

Investor and owner of billions of dollars in George Soros (George Soros) said that this situation creates a "dangerous instability. IMF Managing Director Dominique Strauss-Kan (Dominique Strauss-Kahn), indicates the appearance of a new global world's dominant currency in the decade.

The reasons are simple: the U.S. economy is in bad shape, the Fed prints money wildly, the budget deficit out of control.

It is hard to believe that in five years the dollar will have the same dominant role he had on global markets after World War II.

The depreciation of the dollar in Europe is often seen as a threat. In fact, all exactly the opposite: the end of the dollar's dominance will increase the importance of the European economy.

Evidence of problems of the dollar, we can see everywhere. The Organization of Petroleum Exporting Countries continues to mutter about the need to abandon the dollar in transactions with the oil and switch to one or more other currencies. This may not happen immediately, but it would be naive to believe that this will not happen in principle.

Central banks are beginning to revise their views on how much of their stocks to keep the dollar, particularly because the Fed does not stop the printing press. For example, India, has just bought gold at $ 6.7 billion from the IMF to diversify their reserves. Expect many such transitions, especially from new emerging economies in the coming years.

The end of
Objective debate about the end of the dollar's dominance has not yet happened. After WWII the U.S. became a strong economy. Now they - one of several powerful economic blocs. There is no reason for the U.S. to occupy a special position.

An interesting question is what the consequences. The gradual decline of the dollar - another source of instability in the world, in which it and so abound. The depreciation of the dollar in Europe and the rest of the world - is an opportunity to strengthen its own economy.

There are three reasons for this.

First, the primacy of the dollar allowed the U.S. to cope with a much larger trade deficit than any other country could afford, not leading to the collapse of its currency. It was a kind of tax that was levied with the rest of the world and allowed the U.S. to consume more and save less than they should, at a time when other countries were forced to save more and consume less.

"Tax" dollar
Because Europe is richer in other countries, this tax is mostly paid by Europeans. Any tax cut stimulates the economy, so the end of the tax dollar will do the same for Europe.

Secondly, the decline of the dollar will inevitably stimulate the global trading volatility, since only the special status of the dollar makes a huge U.S. trade deficit is acceptable. This should reduce the imbalance in trade between the U.S. and China. It will also reduce a massive trade surplus in Germany, as the strong euro complicates the sale of goods abroad. Even with the rapid growth of China, Germany remained the largest exporter of goods in the world in 2008. If China will assume this role in the near future, Germany could begin to consume and import more, which should benefit the whole of Europe.

Finally, we do not know what will replace the dollar. "Gold bugs" (supporters of preserving the functions of monetary gold) insist on their candidate, and maybe they will win. But most likely it will be the basket of currencies. One of them will be the Euro. The euro zone is currently the only strong economy, with the right amount of liquidity to meet the dollar.

Free Loans
For that to be a reserve currency to pay the price. Your Bank should worry about the consequences of its policies in the context of the whole world, not just the domestic economy. Of course, there are advantages. In fact: the rest of the world gives you an interest-free loan. And your currency is stronger than might.

With its aging population, Europe is the greater part of the next 30 years will live on their capital. With so many retirees, the region will be required to spend more than it saves. A stronger euro makes imports cheaper than those things that work force has ceased to produce.

Most of us do not like change, and people have a tendency to hold on to something with which they are familiar much longer than it was viable. But the dollar's dominance as the global reserve currency, is complete. And although Europe has to fear, there are also things which you can enjoy.

Lynn, Bloomberg
November 18

Barclays Capital: break the trend line in the pair AUD / USD will lead to a deeper correction

2009-11-20T04:49:00.000-08:00

As the currency analysts Barclays Capital, commodity currencies are traded today, under pressure, however, the Australian dollar took the brunt. Pair AUD / USD tested support trendline at 0.91, setting a two-week minimum at 0.9060, but then rebounded somewhat. The bank's strategy pay attention to the fact that the trend line from the March lows so far been a reliable support in the pair - a breakthrough that line will lead to greater downward correction AUD / USD. At the moment pair AUD / USD traded at 0.9115.

The fall of the New Zealand dollar and more than 200 points

2009-11-20T04:40:00.000-08:00

The breakdown of 0.7310/00 level of support has increased the bear moods and currently the exchange rate reached 0.7240 before the intended target.

NZD / USD

Now look at other indicators:

Exchange Rates entrenched below the average with periods of 89, 144, 34 and 55, which are now a number of strong resistance levels 0.7330, 0.7380 and 0.7400/20.

The MACD histogram is located in the negative zone below its signal line, continues to decline, and thereby sends a signal to sell the New Zealand dollar.

Stochastic Oscillator is in oversold does not give clear signals.

Therefore, as a confirmation that the market would be exacerbated bearish sentiment, we can only wait for the breakdown support level 0.7240, which could open the way to a local minimum of 0.7100.

Resistance levels: 0.7250, 0.7270/80, 0.7300/10, 0.7340/50, 0.7370/80, 0.7400

Current Price: 0.7239

Support levels: 0.7220/00, 0.7160/50, 0.7110/00, 0.7080, 0.7050

StepMA MT4 Indicator

2009-10-16T04:28:00.000-07:00

Download

StepMA_v7.2.mq4

Lots of noise around the central banks

2009-07-27T07:12:00.000-07:00

Remove me from this chair! Perhaps it is about the dreams of the British Prime Minister Gordon Brown, when he heard another sharp observation of the Bank of England. For the English King Henry II (12 century), a source of problems was Thomas Beckett, Archbishop of Canterbury appointed. To Mr. Brown - is Mervyn King, which he re-appointed to high office. The parallel is obvious: The heads of central banks - Cardinal, bow before the financial stability. Becket was murdered. Mr. King ugotovana different fate. However, later, King led the Church of England archbishops and obey. Will the bank the same fate?

In fact, as a result of the crisis, central bank independence is threatened, and this happens not only in the UK. This is due to several reasons: in terms of near-zero interest rates, the boundary between the monetary and financial policies is erased, the state supports the large financial deficits, especially the United Kingdom and the United States, threatening monetary stability and, lately, the people responsible for the crisis, wants to shift the blame on the other. Indeed, Mr. King - not only the head of the Central Bank, have been subjected to attack. U.S. lawmakers attacked the Fed chairman Ben Bernanke is due to the merger of Merrill Lynch and Bank of America. Surprisingly, German Chancellor Angela Merkel has publicly criticized unconventional policy measures, including actions taken by the ECB. Violent times breed troubled heads of central banks and cause volatility in the central banks themselves. Questions, particularly in the UK - must act as leaders in the conditions to restrict the independence of central banks, unrest among the politicians and such a heavy time? In my opinion, it is necessary to act cautiously.

Mr. King criticized the government on four aspects: first, the opinion of the Ministry of Finance, if the banks are too great to prevent their collapse, then... They are too big ", and second, the Bank of England has a" new powers to financial stability ... [But] it is not clear how the Bank can take on new responsibilities, if all that we can - to read sermons and to organize the funeral "in the third, it is not advised on what financial services will be included in the white paper, and, finally, he told the Committee, Ministry of Finance in the House of Commons: "If the economy is restored on the road, which include projections for GDP, by budget, I think, the time during which the need to reduce deficits should be end up faster than the forecast of [budget]. "

To start the simple question: whether the rights in this case the 2000 chairman? Answer: Yes, yes and yes again. It is necessary not only to bring the powers into line with the responsibilities, but also take into account that the Bank of England, a body whose activities are focused on the economy as a whole, is best suited to carry out the reasonable control of the financial system at the macro level. Besides, if this is true, it seems incredible that with the President of the Bank is not advised in the White Paper. Indeed, only Mr. Brown and his inner circle to deny the obvious: the financial situation with the deficit in 14% of the GDP forecast for 2010. Made by the Organization for Economic Cooperation and Development, is totally unacceptable. Significant cost reductions and increasing taxes relative to GDP is inevitable. So the question is whether the competence of public expression of their views, especially about issues as related to politics. Does he speak the truth or make ambiguous statements? In the current terrible conditions, of course, it is better to speak openly about disagreements than to hide them.

Yes, the politicization of the independent central bank is of particular potential threat. The Bank can do to lose, and so of limited independence. Moreover, the interaction between the authorities of the need to address the emergence of confusion can itself destroy the trust. Nevertheless, a responsible government official must decide whether a particular issue has become so important that his release - the only thing that might make a patriot. Given the financial position of Britain - of course, yes. We are not talking about moderate deficits, but the yawning abyss, which can absorb the financial stability. In addition, Britain is no longer reliable financial rules and procedures, while the prime minister has denied the implications of financial forecasts of their own government. Given such an irresponsible behavior, the chairman should have the right to vote. Perhaps the Prime Minister hates the irrepressible chairman of the central bank. But the country - not the property of politicians. Heads of central banks should always be treated with caution. But that does not mean that they must keep quiet all the time. Today, they simply must speak.

From The Financial Times

Prospects of the American economy

2009-03-21T12:59:00.000-07:00

Caroline Baum, an analyst "Bloomberg News"

As the holidays ahead of us waiting, and trade gradually melts away, now is the time to look forward. For the U.S., there are still two prevailing and diametrically opposed views.
The American economy is in a beautiful form, or is about to reach peak and go down. Household balance sheets are also either in good shape, or so strained that require a serious reduction in consumer demand.

The U.S. Dollar has made a very welcome and should be reduced or are on the verge of collapse, which will send increasing yield Treasury bonds and the global economy into a tailspin.

So, what happens?

For the inexperienced observer, the economy, growing at 4% with unemployment at 5.4% and inflation (core CPI), to 2%, is quite good. And even if our observer knows that the economy experienced a series of shocks, starting with the rupture of one of the biggest in the history of the stock market bubble and the collapse of business - investment and subsequent terrorist attacks, corporate scandals records, two wars, the price of oil for $ 55 and various concerns related to the presidential election, it will be even more impressed.

Return the double deficit

However, not all so simple! How about growing deficits (fiscal and current account) and reduce savings rates? The savings rate fell to 0.2% in October, that far from the historic minimum. The government had a record budget deficit of $ 413 billion in fiscal year 2004, which ended Sept. 30. And current account deficit, which is the broadest measure of trade, including goods, services and investment income, rasshirevshiysya to a record $ 164.7 billion in the third quarter. If you evaluate it as a percentage of gross domestic product, the gap fell to 5.6% in the last quarter, slightly away from the record second quarter to 5.7%.

Anyone who wants to find a precedent for such a fulminating mixture, do not need to delve too far into history. Last time, the double deficit was the reason that the "regulation includes the dramatic fall of the dollar (1985-1987gg.), The collapse of the stock exchange (1987) and, ultimately, the decline of American economy (1990g.)," the economists write "Barclays Capital Group "in its review of the global economy in 2005.

This is not the main scenario - at least not in 2005. Chief U.S. economist Henry Villmor said the forecast for sustained economic growth at around 4% and "balanced" monetary policy contraction.

Many risk

"There are many risks, which could lead to" adverse financial developments in 2005. And problems later, "said Villmor. The "bad", he means "Reduced sale of Treasury bonds, the emergence of problems on the stock market and housing, leading to a decline in general welfare."

Bond, suffering from large deficits, a weaker dollar and the five increases in official rates, refused to fall. The yield on ten-year Treasury bonds is about 50 basis points lower than it was when the Federal Reserve start to raise the target rate on a daily credit of 1% at the end of June. Exchanges of shares are also higher.

"If inflation begins to threaten the tolerance values of the Federal Reserve comfort zone - from 2% to 3% for the base consumer price index, the policy-makers will have to leave the" balanced "approach to the normalization of rates and, in fact, put a cross on economic growth," said Villmor .
This can result in cheaper sale stoic on the bond market. The dollar may fall as well as foreign investors will seek compensation for the erosion of real returns. Domestic investors can ignore the low yield in the face of fiscal policy initiatives that could expand the budget deficit in the short term.

Wealth savings

The growing housing market may finally release the steam, due to higher interest rates, which the (or promoted, depending on how you look at it), reducing the savings rate.
Net household reached a peak in the first quarter of 2000., Fell and did not exceed the previous peak until the fourth quarter of 2003. Since the third quarter of 2004., Households have shown increasing its net worth at 3 trillion. $ To peak bubble and a 7 trillion. Minimum of $ 2002.

"Yes, the savings rate of income reduced," said an economist from the "Citigroup Inc." Bob DiKlemente. "It will run its course. The savings rate will rise, but it will be gradual and over a long period of time, as interest rates and other incentives to change."

Profit as the basis

DiKlemente do not agree with the idea that economic growth has been artificially supported by highly supportive monetary and fiscal policy, and that after the removal of incentives, the growth will slump. Instead, he sees a "stream of mergers and acquisitions and rising short-term business - loans will be the early sign that the business ceases ostorozhnichat.

Recent data from small businesses - the November index of the National Federation of Independent Business - has shown that optimism is consistent with the 30-year peak set in 1983. Small business hiring plans reflect the strengths of staff and record levels of capital investment.

"Leading figures associated with the strategies of growth rose sharply," said DiKlemente. "This is yet another sign that the risks are reduced." The optimistic outlook DiKlemente long supported increasing the rate of return of non-financial corporations.

"No significant decline did not begin with improving profit margins," he said. "Rate of return affects the way in which business perceives the future." It sounds as if the optimists and the pessimists are talking about the same economy. The only thing with which they agree - is that a lot of bad things can happen in the next year.

If these things do not happen, the pessimists only moved its forecast for 2006.

Forex Magazine
based on www.bloomberg.com

California guru

2009-03-21T01:30:00.000-07:00

In late 2001, the magazine «Sun» has published an interview with Joe DiNapoli - one of the most popular American traders [1]. In March 2002, DiNapoli, as well as two other well-known financial guru - Borselino Lewis and Larry Williams, came to Moscow where he participated in the exhibition-conference «Internet Trading. Ekspo2002 »[2]. Many of our readers have been very happy to personally speak with «living legends» financial world, but expressed regret that not all able to talk with them. Journal «Sun» begins a series of regular publications on the world-renowned trader. The first issue to our readers are invited to an interview with John Bollindzherom.

«Currency speculator»:
Hello, Mr. Bollindzher. Our first question: readers interested in Russia, as you become the trader?

John Bollindzher: The question journalists ask me most often. In the late 1970's I worked at the studios and was involved in the film as a cameraman. I was one of the earliest models of PC. At that time, I wondered how it can be used to adjust the picture quality. Gradually, I became increasingly enamored with computers and less and less work in the film. By 1980, I went with the head of the computer analysis.

«AC»: How do you use a balanced strip Bollindzhera? What is meant by «breakwater Market»? In what segments of the financial market, this method is applicable, and in what circumstances the use of balanced lines must be careful?

DB: Balance strip - this is sort of middle line, which, in turn, is detected by the trend. This line is not selected to ensure the best signal intersection, and turn to describe the intermediate trend. However, it should be remembered that this line should be used as a «anchor» - a reference line for all the other bands. Therefore, if the selected line, which gives the best signal intersection, it would be too short to provide a suitable anchor for the band.

Realizing that this line is a narrative in the trend, it is important to know how to better use. Initially, I used the lane and the middle line to describe the movement of stock prices in the U.S. market. I know that many traders use it, not only for market shares in other countries, but no less active - in FOREX and commodity markets. With regard to care, which should be applied to the strip of different segments of the market, then perhaps it would be inapplicable to illiquid markets and markets with low activity.

«AC»: It is well known that the algorithm Bollindzhera strip is such that 95% of the price fluctuations within the band. Is this as an opportunity to trade against the market? And what happens if the price would be outside the band?

DB: The answer is - no, and here is why: we use the strip to determine the price is relatively high or relatively low? If the price is at the upper edge of the band, one can say that it is relatively high, and if at the bottom of the band - that is, by definition, we say that the price is low. Thus, the behavior of prices compared with other indicators, and it can also affect the trend-dependent solutions. There may be situations where the price is at the upper edge of the band in a strong enough market and its movement is very strong, and therefore there is no reason to sell. In a similar situation where the price is within the upper edge of the band, but the market is weak internally, you have to keep its price within the limits of the band, it should be sold. In other words, your actions will depend on the dynamic behavior of prices within the band and must be confirmed by other indicators. I prefer the indicators of volume. It seems to me that they are very well suited for this purpose. However, I have seen, as in this situation, well a variety of indicators.

«AC»: Can I use line strips Bollindzhera as effective levels of resistance and support?

DB: Of course, this can be done. For example, the upper edge of the band will be resisted when the weak market and the lower edge of the band will be the level of support for the strong market conditions. But you must understand that the price can remain above the upper border of the band a long time, if the market strong, or a long time to be below the lower limit of the band, if the market weak. In such a situation in a sustainable ascending or descending trend wise, respectively, to sell or buy. You must show itself, when it is obvious that the situation in the weak upper band, and in doing so you are ready to act. I would like to make a small gift from America Russia. Through research for my new book, I found a curious thing that you will be very interesting. By monitoring market dynamics, I found that if the two on the twentieth and the fiftieth day match, then in such circumstances, the trend is very strong. With a strong trend you will see that the form of strips prior to the twentieth and the fiftieth day varies almost identically. This is - a reliable way to monitor the trend.

«AC»: Thank you for the gift. It is certainly of interest of our traders. Tell me please, but you can use strips Bollindzhera to check the false puncture resistance and support levels?

DB: Sure. We can recommend a way, very similar to that discussed earlier. Falsity of the puncture can be defined on the real macro-economic processes. For example, a popular method in the U.S. is to compare the average in some industries with the dynamics of indices of industrial development. If we compare the price point was higher than the upper bound of the band, with a corresponding time-economic indicator, and it is on the decline (ie, we can see that these two points are on divergent lines), it's likely there will be false samples. But if the price point above the upper band and a point on the lines of industrial development are in the ascending trend, most likely, be expected to significantly enhance the market.

«AC»: Are there any features you would with your indicator on the market FOREX?

DB: Of course, the results of my work is widely applicable in the market FOREX, but there are some differences from trading shares. For example, when the movement starts, it goes further and lasts longer than one would expect for the stock market. When working on the trends that I have given special preference should be to pay attention to the breakthrough, when the band goes down very low, and the price goes beyond its limits. We call it squeezing the prices (squeeze). It is, in particular by FOREX, often leads to big changes. In fact, not so important, what options do you use: time period, deviation factor, etc. Much more important for the trader when the narrow band starts to grow and become very broad, or the reverse process occurs. When the expansion is just beginning, this heralds a start of big changes in the market. And when the band is widened, and the process of winding down in the opposite direction, it means the end of the change.

«AC»: The next question concerns the Elliott wave theory. To what extent it describes the processes in the financial markets? Do you have this theory, and in what context?

DB: I think that Elliott wave theory in fact reflects the basic trends of processes and mechanisms in financial markets. The problem is that most of the practitioners saw it «globalism». They believe that this theory has always and everywhere true. However, I do not think that it is the key to all problems. Nevertheless, the wave theory can be very useful for operations on financial markets. I'm not sure how many others, that the theory of Elliott always works without failure. I do not even think that it is applicable in most cases. But when it works, it works quite well. In this sense, the theory resembles vzvinchivanie price: it occurs when the benefit is a series of circumstances for this growth. But it is not too often. I think that people are not too get to the heart of this theory. They are trying to apply it in all cases. However, it is acceptable only in certain situations - for example, in the early stages of development processes in the markets. So this theory, the most winning position.

«AC»: Please tell us about your future plans. Are you going to publish new books?

DB: Yes, I plan to publish two new books. One of them will be the second part to the already published a monograph «Bollindzher and strip Bollindzhera» - I have accumulated a lot of new material that I would like to add. So I'm going to combine the new material and a guide to its study. I want to describe the general rules for the functioning of financial markets. And plan to come to Moscow - I'm waiting eagerly. This will be my first visit to Russia.

«AC»: What do you expect from this trip?

DB: I just want to know a little more about modern Russia, that is happening here. When I send to travel, I always try to learn something new. I really want to see how people benefit my book. I also hope that I have interesting new ideas in the area in which I work. I would like to learn about other ways in which I might not be familiar, but which have been successfully applied to your market. Do not often see an other working conditions of the markets, or totally different perspective on the analysis.

«AC»: Tell us about your hobbies.

DB: I love surfing and music. I have a substantial collection of music, although I do not play musical instruments. I like to cook.

«AC»: What do you want to wish the readers of our journal, and all Russian traders?

DB: I would like to say this. The concept of market is different from that under which it is traditionally understood. It covers all major territories. The entire world - it is a huge financial market, and I think that traders have a great prospect for the next few years in this world. I am not saying that they would be easy, however, on all grounds, working conditions in the next few years should be good.

Mephistopheles from Cleveland

2009-03-21T01:22:00.000-07:00

For the descendants of John Rockefeller was the real embodiment of the American dream. She started her career as a simple accountant, by the forty years he became the richest man in the world. Philanthropist, and a ruthless businessman, Rockefeller gathered in all the vices and virtues, which have existed in the wild America in the late XIX century. Now published in Research "is preparing to release a book of American author Howard Minza" Money and power. The history of business "dedicated to the history of the life of an entrepreneur. The material for the article kindly provided by IR "Analysis."

Reduce and conquer
From the age of sixteen, John Rockefeller was forced to earn his own living. However, salaried employees, he worked for three years - in the office of a Cleveland accountant trading firm. In 1858 John, together with a friend, opened a small grocery desk "and Clark Rockefeller." Cases partners were quite good, and the twenty-four years Rockefeller saved over 4000 dollars. For all the money he bought shares of refinery, built just outside of Cleveland. The first oil field in the world, opened in America seven years earlier, caused the country's present oil rush. This was akin to a frantic race for gold, which then tells not one generation of American writers. Do not resist, and the young John Rockefeller, kinuvshiysya to head the new business.

In 1870, he founded the Cleveland company, Standard Oil. However, according to the businessman, a registration clerk in the House, his firm became the twenty-sixth on account of oil company incorporated in the state. Cut-throat competition does not leave any chance to the entrepreneur.

While oil prices have changed with incredible speed. For example, a barrel of oil, stoivshy the morning of 13 dollars, in the evening to fall to 10 cents.

Penetrating into the subtleties of business, young entrepreneur realized that victory in the competition can only be achieved while reducing the cost of transporting oil from wells to a processing plant. At that time, all oil is produced in only one field and processed almost at the same plants with the same technology. Therefore, price advantage can only give lower transport costs. "Decide a transport puzzle in its favor - and you can conquer all of America!" For the Rockefeller Foundation has had such an opening force of the Holy Scriptures. He concluded a secret agreement with three state railways. "Standard Oil" had pledged to use only those three firms. In turn, the Rockefeller Foundation, the railroad promised to substantially reduce tariffs for the transportation of oil. Business has gone up the hill. While revenues grew entrepreneur enormous pace, its competitors began to gradually broke.

Scandalous fame
Although the contract was a secret, about him all the same soon pronyuhali leisurely journalists. Against diabolical John Rockefeller rebelled all American oil. Crowds of angry people with burning torches scrambled to destroy cars with the words "Standard Oil. Rockefeller, whose name has previously heard only the business people of his native city, trice became known throughout the country. Press called him except as Mephistopheles from Cleveland, and the riots of 1872 known as "Cleveland massacre." After just two months since the conclusion of a secret pact the court found the agreement illegal. But this time, John Rockefeller quite enough to buy a song for 22 of the 26 state oil companies. All of the first in a short period, he acquired 53 refineries, of which 32 were immediately closed, retaining only the most profitable.

During the massacre, "the businessman controlled 10% of U.S. refining industry. Ten years later, the share of Standard Oil "had already processed 90% of all the world's oil. It was then that John Rockefeller became a truly rich - the richest man of America.

Two dollars per second
A Rockefeller was the idea to close all the oil business itself: beginning with the oil and sell petroleum products to the consumer. He invented the first vertically integrated company.

Traditionally, oil is sold on the market by independent brokers that have earned five cents per gallon of kerosene. Rockefeller thought it unforgivable. He wanted to earn that money! "We had to create methods for sales, far surpassing that then existed," - he would say later. To get started, Rockefeller destroyed the independent oil dealers. In their place came supply units "Standard Oil.

By the end of the century company, Standard Oil controlled nearly all the refineries in countries that produce a third of the crude oil in America, owned the second largest steel manufacturer, and managed a fleet of thousands of rail cars, barges and ships. Its property is a lot of coal and iron mines. By the mid 90-ies of the Rockefeller Foundation, the company evolved into a fully vertically integrated oil company. Oil escape from the well "Standard Oil, traveled through the pipeline" Standard Oil, clear on refinery Standard Oil, shipped in the tank "Standard Oil" and even sold to the end consumer sales agent "Standard Oil. Control the entire production chain, Rockefeller is no longer dependent on any vendor, nor of the incompetent distributors of any other vagaries of the market. He reached the order.

Since then, the money in the pockets of millionaire polilis river. At a time when most Americans were at two dollars a day, Rockefeller earned nearly $ 2 per second - more than 50 million per year.

It managed to create a Rockefeller with the best management structure. Instead of trying to personally manage their business through fear, as did most big businesses, it has delegated some authority to managers. In the "Standard Oil" was even created specialized committees: the production and procurement. Now we are not aware of other governance structures, but a hundred years ago it was truly a brilliant invention. "By creating incomprehensible complexity of the empire, he was sufficiently clever to be able to dissolve their identity in the organization," - says Rockefeller biographer Ron Chernou. Specialist in business history, Alfred D., Jr. Chendler. Rockefeller called the invention of the creation of a new subspecies of economic rights - to the salaried manager. " According to the Brookings Institution, in the period from 1880 to 1920 the number of professional managers in the United States has more than six-fold - from 161 thousand to a million or more.

Charitable bribe
The famous rich man loved to observe, that to him and to his business law applied only to ex post facto. Secret railroad transaction that led to the massacre of Cleveland, in fact, become illegal only in 1887 when the Commission was established on interstate commerce. Combinations of restriction of trade, is a vital foundation of the vertically integrated companies have been recognized as illegal only after the adoption of the Sherman Antitrust Act in 1890.

In gathering material for a biography, Ron Chernou found in the correspondence Rockefeller numerous confirmed instances where the business simply to pay bribes to politicians to influence the outcome of legislative activity. 250 thousand dollars spent by the Rockefeller campaign McKinley in 1896, were only the most dramatic episode of the activities that Rockefeller saw as a necessary business expense. " Neither the Commission nor the antitrust act did not affect the ambitions of the entrepreneur. On the contrary, since this is the first he had to redouble their efforts to treatment of legal obstacles erected in front of Standard Oil. Rockefeller is constantly "buying" politicians, is simply not knowing how else can you have with them. He saw himself in the service of higher interests. For him, cleaning business was a matter of inefficiency, pleasing not only the economy but also the country, and God. But businessman underestimated the extent of public outrage.

May 15, 1911 the U.S. Supreme Court finished hearing Rockefeller, consisting of 23 volumes of testimony, totaling 12 thousand pages. At last, the eleventh-account process was caused by 444 witnesses, in the presence of which the Court ruled that Standard Oil was a monopoly and is subject to fragmentation.

The news caught Rockefeller playing golf. After carefully listening to the message, a great entrepreneur turned to its partners in the game and said: "I recommend that you immediately buy shares of Standard Oil." Perhaps it was the wise counsel, who ever gave Rockefeller, preferring to enjoy alone the fruits of their mind. As a result, Standard Oil was broken into 34 separate companies. But John Rockefeller has managed to retain control over each of them.

Subsequently, many of these firms grew in the industrial giants such as ExxonMobil, BP Amoco, Conoco, Inc., ARCO, BP America and Cheesebrough Ponds.

At the time of sentencing condition Rockefeller was estimated at approximately $ 300 million. Two years later, as a result of the execution of the penalty, that figure has tripled, to 900 million (equivalent to the current 13 billion U.S. dollars). For comparison: the entire federal budget in 1913 was only 715 million, while public debt was 1.2 billion dollars. The wealth of the Rockefeller Foundation has reached approximately 2.5% of gross national product, while the current state of Croesus Bill Gates is only one fifth of this figure. Lose antitrust process resulted in the greatest career success Rockefeller. In addition, it is time for a new market, the largest consumer of oil - the car.

Germ of laziness
Rockefeller once said that if it were not for charity, it would be three times richer. Indeed, the businessman handed out money to those in need with the same ease as they worked.

Contemporaries said that apparently John Rockefeller looked real curmudgeon. But it was impressive, he handed out to children dime-desyatitsentovye coins - has become a true legend. During his life, Rockefeller, and based his funds donated to charity more than 530 million dollars. One only has received from the University of Chicago, a famous entrepreneur of 35 million dollars.

Through its "Sanitary Commission," Rockefeller helped to destroy the South ankilistomidoz - the so-called "germ of laziness." One way to combat the disease has become a mere distribution of tens of thousands of pairs of shoes. The world's first organization devoted entirely to human health has been the Rockefeller Institute for Medical Research (now Rockefeller University).

Snake oil
In life, Rockefeller was a man of relentless controversy, almost all of whom were brought to absolute extremes. The philosopher William James once said that John Rockefeller - this is a very bad and very good man, whom he had ever seen. "This is a man deep in 10 tiers and completely incomprehensible to me - he wrote. - On the top surface of a seemingly perfect and integrity and all the accused that he was the biggest villain in the business ever created by our country."

From his mother Eliza Rockefeller inherited the best of human qualities: istovoe piety, moral austerity, frugality, hard work, self-discipline and social consciousness. But when civil war broke out, John for 300 dollars to buy from service in the army, because it was a true abolitionist. Moreover, he married a girl from a family whose members were conductors on the "underground railroad" and at one time hid in the house of the famous American abolitsionistku Sodzhorner coward.

Rockefeller's wife, Laura Spelman Ketty, with whom he lived for more than half a century, as Eliza, was the standard of piety. Over time, the family oil tycoon has four estates with beautiful trails for horseback riding and golf course for nine holes. But inside the house did not have any luxuries.

Even at home they had not lost in vain. John Rockefeller, Jr., their only son, once uttered, that until the age of eight was only women's clothing - obnoski sisters. Ketty and I were their own social aspirations. She founded the first school for freed black women's education - Spelman College in Atlanta.

But from his father, Rockefeller Senior inherited directly opposite tendencies, for example, the ability of low cunning and designing. William "Devil Bill" Rockefeller was the so-called "snake oil merchant" and dvoezhentsem. He traveled throughout the country, selling worthless medical medicine, and gave himself for it "botanical physician, for the" well-known expert in cancer ", in the impoverished deaf and dumb. Finally in 1855, Bill devil ever left the family, marrying at young girl who knew him as Dr. William Livingston. According to Ron Chernou, stepmother great entrepreneur Margaret Livingstone Elien only in recent years to learn that her husband was the father of the richest man in the world.

Sam, John Rockefeller of affairs more than once resorted to various tricks, and even threats. One day he told his wife that people succeed in life, must sometimes go against the current. "You can not fear that you bran hand - he said one of its competitors - but your body will suffer." When the threat fails, he falsified the transaction. When this did not help, he simply bought the people, their voices and support of the newspapers. One senator from Ohio, Rockefeller handed over 44 thousand dollars that he discredited the Attorney General of causing discomfort to the activities of Standard Oil.

Rockefeller was a man of tireless repetition. Every morning he was at the same time, play golf, chewed each piece ten times before you swallow, and rinse your mouth ten times each gulp of liquid. He possessed a great deal of willpower, and he seldom failed to get what is wanted. One of the goals of the Rockefeller Foundation was celebrating its 100 th birthday, and he nearly achieved it, died in 1937 at the age of 98 years.

Grand Dynasty
Son dvoezhentsa and devout Christian, Rockefeller gave birth to one of the most prominent and generous American families. John Rockefeller, Jr.. devoted his life to philanthropic and civil cases, giving to charity an additional 400 million dollars. To send a gift to the federal government, he bought land that later became the American National Parks Grand Teton and Acad. The grandchildren of the famous entrepreneur, too, played a big role in the history of their country. Nelson Rockefeller became governor of New York, has run for president from the Republican Party, then - the Vice-President of the United States. His brother Uintrop was governor of Arkansas and chairman of the board of Colonial Williamsburg, the basis of which the important role played by John Rockefeller, Jr.. Lawrence Rockefeller, a recognized defender of natural resources, the State donated the land for the creation of Virgin Islands National Park. John III was led by the Rockefeller Foundation, brought together one of the world's largest collections of Oriental art, and funded Linkolnovsky Center of Fine Arts, New York. And David Rockefeller was chairman of the bank Chase Manhattan, the head of the Council on Foreign Relations, as well as mainly due to the Museum of Modern Art - another project the Rockefeller family.

Now great-great-grandson of oil tycoon John D. IV - member of the Democratic Party and a third term as senator from West Virginia. A beautiful name for the future.

By Julia Tikhonova

Nobel psihoekonomika

2009-03-21T01:12:00.000-07:00

In 2002, the Nobel committee awarded the first prize for economics adherents of two opposing points of view. Vernon Smith experimentally proved that in a situation of massive purchases and sales team of people behave rationally limit. Daniel Kahneman et al confirmed the opposite point: the person is of conduct other than that attributed to it by the economic textbooks.

Experimental economics
The classical economic theory, taking its roots from Adam Smith, assumes that all people are selfish and their behavior is determined exclusively by personal gain. At the time, A. Smith, market players, whose behavior is defined by the cold rational logic, «homo economicus». The best minds of mankind good hundred years, under the influence of classical economic school and its concept of homo economicus.

Refute, like just check the rationality of economic agents could not be identified. And today's economy in many areas is a bezeksperimentalnuyu science, where researchers can not test the theoretical assumptions in the experiments. According to an authoritative professor at Harvard University Gregori Mankiw, whose textbook on macroeconomics translated into Russian, the absence of controlled experiment is the fundamental problem of all economic science. In a sense, the impossibility of conducting a controlled experiment brings together the economies of such sciences as astronomy and meteorology. Specialists have to rely on the so-called field data, the results of direct observation of the real world without the active intervention by the researcher. This depressing situation lasted quite a long time, while economists were not involved laboratory experiments. Under the influence of laboratory experimental economics has undergone a significant process in the last two decades of XX century. Controlled laboratory experiments have become an integral component of any full-scale economic research. Thanks to them, many of the theoretical postulates of the classical school have been refined or refuted. The process of change mainly affected two major areas: cognitive (cognitive) psychology, studying human thinking and decision making, and experimental economics, whose task is to verify theoretical models in research laboratories. The recognized leaders in both directions are Vernon Smith and Daniel Kahneman, by October 9, 2002 was awarded the Nobel Prize in economics.

Dossier

Vernon Smith (Vernon L. Smith)
Prizes awarded for the «use of laboratory experiments as a tool in empirical economic analysis, especially for the study of alternative market mechanisms».
Date of birth: 1927
Citizenship: USA
Current work: Interdisciplinary Center for Economic Science George Mason University (Interdisciplinary Center for Economic Science of George Mason University, USA)
Education:
• California Institute of Technology (1949),
• State University of Kansas (1951),
• Harvard University (1955).

Recent publications:
• Papers in Experimental Economics, December 1991;
• Bargaining and Market Behavior: Essays in Experimental Economics, June 2000;
• The Handbook of Experimental Economics by John H. Kagel (Editor), Alvin E. Roth (Editor);
• Paving Wall Street: Experimental Economics and the Quest for the Perfect Market by Ross M. Miller, Vernon L. Smith (Foreword), January 2002;
• Essays on Genetic Evolution and Economics by Terence C. Burnham, Edward O. Wilson (Editor), Adam M. Brandenburger (Editor), Vernon L. Smith.
Personal pages on the Internet:
1. http://www.gmu.edu/departments/economics/facultybios/smith.html
2. http://www.er.uqam.ca/nobel/d133140/first.htm
E-mail: vsmith2@gmu.edu

Seller and buyer in the «limit»
Early experiments carried out by economic science enthusiasts, are fully devoted to the audit of the basic theory. The first test was subjected to pricing in the classical models. Classical School of Economics argued that under conditions of perfect competition, market prices balance supply and demand at a level that the price offered «limit» buyer (marginal buyer), compared with the price «limit» seller (marginal seller). The first checks for the neoclassical theory of perfect competition has taken a well-known American economist Edward Chemberlin [1]. It was the beginning of the 1950's laboratory experiments have taken a great interest many future Nobel Prize winners for economics, for example, Reinhard Zelten, and John Nash. At the forefront of the experimenters was Vernon Smith. Encouraged by the ideas Chemberlina, Smith's teacher at Harvard, he organized a number of laboratory experiments with students. Smith set out to determine whether the hypothesis of perfect competition in practice. They used stochastic model, where buyers and sellers act with different ranges acceptable price for the goods. Ranges cover the spectrum from least to most acceptable commodity prices. Given the price distribution, Smith was able to determine the theoretical equilibrium price of the goods, ie price acceptable to the majority of buyers and sellers. The obtained results of laboratory experiments, they were first published in 1962 in the «Journal of Political Economy» [2]. To his considerable surprise, the prices obtained during the simulation, consistent with the prices, the theory predicted, although the actual experiment, participants did not have full information as required by neoclassical theory. In order to find out whether this is mere coincidence, Smith and several other researchers have repeatedly recheck the results of laboratory experiments. In 1978, during a better experiment, Vernon Smith, in collaboration with Charles Plottom obtained similar results, but his work, he summarized the caveat that market institutions «relevant» for pricing [3].

Types of auctions
Much time Vernon Smith gave the theory of auctions, which emerged at the intersection of microeconomics and game theory in the early 1960-ies. Virtually all of the theory of auctions has been established by William Vikram, a Nobel laureate in economics of 1996, but his work lay solely in the theoretical field. Really nobody knew what the results provide any types of auctions.

Meanwhile auction mechanisms play a key role in the markets of raw materials and financial instruments, where the specifics of trading systems directly affects the outcome of the tenders. In the 1990's. challenge the adequacy of the auctions came to the fore - in developing countries in connection with the transfer of state property into private hands, while in developed countries with regard to deregulation and privatization of television and radio. In the theory of auctions is allocated only four basic types of auction for the sale of one product or service.

1. Normal, or English auction (English auction): in an open disclosure of the price bid ends when none of the buyers do not want to increase the price of the goods. English auction can be seen in the sales of antique collections of trading houses such as Sotheby's.
2. Dutch auction (Dutch uction): if there is transparency in prices start from the maximum bid price bids, and ended with the issue of a minimum acceptable price. Dutch auction Orgbankom actively used until 1998, Bank deposits exhibited at an auction, where potential investors are gradually reduce interest rates until it was the only investor with the lowest rate offered.
3. Closed the first price auction (the first-price auction, with sealed bids): No public auction, each buyer only once anonymously offers a price, eventually wins the party with a maximum application. According to the scheme to sell the domestic industry in the collateral auctions in 1996-97 years.
4. Closed the second price auction (the sealed-bid second-price auction): an application filed under seal actors, and the one who proposed the highest bidder, must pay an amount equal to the second highest offer. Currently, such a specific type of auction is not widely used.

A Dutch-something cheaper
Enter a controlled experiment, Smith with his colleagues in the scientific arena began to find out the same whether the actual results of auctions with the theoretical predictions of the outcome of the tenders. He found that, like the theories, identical results show English auction and second price auction is closed. At the same time, Smith denied the suggestion that the outcome of bidding for the Dutch auction and the auction closes first price match. Ranzhiruya auctions in terms of maximizing the final price tender, Smith found that most prices are fixed in the English auction and second price auction closed. Second place is the first closed auction prices, and the last - Dutch auction.

Dossier

Daniel Kahneman (Daniel Kahneman)
Prizes awarded for the «work of combining psychological studies and economic science, especially for the study of human thinking and decision-making under uncertainty».
Date of birth: 1934
Nationality: dual, the U.S. and Israel
Current work: Faculty of Psychology, Princeton University (Princeton University, USA)
Education:
• Hebrew University of Jerusalem (1954),
• University of California at Berkeley (1961).

Recent publications:
• Choices, Values, and Frames by Daniel Kahneman (Editor), Amos Tversky (Editor);
• Heuristics and Biases: The Psychology of Intuitive Judgment by Thomas Gilovich (Editor), et al, July 2002;
• Well-Being: The Foundations of Hedonic Psychology by Daniel Kahneman (Editor) et al, July 1998;
• The Handbook of Experimental Economics by John H. Kagel (Editor), Alvin E. Roth (Editor);
• Judgment under Uncertainty: Heuristics and Biases by Daniel Kahneman (Editor) et al, April 1982.
Personal Page on the Internet:
http://www.princeton.edu/ ~ psych / PsychSite / fac_kahneman.html
E-mail: psych@princeton.edu

Smith Plottom conjunction with one of the first began to use «Progonnyj tunnel», or method of wind tunnel (wind tunnel), in laboratory experiments. Using the verified mechanisms lifting of state regulation, privatization and tendering for the procurement of goods for the state. At present, these mechanisms are so complex that modern theory is unable to give an accurate predictive assessment of the results. For this reason, the only possible solution to the problem of becoming a pilot method. Smith used the «Progonnyj tunnel» for constructing an optimal schedule of take-offs and landings at airports. Moreover, its recommendations on the results of the experiments were taken into account in the deregulation of electricity markets in Australia and New Zealand. It is regrettable that privatizatory of the Russian Federation State Committee on the eve of large-scale sales of state property has not been familiar with the writings of Vernon Smith.

Happiness is not about money, but their numbers
Modern economic theory at the center puts material wealth. The well-being, life satisfaction or happiness in the minds of economists are inextricably linked to material prosperity. The well-being or utility (utility), the individual is determined to consume goods and their quantity. To maximize the utility of an individual chooses a particular course of action in certain circumstances, which may be uncertain (uncertain).

Generally, the preferred course of action the individual is fully within the rational-logical patterns of human behavior. All these assumptions are the basis of expected utility theory of von Neumann-Morgenshteyna (Neumann-Morgenstern expectedutility theory) [4]. According to the individual making the greatest values of utility function, seeking to adequately assess the probability (expectation) of events with which it will face. As a psychology dominated by a view of human behavior. In the cognitive psychology of human beings as a system that deliberately encodes and interprets information available. At the same time, the decision-making process directly influenced by subconscious factors. Among the factors that determine the interactive process of human thinking, the number of perception, mental models of the interpretation of life situations, emotions, the nature of relationships between actors and the memories of the earlier decisions and their consequences.

Based on the extensive theoretical work and experiments on human behavior, Daniel Kahneman and several other psychologists have criticized the assumption of individual rationality that exists in economic science. According to critics, in fact, the individual ignores the evaluation of uncertainty according to the theory of probability. Moreover, it is far from maximizing the utility, which insists on the theory of von Neumann-Morgenshteyna.

A number of studies, Daniel Kahneman, in cooperation with other Israeli psychologists, Amos Tver, has shown that people are not able to fully analyze complex situations in which future events are hidden by fog of uncertainty. In the face of uncertainty, the individual relies on a short heuristic analysis (heuristics), or on a rule of thumb (rule-of-thumb).

The process of human thinking for example, studied a group of people who had to assess the probability of random events. Most participants in the experiment gives the same probability estimates both small and large events, without taking into account that with the increasing significance of the events likely to be reduced. In other words, people follow the law of small numbers (law of small numbers), completely ignoring the law of large numbers (law of large numbers), on which the theory of probability.

According to the law of large numbers of individual events are vulnerable to random and non-factor than the mass of phenomena in general. When a large number of observation random fluctuations are mutually canceled, and it becomes visible to the general pattern of phenomena.

However, in two experiments, psychologists have demonstrated, individuals sometimes paradoxical behavior. They believed that the probability of birth of a boy in a large urban and rural hospitals are equal and amount to 0.6.

Similarly, investors believe that the investment fund manager more competent than the market as a whole, if the fund shows its best financial results in comparison with the stock index over the past two years. Although the validity of statistical sampling (number of observations) is too small to make such conclusion.

Subjective perception of individuals of events in the real world allows you to explain the various irrational phenomena in financial markets. In particular, the assessment of market shares from the perspective of the law of small numbers of permits to explain the appearance of "bubbles". The use of psychological analysis of the financial markets eventually led to a theory of behavioral finance (behavioral finance) [5]. The most typical case of inadequate investor behavior can be illustrated by the following example. If the action is, the investor bought, rose in price from $ 20 to $ 50, then, fixing the profit he will sell it without thinking. However, if the price of first foam from $ 20 to $ 80, then dropped to $ 50, the investor with great displeasure give an order to sell.

Unexpected perspectives
Not satisfied with the standard theory of von Neumann-Morgenshteyna, Kahneman and Tver offered his own theory in his article "The theory of perspective: an analysis of decisions under conditions of risk" in one of the rooms authoritative magazine "Econometrics" [6]. According to the theory perspectives (prospect theory), individuals make decisions in two stages. First, they limit the problem to be solved by some framework to study it in isolation.

In other words, the issue is edited by comparison with its original, resulting in a complex problem is transformed into a simple perspective. Then, individuals maximize the value of the function of perspective (prospect value function). It is composed of different perspectives are assigned probabilistic weights, reflecting the psychological norms and expectations of the individual. In general, there are four key differences from the traditional theory of the prospects for utility theory.

"For the individual is important, not so much the absolute value of his wealth (or value of any other economic variable), but its relative change.
"The changes are evaluated in terms of losses and gains with respect to some reference point (reference point), and as a rule, the loss of re, and the acquisition of undervalued. As a result of this rejection of losses (loss aversion) is not so much an individual actually maximizes utility, but minimizes antipoleznost ( disutility).
"Deviations from the reference point perceived by the individual with lower sensitivity (diminishing sensitivity). A smaller variance is seen much more painful than a larger deviation.
"Probability weights assigned to different perspectives or upcoming deviations, are assigned to non-linear law. Most of the probabilities underestimated, but very low probabilities, on the contrary, overestimated.

In 1992, Tver and A. D. Kahneman expanded the original theory of perspective, bringing to light an aggregate theory perspectives (cumulative prospect theory) [7]. An updated version of the theory takes into account a number of shortcomings of early authors. First of all, it is designed to analyze a large number of prospects being faced by the individual, resulting in the offspring of two close to the standard theory of probability. Testing the theory perspectives in practice shows that individuals make mistakes in dealing with the problem of optimal allocation of resources, such as the formation of the equity portfolio. Rather than risk diversification, they "put all your eggs in one basket", ie concentrated risks.

The theory has been able to explain various behavioral anomalies: why do investors ignore the recommendations of the Portfolio Theory Markovitsa; why shoppers doing the long road to take advantage of small-scale discount stores, why the staff member in no hurry to reduce excessive consumption, etc. For answers to these and many other "why "Kahneman and was awarded the Nobel Prize.

Awarded the prize Vernon Smith and Daniel Kanemanu, adherents of the two opposing points of view, the Nobel Committee allowed the long-running dispute among scientists, as early as 1991, Smith blamed Kahneman and his colleagues in the one-sided and ignoring other concepts. Now, the collective behavior of individuals susceptible to the irrational rational explanation.

Sergey Moiseev

References:
1. Chamberlin E. H. An experimental imperfect market / / Journal of Political Economy, 1948, ? 56, pp. 95-108.
2. Smith V. L. An experimental study of competitive market behavior / / Journal of Political Economy, 1962, ? 70, pp. 111-137.
3. Plott C. and Smith V. L. An experimental examination of two exchange institutions / / Review of Economic Studies, 1978, ? 45, pp. 133-153.
4. von Neumann J. and Morgenstern O. Theory of Games and Economic Behavior. - Princeton: Princeton University Press, 1944.
5. Shleifer A. Inefficient Markets - An Introduction to Behavioral Finance. Clarendon Lectures in Economics. - Oxford: Oxford University Press, 2000.
6. Kahneman D. and Tversky A. Prospect theory: An analysis of decision under risk / / Econometrica, 1979, ? 47, pp. 263-291.
7. Tversky A. and Kahneman D. Advances in prospect theory: Cumulative representation under uncertainty / / Journal of Risk and Uncertainty, 1992, ? 5, pp. 297-323.

Success in the market life

2009-03-21T01:08:00.000-07:00

Russian roulette and vorotily business, classical history, and financial speculation, poetry and mathematics, science and Sherlock Holmes battles - everything is on the study of friendship and enmity with Mrs. success. If your neighbor is making success on the stock exchange - he was a genius or vezunchik? «Sun» publishes interviews the author of the book «nicely left happenstance. The hidden role of chance in the markets and in life »Nassima Taleb, which he gave to the English News Agency Air Force.

When we make a mistake luck for skill, we are becoming the «accidental nicely left» - cautions mathematician and insurance risk manager Nassim Taleb. We need a book that reveals the roots are already accustomed to underestimate the accident. And in general, it is mathematically slim, attractive and informative book on common sense. It provides a wide range of readers. Students and financial officers, taxi drivers and lawyers, dentists, and philosophers - all can read this book, and through it to gain a new perspective on life.

- Mr. Nassim, you have such a rich knowledge of world markets, the resulting work in different places. It seemed to me that, according to set out in your vision, ultimately, each only benefit from good luck. Is it true that experience is not so critical?

- I have not gone so far as to say that everything is defined by success. Above all, we underestimate its role. We tend to attribute our errors at the expense of underestimating the good luck and give a much more important skill.

- Is it possible to quantify the extent to which performance is based on luck, but as far as ability, experience?

- Count it's quite hard, but I tried, and a huge number of people tried, and most of my friends also tried to evaluate it. I believe that such a calculation, and introspection, which he leads - just an attempt to determine how much depends on the case. Self-help to assess the share of luck, and this is very simple. There is the way of evaluation, and I want to outline that will help you to feel that he intuitiven. Suppose I have a million monkeys typing printers. Printing is. At the end of the experiment, which may last a long time, especially if you are not too skilled typist, you probably can find one that would have printed the Iliad. But if you have 10 billion monkeys, it is very likely that some of them will print the Iliad. However, if you have one monkey, the opportunity to print the Iliad would be very small. So if a monkey print Iliad, as you see in the original population, it can fairly accurately calculate her chances to have accidentally created this great text. The same applies to the reception of traders. If I will be 10 thousand traders as a reference group, after 5 years, surely one of them will reach a record of success. Would I not pay attention to the description of such a trader and not attributed it to high art. But if I had 5 of traders in the market, and after 5 years, one of them came to the same record the results, I would say: yes, it is likely that the role of luck in the actions of this gentleman is very small.

- People are more concerned about the fact that the games in the stock market usually cost them money. Entire areas can flourish and die, depending on events in world markets, and if a strong element of luck involved, it is likely that we would be less peaceful than it is now.

- There is a worry as well as a case not only in trading. Adventitious presence in making economic decisions and actions of similar type. For example, you read government statistics, most of which are based on any real facts. But often you are faced with playing a role of randomness, and the importance of statistics in this case is reduced. Nevertheless, a very large number of decisions based on these statistics. We, the citizens of Britain, more and more encouraged to invest in bonds that have a small portfolio of shares. Against this background, we can just be successful, similar to those who might be doing this every day for earnings and for a long time? I always thought the idea of investing in bonds is extremely suspicious. Especially suspicious arguments that accompany the proposals of the investment. I call this situation "survival bias." This is very similar to the past with the monkeys.

Let's say you are in the 1900-meters at the turn of the century, and you have ample opportunities for investment. Suppose you would have invested in securities in Argentina, the UK, the USA, Russia, France and other countries. Over time, you would have seen - since, in fact, survived only Anglo-Saxon markets. And Argentina, Russia, etc. since the early 20 th century has a lot of conflicts. Therefore, monitoring the results of the securities markets, we can say, to adjust the results of historical events. This is a story written by the victors. Investing in bonds - not a good idea.

- But you also say that the whole system, all the way, which is global capitalism, flawed?

- Not quite so. I believe that the securities market, especially since 1982, has become an opiate for the middle class. And people derive an income that is called a miracle and magic, which could create a market. They fool themselves, and at some point, thought they may have changed their views. But most likely it will be too late.

- Money drop by?

- Yes, the money drop.

- So you are saying that luck definitely plays an important role. But there is also such a thing as training projections. At least you have some of these skills?

- Definitely. The problem with the way to the press and most of the banks of the trader rather vague, as you can see, that did the trader, or do you see for the short term and exclude the results of luck. You come to the conclusion that the results were positive because they make the right moves. We seek to set aside an alternative outcome that could happen, and seeing only what has occurred. And this is a very bad way, so how can we get in trouble. In other words, if you have a random outcome is possible, You can have more than one outcome. Therefore, do not estimate selection decisions on its results, and consider taking action on their quality. What has happened over the past 15 years, bovine market, distracted us from the quality and led only to observe the results. We will be punished.

- With regard to punishment, it is interesting, as expressed in your book and your theory of those with whom you have worked in the market? Is the book part of their exposure? Generally, they want to stay in the shade?

- On the contrary. Most of them are forced to admit that very few people are successful in the sale of shares. An extremely large majority of people are failed. Traders like my book, as they hear the clink of coins. They told me: "Well, even if I am not George Soros and Warren Buffett are not, if I am not billionaire, what would I like to see my relatives and friends, this is not because I am so not competent, but mostly because of the that I neudachliv. That is why my book has attracted traders.

- But the converse assertion is that people like George Soros and Warren Buffett have been fortunate and perhaps permanently successful, and if you go back to your secondary display on the law of numbers, it becomes particularly clear. But, referring to people like Soros, we constantly ask: what, in their opinion, should happen to the world markets? We almost worshiping these people, because they think they know something that does not know the rest. But it appears, due to the fact that you say, we simply mislead.

- Yes, but my idea and the book is not that these people do not know what they are talking about. My view is that they know a little bit less than we expect.

- That is, they benefit from what might they not?

- In most cases, that they do, there is a fortune. These guys are not dentists. Dentist, I can assess, look what he did. I even can stand behind the doors of his office and ask people to open mouths to see their teeth. Since traders are not held because you are dealing with random factors. It is therefore easier to buy and sell than fire egg. So, if people only buy or sell, you can not really evaluate them as accurately as the actions of a dentist or even a violinist.

- What is interesting is that for many years, we hear about people who took their own lives, as they felt the hindmost in the market. And if we look at it from your point of view, it will come to the conclusion that people should not be about anything from their failure to take at its own expense, personally.

- Certainly. My last chapter that does not allow self to be deceived by things that are beyond your control. " You can control a lot, but that you control, you can control in principle. You should not allow their self-esteem to be broken by outside events, outside of your control.

- It is much easier said than done. Humans often consider themselves typical loser in a case that took a bad turn, even if they are not always are subject to verification.

- You're right. This dilemma was one of the heroes of the book, called "Nero", who had a rich neighbor. He knew that his neighbor, an idiot, but, nevertheless, deeply in his heart he felt holding an inferior position. And that is why experienced some satisfaction, some joy, when the neighbor lost his job and failed during the crisis of 1998. That is true. We have animals that are involved in the game of social hierarchy and clamped external circumstances. The way in which I defend themselves - the only way that I know, and it is in disregard of the news. Completely ignore the people, the results are better than mine, not uvivayas around them. Therefore, the rules of social hierarchy is not evident. You're right, it is irrational.

- Okay. But it turns out, if you look from, the news very often, as well as world events have had a strong impact on financial markets. Therefore, as you can be a trader and not to feel the pulse?

- I'm a little bit different style of work. I sell only on a narrow segment of the market and on the basis of ideas, which I am sure, totally no accident. And this is usually an advantage to people who are looking for a model where it seems to me that it might not be. So my slightly different type of trade. And so I can ignore the external events.

- So in a world where there is no certainty you feel confident?

- On the contrary, I am doing the opposite. Someone thinks that he has a certain position, but I would say that he do not. I therefore conclude that this is like a lottery. I consider only those cases where it is not right, because he did not take into account a possible error.

- Consequently, in view of what was said, you lucky man?

- I think - the average. There is a test. If you also have to live your life a thousand times, how many outcomes are radically different from the one that actually occurred? That's the conundrum. Some people were of luck and the rest of the time their success was lower. I think my life is somewhere in between. Simply because as a trader I am extremely conservative. And I really worked on a lot of introspection. And I do a lot more introspection during the trade. In my company, our meetings, we say: "Let's look at today." If you're introspective, you can protect themselves from accidents and provide a positive band. It is also likely that you will be able to reduce the effect of negative strips.

- When it comes to markets and finance, we have a lot of earnest talk about confidentiality, and assess - a very difficult task. Is there is a danger that your book has a few breaks confidentiality? Because what it is, debunk some myths. - This may dispel the secrets gurus who talk about things that do not have statistical significance, that it is easy to show, simply on the basis of these statistics - a very standard technique. But I think that my book raises self-esteem of most people who are, to some extent because it would be justified. Because they said the same thing, but nobody has drawn their attention to the words when people are passionate about bubble dot.com, high rises the market, all these things, "good", the general view (well, of course, in quotes). I think my book will give confidence to people that have been configured with skepticism and this would benefit their self-esteem.

- So, your book is "nicely left an accident" will bring hope to the hindmost?

- Certainly.

- Let's hope so.

Mr. Nassim Nicholas Taleb, I am extremely grateful to you for the interview.

- Thank you. A thousand thanks for having invited me.

Material prepared by Ivan Zakaryan

Internet security in the bank

2009-03-21T01:05:00.000-07:00

Internet is all hearsay, and if you have not been dormant the past few years have undoubtedly noticed excitement around the global network. Links to current online representation firms and public organizations have everywhere: in television, print ads, brochures, business cards, the price lists, catalogs, etc.

Internet in Russia
Please note that international policy-making at every opportunity to mention the close link success of democratization in a society with the creation of "global information highway, and large corporations in the strategic development plans take into account the possibilities and potential of the Internet. Is not difficult to conclude that the global network is becoming part of world culture and fundamentally change the way we communicate and do business.

The fact that the Internet is huge, everyone knows who has something about it has heard. But how is the development of the Russian segment of the global cyberspace, known only to specialists. And they reveal: rates of development of Internet services in Russia in 2001 were ahead of the relevant American measures. Only in Moscow, an increase in the number of users over the past year amounted to 500%. During the same time, the number of Russian-speaking servers worldwide increased by almost 50 times.

Advertisement quickly mastering the Russian segment of computer networking. This channel is the dissemination of information about goods and services become as important and indispensable for companies operating in the Russian market, as well as others.

Create your own representation in the Internet - a task which, sooner or later comes to every organization, leading the commercial activities. This is important timely decision on the establishment of such representation. Those firms that actively learn Russian cyberspace, gaining invaluable experience in the creation of new communications, new technologies for decision making, corporate organization of professional communication. This experience enables us to effectively solve many problems of everyday business.

Until 2000, Russian society divided between those who have already realized this and started to use internet technology, and all others who are waiting for something, and maybe do not feel an intellectual and economic backwardness. It turned out that the delay in making a decision about the presence on the Internet, even for six months led to serious consequences, as well as more vigorous competition from the rapid formation of new relationships fundamentally changed the situation in a specific economic niche.

Now all the "sit" on the Internet. Many companies turn to the highlighted line. But it is possible that the contents of this line is more expensive than buying "cards." Network Payment is made on the basis of the obtained data, and not for the use of time. Companies providing these services, an interest that you downloaded as much information as possible, but because download speed when using the "vydelenki significantly higher than in the" dial up ", then together with the information you ???????????? all kinds of advertising and special (bulk) viruses, you do not notice. Thus the amount of information you received increases.

System "Client-Bank"
System "Client-Bank" - the most advanced technology of the customer with the bank in 2002. To connect to the internet version of "Bank-Client" must enter into an agreement with the bank.

After signing the contract you receive:
"User's identity card, containing your assigned user ID and password, a list of available commands and the user accounts, with whom he can work;
- A floppy disk containing the file certificate certifying agency bank (JSBR Certification Agency.cer), and file-preparation the key needed to generate your digital signature (EDS). By the time of installation must be:
- INTEL-standard computer with a Pentium, color monitor with a resolution of 800x600, mouse.
- Operating system Windows 95/98/NT (SP5) / 2000 with the browser Microsoft Internet Explorer 4.01 or higher (we recommend IE 5.0).
- Access to the Internet.

Many commercial banks are moving to a system of "Client-Bank" to accelerate and improve interaction with customers. But is the system safe for the bank itself?

Security Bank
Usually when it comes to the safety of banks or other companies, their leaders underestimate the importance of information content. The emphasis is on physical safety (throughput mode, security, video surveillance systems, etc.). However, in recent years the situation has changed. To penetrate the secrets of the company, there is no need perelezat through bypass perimeter fences and sensors, to invade protected by thick walls, rooms, open safes, etc. Just enter the information system and to transfer hundreds of thousands of dollars on other people's accounts or destroyed by any node corporate network. All this will lead to massive damage to the attacked organization. Depending on the type of activity your computer may be a subsidiary or a tool to facilitate the work of your employees, or tool, without which the work is in principle impossible.

But in any case before you as a human decision-making or participating in their preparation, sooner or later the question arises:

"Do I need to protect their resources and how." Answer is: to protect it. It remains only to understand why. Replies to this question may be many, and they are all directly dependent on the structure of your company and its activities.

Do not believe vendors and integrators, who say they are equally ensure the confidentiality, integrity and availability of your information. This only proves that they do not understand what they are talking about, and are unlikely to be able to offer solution for your needs. Each of their priorities for protection. One, for example, it is necessary to ensure data integrity. Banks are primarily interested in the continuity of financial transactions. Just imagine what would happen if platezhke to the amount of payment will be added to a noughts or change details of the beneficiary.

But for the operator, the primary objective is precisely to ensure the safe operation of all (or most important) of its network nodes. Put this kind of priorities can only be obtained from the analysis of the company.

Real and virtual damage
The financial damage could be direct or indirect. Examples of causing direct damage is known a great many. They manifest themselves most vividly in the financial sector. For example, in February 2002, Bank of America was forced to turn to the appropriate law enforcement authorities to investigate the incident with the emergence of a fake internet site of the bank, which was used to mislead customers in order to gain access to their confidential financial information.

Similarly, in early February fraudsters "oblaposhili clients electronic auction eBay, and have access to data on credit cards of his clients. However, the establishment of front web sites - not the only method used by attackers. Often, they penetrate into the banking system from the Internet. Thus, for example, has broken a major commercial bank Republic Bank in Florida. Hackers broke into the system and stole information on the 3600 credit cards and their owners.

However, the company may lose money, not only as a result of fraud or theft. For example, the removal of the hub of a network leads to a cost recovery of its efficiency, which is to upgrade or replace hardware and software, support staff salaries, etc.

Losses in unproductive use of the Internet (reading jokes during working hours, downloading pornography, sending spam, etc.) for a company with a staff of 100 people would be more than 80 thousand dollars a year. For comparison - the system controls the contents of a family of MIMEsweeper, to detect and block such action, there is an order of magnitude cheaper.

In terms of attacks by hackers, the cost of restoration is only one node in an attack on him will be around 50 thousand dollars a year. This is five times greater than the value of the detection system attacks RealSecure, round-the-clock protection is not one, but just a lot of nodes.

However, finance - is not all that the company may lose as a result of underestimating the importance of information security. Not the last place is reputation, which may also suffer as a result of hacker attacks. For example, in August 2001 as a result of hacker attacks at 2 hours were suspended the sale of shares of Brass Eagle exchange NASDAQ, which resulted in causing not only financial loss.

A share price of Emulex as a result of the same attacks fell by 61% (from $ 113 to $ 43) than did not fail to take advantage of the attacker, a false press release. In addition, the company's reputation Emulex, as well as Internet Wire, has suffered substantial damage. Check service Internet Wire address the source of the press release, such unpleasant things could have been avoided.

Another reason for bankruptcy
It sounds implausible, but an attack by hackers could cause not only in loss of money and reputation, but even an end to the activities of the company attacked. According to foreign experts, 25% Disclosure of confidential company information (eg, due to attacks by hackers), leading to its bankruptcy within 1-3 months.

CloudNine, a company with six years seniority, was forced to complete the business and sell a database of all its customers to its competitor - companies Zetnet. One of the founders CloudNine noted that the attack against them has been competently planned action, which lasted for more than one month. Malefactors long collected information on key servers and bandwidth. At a crucial moment and had suffered the final blow.

Shortly before the case of
CloudNine record number of attacks on other providers. For example, at the end of January 2002 affected the representation of the Italian portal of the British Internet service provider Tiscali and British provider Donhost. The first was unable to work for a few days, a second operation was disrupted for several hours.

Conclusion
Some cases, the answer to the question "Why should protect your information?" reads simply: "So it is necessary." Who cares? State. For some organizations, particularly those systems which processed data of state secret, a mandatory requirement to protect this information. The scope of state secrets to us, for example, is tightly regulated.

One can see that all the above examples in some way reduced to cause financial harm. Starting from the direct losses due to theft or cost recovery systems, and ending with the collapse of stock prices and customer care, which obviously also affects the income of the company, on time all the invaluable importance of protecting information.

I therefore once again appeal to all who make decisions or influence their adoption, not to postpone the issue of protection of information in the bait and quickly address the security of its information security. Moreover, there is now what to choose. I hope I was able to convince you that it is necessary to protect their information. And although the process costs money, often considerable, it will prevent much larger losses.

Maxim Klyuchnikov

New opportunities for Russians

2009-03-21T01:02:00.000-07:00

As it turned out unnoticed, that the problems of the Russian middle class added one more: where to invest free cash? Statistics show: the means is, the desire to invest them - too. So far this problem has been low in Russia, but it is well known in the western developed countries.

The market, which protects against dishonesty
In the West, in particular, the well known possibility of placing money in a bank account, gosobligatsy and mutual fund shares. But much more interesting investment environment that attracts the active, and I think people who prefer to manage their money independently. They are willing to invest in the management of not only money but also their intellect and time. We are talking about the American stock market. One of the main parameters taken into account when investing is the risk to profitability. The risk is always present. Yield - unfortunately, no.

The main risk factor at work in the U.S. stock market has now become the risk of improper actions trader. All other risks are reduced to very small size. And this is one of the main advantages of the American stock market.

U.S. Stock Market in its current state inferred by the long development of the method of trial and error. Moreover, this development occurred only in the defense establishment and the convenience of investors - first, corporate, and now also private. Today, a private investor in the American stock market is fully protected against incorrect actions broker, the clearing company of the Exchange. The brokerage and clearing company is composed of one or more professional organizations that make its members the very stringent requirements, not just financial.

All the activities of professional participants of the U.S. stock market, especially in terms of interaction with customers, is governed by very detailed and strict law and under the strict control of the Senate Special Commission on the Securities and Exchange Commission - SEC, which has full powers. The effectiveness of the work of this commission can be seen even on the frequency with which even the Russian press there are reports of investigations of violations of the stock market, and following them for sanctions. Membership of professional organizations, commit its members to insure customers' accounts for a certain amount, reduces the risk of bankruptcy. Large brokerage and clearing companies often provide an additional insurance is usually several times more than mandatory. Money for such insurance is payable immediately.

What should a trader
Thus, from a trader or investor, you want only one thing - a successful and correctly deal. This, of course, the most difficult, and for the need of tools.

System access is precisely represent such a tool. This is like a scalpel - a sharp and precise, sometimes dangerous instrument in the hands of amateur.

Direct Access Systems connect directly to a trader's market, bypassing all the middlemen and offer the possibility of more recently available only to professionals. This, in turn, the amount of the trader and a measure of control over the application. Much of the information contained in the so-called windows of Level 2. They show the depth of the market on the chosen action. Execution of applications takes place within seconds of shares.

Compare this with the opportunities offered by conventional brokers! The faster performance of the application, the less "slippage" - the price of care being placed on the application before its execution. In this situation, saying "time - the money" is literally true.

In volatile market price of shares may fly or fall to 25 cents for a few seconds! In terms of a standard lot of 1000 shares - it is possible profit (or loss) of 250 dollars! Will there be a realized gain, or whether the trader has to go against losses - has now depends only on himself. With such possibilities Day Trader has absolutely no matter whether the market is growing as a whole, or falls. It does not matter, because the "quick" trading is not important global trend, but rather wave variations on it. Investors should always be able to open a position in the appropriate direction - long or short.

But the possession of such a scalpel does not make a human surgeon. In power systems, direct access and the difficulty lies, and danger. Between the trader and the market has no shock-absorbing cushion in the form of a broker. Work directly with the market demands a very good response, attention and perseverance. However, not everything is so terrible! The system is organized simply and logically, and can be configured to save the trader from any excess of choice - for example, from a choice of ways to the performance of his application. Generally, program settings preclude the possibility of "accidental" purchase or sale. Companies that provide direct access services, provide training and work with the system. Trading on a demo account allows a trader, not only to master the interface, but also "feel" the market. Often this is the first safeguard against loss in the transition to a real account.

They should live a long and happy
Companies that provide direct access service, a direct interest to their clients "were on the market long and happy life." Therefore, service companies seeking to organize the support of customers that if they do not make them rich, then at least protect against loss. The best option is the issuance of specific recommendations to buy or sell shares. On the Internet you can find many examples of such a service.

But as a rule, such recommendations are given for short periods (1-5) days and are available through the web interface. In terms of intraday recommendations, there is a problem of operational information, a trader. To this end, developed special client-server applications. Ie along with a system of direct access to the trading station trader runs the application (client side), through which the information-analytical server gives specific recommendations. Thus, in particular, to organize support for traders in the company of "Level 2 Consulting".

The analytical unit was built on neural networks algorithms, analyzes the state and the accumulated history of the market. Then the signals are formed at the opening and closing positions. At the trader's trading station in real-time displays all the applications and recommendations of the trading system. Ie main computational load is accounted for on the server. This reduces the technical requirements for commercial stations client.

This is constantly statistics and the recommendations of the trader's actions and shows realized and unrealized gains. Trader may use the information for the opening and closing of real positions, or simply treat it as a starting point to build their own trades.

Such systems do not let the trader from taking trading decisions. This is not an automatic machine for making money on the stock market, and system analysis support, and formed its recommendations are just recommendations, and nothing else. The system reduces the psychological strain the trader. Using the adopted formula in the investment business, we can say that the successful outcome of the system in the past (a lot of them!) Does not guarantee a similar outcome in the future. As a system of direct access, it is - a tool, and how useful it can be, depends on whose hands it is. The masters know the price of a good instrument.

What conclusion? Of course, the possibility of direct access platform, even as supplemented by a strong self-analysis system can use is far from everyone.

For investors who prefer long positional trade, they are probably not required. Do not work with them and those who have passion too, and not very disciplined. But traders with the analytical mind, able to see the appearance and disappearance of the collective psychology of market applications, to find a pattern in it and turn this knowledge to benefit themselves, they simply needed.

Alexander Cavallo

Sound Reasoning in the financial markets

2009-02-27T08:42:00.000-08:00

Market movement is unique, each subsequent movement of prices is not like previous.

I would like to make their arguments on the financial markets and to give his assessment of forces that have a significant impact on the movement of prices in the financial market. The task that I put in front of you, above all, is to maintain sound value judgments about the risks and opportunities when working in the financial market. Each investor, who came on the market, aims to make money and not lose the opportunity to invest next time that it was well earned. The Art of stable earnings in the financial markets to become a myth for some other reality.
While the financial markets for a long period of time and analysis of scientific prominent investors, I have come to the conclusion that money, and lose, the market really, with a probability of 50 percent. Sometimes you wonder why I, a man who devoted much time studying the market, people who are constantly engaged in trade and practical analysis of movements in prices took a neutral position, not arguing that money for ryke easily and effectively, or conversely, what to do money out of money - the challenge is unreal. And all simply because I believe that everyone at heart, or in its essence is born with some talent, that is, each of us, you, I or someone else has some hidden talent, or in another capacity, which are disclosed in the course of life.
By continually over the life of the party to which a person is, he can succeed faster than others, in this, and it is expressed by the art of individuality, each of us is a creator, but it is in fact what he knows. I dare to say that if you are now reading this article, then surely you have something inside that led you to it here. Therefore, I would like to congratulate you and say that you're on the right track.
I sincerely wish that everyone who reads this article has such a talent that would enable him to earn a professional in the market and successfully carry out financial transactions. But even if you do not get it today do not feel pain and failure. Because it can always do for you more.
There is a very interesting pattern, if you're doing a very long one in any case, sooner or later you will realize that you know much more than others. Perhaps, in this hidden secret of the success of every professional - ongoing work on the case which you are interested. Why do I say this in this article, and why I'm not even talking about this topic. In life there are times when it is not feel like working on for the represented purpose, it seems now I have so many did, but no results, gradually interest in the case that you are doing, begins to disappear and then people begin to seek a new deal more interesting at the moment . The result of all this is the ability to work in many cases little, but not in the case that started. Therefore, people who love their work on the law are professionals and are getting big goals in the chosen specialization. Thus is born professionals - people love their business, people who year after year, becoming smarter and more purposeful in the chosen specialization.
I think the right to assume that you are also standing on the right track because the financial markets and all that this is linked to your professional interest. I think that in ten years if you continue to enhance the study of finance, you will very wealthy and successful among the other investors.
Having such a small logical digression, I would like to go directly to the topic for which I began this article, and in particular independent reasoning successful acquisition of capital and loss of capital at work in the market with real money. When I enter into a transaction, I make financial transactions and try to adequately talk about that work with real tools for financial or stock markets is safe, and make it as easy as simply walk into the store for shopping. When someone claims to lose a considerable amount of money in the market that make the market does not really express and confirms exactly what he had lost a considerable amount of money, if not all paying attention to real examples of other successful investors and traders . I, in turn, loan the article neutral simply sensible teacher who will show you both the positive and negative sides of the market, but to earn a losing, or giving a professional money manager - is a personal matter for each, guided by the factors I quote.
There is a very interesting statement, which reads: Rich immediately invest, then spend, while the poor just spend the remaining funds to invest. So as soon as there are rich free money, it looks for ways to invest, in order not to lose and multiply money. Invest the money could be anywhere ranging from real estate to their own bed mattress, where no one ever finds your hard earned money. If a person inexperienced in the subject of investment, it just gives money under professional management, certainly not a big percentage, but it will not be thinking about what a report on unemployment and how to publish the Americans proreagiruet to this message market, because they rotate and my money. Give the money an investor can, in principle, consider that you are done, but what happens in reality. No doubt the investor is well qualified that by law allows him to call a professional. These professionals are rarely lose money, but profits are typically obtained by these professionals, will be divided between you and the bank or investment fund. So, get your money grow if you feel like doing their business. Of course, there is a likelihood that an investor may lose some small part, but it did not happen as often as professionals always know what to do in this or any other situation.

There are people who do not trust their money to people on a number of strange set of reasons. In this case, it is possible to offer another version of a financial investment, in particular, to form their investment package. The successful formation of the package could allow to obtain large profits or lose money. The key point in this case is possession of information to investors and the proper use of this information in financial transactions. In this case, the likelihood of getting more profits increased beyond this, and the risk of loss of capital is also increasing. Many are at such risk, and then either become professionals in their case or lose money in the market and go away forever, arguing that the money market is very difficult and even impossible for some.
A typical situation is how it all began: the market has come a trader, brought hundreds of green, of course he came in the hope of earning and saving time starts. It takes some time, a trader in a hurry make mistakes, which in turn leads to a loss of capital, he starts to panic and immediately seek aftergame do not think that if the market went against the first time and stop-loss record, it is possible that no long-run trends and market consolidation. Making a few deals - no deposit, a trader disappointed hopes, and their dreams of wealth evaporate into the heavens. As a result, he begins to argue that the money market is not realistic, what is it, strictly speaking, and human, as he showed it in practice.
Now we can see several views and principles. First - where real people make money in real time. Second - when fans try to make their own money and do gradually grow up to the professionals and the third are the losers. As a conclusion of this article can be said that, at the place you put yourself and to reach. Each initially gave me a place in the world, such as the loser does not think about how to achieve success, he simply sees the causes and results, not breaking the intermediate stage of success, consistent training, he loses. Professional immediately understood that in this life is not given immediately, and small pieces, so it slowly climbs to the summit. But it will stay there for a long time and still be able to help one person get there. But an amateur and will be continually engaged in the full enjoyment by investing some amount, losing and gaining, but its purpose will be to obtain aesthetic pleasure.

President AlMaz Group Inc.
Alexander M. Mazurkevich

Interview with trader: Andy Bushak

2009-02-27T08:32:00.000-08:00

Andy Bushak always been interested in trade. He traded, while he was in Annapolis, during his service in the Navy, and when he was a halfback playing football for the "Cleveland Browns". However, Andy did not consider his career as a trader when started, yet he has not received adequate commercial "education." In the interview, Andy talks about how he was educated in the trade. He is actively traded on his own account since mid-1980's, and sometimes sold to hedge fund. Currently, he works with Tom Joseph in the "Advanced GET" and regularly conducts seminars with Michael Kvanbekom.

Question: How did you start selling, and when you became interested in this?

Andy: I am interested in the markets for a long time, and the trade was something that I always wanted to do. I started to invest, when he was in the Naval Academy in Annapolis. I had a broker and invest in options. But I would not be describing this trade. I just took, trying to find their own way. I started my career in the trade after receiving what I call my "education" when I learned more about the markets and how to sell them. I did not understand this, when I was in the navy, after the academy in Annapolis. I thought that was supposed to get an education. I had to learn for themselves about the market in more detail. I could not rely solely on your broker. I do not think the broker knew what he was doing. I think this is my money, and I have to figure out how to trade them for yourself. When I realized that was supposed to receive proper education in the trade, I started to become a "trader". This period of education lasted from 1982 to 1985. I studied Elliott Waves, read a book on technical analysis. It made sense to me, although it was somewhat unusual. I understand that many people do not believe that technical analysis has any meaning, when they begin to read about it, especially the Elliott Waves. But, it made sense to me. At the time I sold some shares and options. But then I decided that if this approach actually works Elliott waves, and I understand these patterns, why such a confusion in options? Why the market is not in motion immediately? I want to know immediately, right or wrong I am. And then I began to trade futures.

Question: What was your major subject in college?

Andy: My main subject was the operational analysis, where I learned a lot about probability and statistics. After Annapolis, when I had fulfilled its obligations to Fleet, I have replaced a lot of different jobs. One of them was the navigator guided missiles. This was exactly the same way as trade in the markets. I used the sextant to the motion of stars to find out where I am. This work also used a large amount of mathematical information. When I spend seminars Mike Kvanbekom, he calls me "navigator." I studied to find out where I am in the market. I am also quite well with numbers and pricing information, this relates to Hanna, or Fibonacci. This seems to make sense to me.

Question: How do you form your initial trading capital?

Andy: I am not earning as much when he was in the navy, but I saved a few dollars there. I had the chance to play professional football, when left the Navy after a five-year contract. At a time when I served, I maintained contact with San Diego, Dallas and Cleveland. Dallas offered me a contract, just as Cleveland, but Cleveland was my home town, so I decided to play for him. I spent a year playing halfback, but was injured, and my football career ended. I hurt the knee. Then I went to Houston and worked for "Hewlett Packard" in five years. At a time when I worked for "Hewlett Packard", I got my "education." At first I viewed the old "Financial News Network". I started to sell only the main index in each market. I traded in futures, with no real-time data. My broker said that, I went mad and sent me to a portable device to monitor prices. At that time I was building market charts manually. I looked at what graphic models arise Fibonacci levels used to determine resistance and support. I moved into sales, working for "Hewlett Packard" and built the market of graphics at the same time. And the time when it was necessary to make a choice where to make money, so I left "Hewlett Packard" and began to sell full time.

Question: How do you have to work in the "Advanced GET"?

Andy: My wife and I decided to return to Cleveland, when I started trading full time. I read about the Tome Joseph (President of "Advanced GET") and Elliott waves in the journals on Futures, and I noticed that his company is close to Akron. I met with him and we chatted for several years. When my daughter was born and the house became too noisy, I had to find a place to trade. I said to him, and he offered me a seat. I sold for "Advanced GET" software. Instead, I got a place for trade and free access to the data.

Question: Are there still any advantage in the "Advanced GET"?

Andy: The workshops really helped my trading. Helping students to understand the trade, I actually traded during the workshop, and it helps me look at my trade from different perspectives. It helps me to return to normal. One problem, when I sold the house, was that I was feeling a little lonely. It was sometimes difficult, especially when I went at the wrong lane. Exit from the walls and the holding of these seminars helped me to confirm his trading strategy, it returns me to the rhythm. I get the opportunity to review their trading strategies with others.

Question: How do you think you had to overcome many obstacles in his life to become a trader?

Andy: I see my life as a passage through various stages. I went from one stage to another, and I try to succeed at any stage, in which I live. I am not inclined to look back. There was a time when I was in the Naval Academy, served in the navy, engaged in professional football, worked in the "Hewlett Packard" and where I am now. This is something that I always wanted to do. This is another sphere of life and age. I try to make every effort to do so.

Question: What you have done in another way, when they started to trade?

Andy: At the time I received the first automated system. I started using "Future Source" for quotations. It was a success. Until then, I had always been to build a pre-market schedules. However, the automated system makes the graphics for me. The only inconvenience - is that the system offers too much information. There is a tendency to look at more information than you need, which makes trade a little harder than they should be. I try to - the possibility to simplify it again. When you return to it, then realize that to succeed in this business need to try to keep it all as simple as possible.

Question: Do you think students in your seminars are trying to look too much different indicators?

Andy: Yes. We try to focus them back. Mike Kvanbek and I always say our listeners seminars to keep our system simple as possible. But I think it is a normal trend - look at too much unnecessary information, especially in terms of automation, and when, first learn to trade. The key, however, is concentrated on a few elements. Once you've done the analysis, there is nothing that more should be done. You must log in to trade and manage money. It is - everything.

Question: Managing money is a major part of trade?

Andy: Absolutely. Managing money - is the most important part. The question is not how many times you were right or wrong, but how little you have lost compared to how much you've earned.

Question: What do you do specifically in this area?

Andy: First, I look at the ratio of income to risk. Basically, it is rocking and correction. If you think that trend is going to continue in the same direction, then you're hoping to buy at correction. At this point, you can assess what will be the return, when you return back to the previous maximum Fibonacci and looking to rebuild, you can estimate the risk to be limited to stop order just below the minimum. Generally, I try to look for opportunities where I can at least have a ratio of 2 to 1 or more. I feel quite well in this location. Based on the ratio of winnings to the losers, I usually gain about 50%. As soon as you join together yield-risk and wins, losers, you all have taken into account.

Question: do you assess their attitude to the loser wins in numerical terms?

Andy: Yes I am doing well, but it is not important. The key is the ratio of return to risk, and then if your trading strategy is, the ratio of winnings to the loser will work by itself.

Question: What percentage of your account, you run the risk in a transaction?

Andy: This is an interesting question. I have separate accounts, so I look in the light of all the accounts and certify that I have enough cash. I am generally very conservative. My aggressive expense is approximately 20% of my full account. I traded in this account is very aggressive. I traded it in futures, currencies, and the like.

Question: What percentage of income you receive?

Andy: It depends on how the count - from aggressive or complete. By all accounts, where I sell everything and use different strategies (for example, shares with the use of positional trade), I'm trying to achieve revenue of approximately 20% or more. Now, with regard to futures and aggressive accounts, it is much higher. I am not trying to make excess profits, I just want to get 20-25% of their income on all your accounts. This year I have a little lag. Right now I am, probably for about 15%.

Question: How do you evaluate their work and how often you do it?

Andy: I have the check list. I try to evaluate their trade often enough. I think that everyone is doing some review, whether at the end of each trading day or at the end of trading week. I watch all the transactions back to the relative gains, losses, returns to risk, etc. and look for it.

Question: Have you ever installed a dollar goal?

Andy: I tried both options. The problem is that when you set a dollar goal, like $ 1000 a day, you only stay at $ 1000. Now I try to take as much as the market can give me on a certain day. Sometimes I sell only a few times. For example, today I traded twice and made a total of approximately $ 500. I was not very aggressive today. In contrast, the other day at a seminar on trade, I made $ 5,000 during the trading day, after four or five deals with the different sizes of items. I try to just stay on the positive side. Usually I try to make at least four figures on a daily basis.

Question: Do you think the score in the dollar could increase the voltage?

Andy: Sure it is, but if I can quickly determine where my stop-order and what is my risk, it reduces stress. Once you place a stop order, it reduces your risk and the tension immediately. I just look at it and appreciate what number I want to take risks. This applies not only to the level of stop-orders, but also a certain number of contracts. I can sell three, but I can sell five and ten contracts, but if the risk is not acceptable, I will adjust the amount of my contract.

Question: What was your biggest position, winning and losing?

Andy: I remember the time when I basically traded in the currency market. It was a good market, even for intra-day trading. Then the slack period, but recently the situation has returned back to normal. I remember one day when I traded for yen. I have made approximately $ 18,000 during the trading day, that was a good trade for me. But there have been terrible days? If people tell you that they did not have bad days, they lie. I now know that the only time that you remember as a terrible day - that day when you do not put any stop order. I remember one day when I was in the market. I was in their children and do not put any stop order. I should have done a little scamper with children, and by the time I returned, I bore the loss of approximately $ 10,000. It was awful. And the reason for this was that I did not put any stop order. That was a good lesson. If you limit your losses, you will not be a problem.

Question: It was the first time in your trade? You did not know about it?

Andy: Yes, I know, but it is something that relates to the internal condition. You find yourself in such a psychological condition in some moments when even the most simple things, like the installation of stop orders that elude you. You try to auto itself. Regardless of how you want to harm yourself, you should only put the stop-order. I am currently trying to be quite rigorous in the case of stop-orders.

Question: Do you think that there is an occasion for self-destruction?

Andy: Trade alone, but not in the group, is one of the most difficult things. As the battle? This - not necessarily the market. The battle ends with a direct yourself. This is the main reason why you should have very good rules to determine the transaction input and output. We talk to our clients, "if you were trading for less than five years, you - is still a novice." After five years, traders are those starting points, where they may harm themselves. They are structured, where they clearly define the rules that protect them, even against the tendency of self-destruction. If you are going to survive as a trader, you must follow these rules.

Question: Fear and greed cause people to violate the rules?

Andy: There is greed on the one hand and fear on the other side. Rather than be greedy, you should think about the fear of greater loss, and then simply hope for a big profit. Do not feel greed for more profits.

Question: That is to focus on fear?

Andy: Yes. We need to focus on fear. You must maintain its capital. Otherwise, you will not stay in this business. We want to make money, but there is one thing that I always say at the seminars - "what makes this business totally different from other types of business - is that it is a business where you should expect to lose money. Once you figure out how to lose and keep the losses are small, you really start to make money. "

Question: Have you been a mentor to trade?

Andy: No, and I regret that I did not have it. That would make my own study of the curve is much smoother and easier. When I began to actively trade, I learned of other traders. I have been familiar traders, who were equal to me, and it helped, but I think during my initial examination of the process, it would be much better to have a mentor.

Question: You keep the trade magazine?

Andy: I had a magazine. I actually print out charts and make notes to them, and keep a folder of all my transactions and everything else. Now, given the complete automation, etc., I can not print graphics, but I really keep track of their daily transactions. I say to myself, 'OK, today I had four deals, the five transactions and so on. " I look at their winning and losing the deal and determine its profitability and its risk.

Question: Did you ever try to control their thoughts and emotions?

Andy: I did that very often. I really do not do this because I think that connects them together. I encounter the same experience many times, so I do not need to monitor their emotions on purpose, but I have little to do so. I actually had a tag, where I tried to understand their emotions. I had the rules for themselves. For example, if I had four, five or six losses in succession, I would stop and take pause. I knew that something was wrong. Now that I look at it more in terms of money. If I have a period where for some reason, I have the minus 4% per month, then I say to myself, "Perhaps I should now cease to trade, because something is not working."

Question: When some psychological factors come to the fore?

Andy: Psychological problems occur with very large positions. I traded some for a friend who drove a great foundation. We knew each other for a long time and talked every day. When he was leaving on vacation, I traded in its accounts. One day, we traded in the currency market. The biggest deal that I ever made was on the yen to $ 80 million, subject to the credit leverage, that there exists. I thought, "I have never done before, and that if I suffered a loss?". I started to become uncertain. I questioned where to place your stop-order thinking and the desire to withdraw from the position. But, I was able to commit itself to the hands and feel comfortable selling the position of this size. It boils down to the reminder that you have done all that can be done. You do your analysis. You did your homework. You entered the market, and you already know what you are going to risk it. Once you become comfortable with the level of risk, which is laid in any transaction, then half the battle won. You should evaluate your previous transactions and look back, reminding myself that it works mathematically. You can stay, but if you keep doing a good deal, it will work. We again return to the availability of good rules. If you have a good rule, it results in the order of all the other methods that you may have.

Question: How can people develop a greater tolerance for risk?

Andy: Trade - this is just like learning to ride a bike. You can have a theoretical knowledge of how to ride a bicycle, but you must sit down and really try to go on it before you can actually learn how to do it. You can visit the many seminars and read many books and articles are very well educated about the markets, but you should really take to do so. You should go on this bike. You can start to go down. But if you have the proper equipment, you will not travmiruetes. You must understand that as long as you place your stop-order, you can make money regardless of your chosen strategy. As soon as you place your stop-order and manage their risk, right from this moment on, you begin to feel better and have greater tolerance for risk. You must become comfortable with the responsibility of following the rules in your trading. You have to develop some kind of trading strategy, and to be able to decide what to do next. You must open positions and to place stop orders. Do not doubt on your analysis - just manage the money. Once you begin to carry out this paragraph, the rest goes by itself.

Question: Did you do anything to prepare themselves emotionally and psychologically every day?

Andy: There is one thing I do. This is akin to preparing for the football game. What are you doing to prepare for the football game? For an entire week, you see the game the other team. You begin to look at the trends and everything else. Then, you practice. When it is time to play, you do not have to think. All you have to do - is to respond. I do the same when preparing for the trade. I try not to think. I try to just react. I have already made a part of their homework. I look at some long-term schedules. I am doing some constructing lines Hanna. I expect some good numbers as the levels of support and resistance. I collect information on the greater picture of the market. And then on the intra-day schedule as soon as the market starts to move and start to develop a model, what should I do - is to respond. This is easy. Positional trading works exactly the same, but we have a little more time to think about it. You make deals on their day, perhaps, according to a weekly schedule, but it is the same process. You did your homework, your market is in the area of trade, and you just react. If you have some good rules, you skip a lot of emotions, which may interact with the trade. As soon as you enter into a state in which you do not think too much, just react, and emotions are under control. The only way to achieve this state is to know his subject. If you know the command, which you opposed, which means that you have done your homework in advance, and become much easier.

Q: What if your opponents are trying to deceive you? What if you make a mistake?

Andy: Yes it is. As I said - this is one of the businesses where you should expect to lose money. When you think you know what might happen, or think you see a model that should be developed in some way, then remember that not always the case. You must accept this and say, "I am wrong." You must understand that you will not win all the time.

Question: How do you think your sports training to help you?

Andy: Yes. But if you want me to give you spisokpredyduschih professions traders that succeed in the trade, then it follows that the ex-pilots are quite good traders. They are used to follow the instructions. They also rely on their equipment. Good traders follow the instructions and trust in their trading strategies. The pilot could not fully know how the plane, but he trusts his equipment, and flies in an airplane, respectively. Other people who succeed in the trade - are former military and former athletes. Former athletes, especially some of the guys that I saw in the exchange hall, when he visited the Chicago exchange, try to make trade simpler. They do not have too many rules. They keep trading simple, do a little homework, and simply react to market conditions. These guys fit to computers, just to look at the price levels in each market, and then recorded the data and went to trade more. Their actions were based on what was happening around these price levels. They just react to them. They tried to keep trade fairly straightforward.

Question: Why do you think that some traders are starting too emotsianalny?

Andy: One moment, pointed to by Mike Kvanbek on this issue - he believes that they can not be adequately capitalized. If you do not have a good financial base, it can become quite emotional. You start to lose, and start to look at your dwindling capital. With a small capital market is easy to go against you. But if you are well capitalized, and you have rules that are quite clear, this issue is resolved. This can also work the other way. When you have too much money, you need to stabilize themselves on the level when you're not worried about the number of dollars. These two extremes are the primary, where people are the most emotional: insufficient capitalization and when you go to trade on big money.

Question: I think that being a soldier, especially in Annapolis, you were a good school with regard to discipline and following rules.

Andy: Yes, you're right. I think everything that relates to my education, my military experience, and professional sports have played a positive role in my ability to trade, manage their emotions and follow the rules.

Question: What are you most like to trade?

Andy: I do not even know what to choose. I remember when I started, after the stage of education when I started trading full-time, I could not wait when the next trading day. Even on weekends, I could not wait until Monday. The point is that I like to call. This is like a sport. I am going to compete. I have a game plan that I am going to try. I begin to act. I enjoy this part of trade. Now, when I think about it, perhaps trading - a business in which I was supposed to be. I can no longer be a sportsman. This is - a business that gives me the same kind of call that I received as an athlete.

Question: Is there anything else apart from trade, which brings you such excitement?

Andy: Yes, that's sport. I'm still going out and doing sports. Before this interview, I went to scamper, mash the muscles, joints. This helps to keep my head and my emotions in good condition. It clears my brain. This allows me to feel good. If you feel good, you feel confident, you have fresh head, and you are much better.

Question: What you do not like to trade?

Andy: It can rightly demand more time, especially when you're trading with someone else or to someone's money. This may become a necessity, especially if you are trading currency and you have open positions. You may have to stand up for the night, because there is a movement in Europe or Japan.

Question: Do you believe in maintaining a good balance in your life?

Andy: Of course, there is no doubt about this. You must have balance. This is definitely.

Question: How do you support it?

Andy: I have a family and I love them. I like my job, and I must find time to do so. I must find time to manage their money, and I must sell. I also conduct workshops and preparing educational material, which I really enjoy. In those days, I feel like in tone. Before I began to conduct seminars and sold the entire time I was not well balanced. Now, I feel better. My thoughts far better organized and I feel that trade is better.

Question: What is the emotional and psychological advice would you give novice traders?

Andy: In the book "The market wizards" my favorite quote was Paul Jones saying: "Now I spend my day trying to make themselves as happy and relaxed, as far as I can. If I have positions going against me, I immediately get out if they come in my direction, I hold them. " You do not want to keep the playback position for too long, but if you have a winning position, then you try to go to them until you can. I have this quotation has been glued to the computer, when I traded full-time. I think this is important. I also remember that my broker told me many years ago. I had a bad day, and he said, "in which direction the market moves from left to right on the screen?" I said, "He is moving up." Then he said, "so why are you in the short position?" That is, if the market moves up from left to right, then you should be in a long position. If it moves downward from left to right, you should be short. So do not worry about the fundamental data. See where the market is moving, there you are, and must sell. This is how the Elliott Wave. Do you have a movement upwards and there is a correction. As soon as there is movement down, and you will always hold a stop-order to manage risk, you have everything in order. It's easy.

www.innerworth.com

Cloud Of The Doubt

2009-02-03T04:02:00.000-08:00

In this paper we consider one of the situations in which to enter the market is not recommended. I called this time «a cloud of doubt». Typically, the cloud is formed by passing the important points of resistance / support or clash of bulls and bears. Or when is not clear where to move the market. Let's try together to understand this situation and not get «elk». Let one of the few such situations. And a recent review of Perforation resistance 1.2940. I explain how I found this resistance, as many traders look for the data in different projections, etc., at a time when everyone can easily find this level, I even have to say - is required to be able to find. Well move on to the case.

Weekly schedule:

We see from the left point, the box in the red circle, it is just above the maxima will be located an emotional level of resistance to 10P smaller, more does not matter, microscopic precision is not necessary. So we found our resistance.

The second circle is our place for research. Many will say to say that for easy stories to tell and analyze the past already. Say - «show better, where will tomorrow evra?». I have an answer to this question. I say - I do not know. I always go for the price, but do not predict it, where it will be tomorrow, in five minutes, after a week or a year.

So, continue. Switching to a shorter period - for full-time schedule.

For further analysis we will use the 5 tools. SMA (21), SMA (180), Stohastic (7,10,3), Parabolic SAR and MACD Siberian standard settings.

Daily schedule:

Consider the daily schedule.

On the day seeing all the signs of a turn upward trend. MACD gave a signal to sell it proves that the mood of the crowd at the station, Stochastics also had confirmation - leave the area perekuplennosti thereby signaling the beginning of sales.

Got to two false signals from different indicators. What conclusion?

Close to such levels do not trust these indicators? - Of course not.

Parabolika, short and long, medium, showed a steady upward trend.

There was a breakthrough because even a short sliding.

Especially at this site parabolika was under the protection, ie for short-medium. And it said that the trend is protected. Why do so many traders selling at this level, for me personally - it is not clear.

I think that at this level of sales could perform only after a brief breakdown rolling and changing rate parabolika. It thus would be a confirmation signal from the indicators on early sales. This one could finish the talk, laugh, and show the finger at those who have had the imprudence to sell here. But the depth and go on. If you carefully consider the candles that surrounded by a red circle, you will find a variety of false turning combinations.

That is what I call «The big cloud of doubt». Then explain why so called it.

Four schedule

Consider now the site for 4ch and 1h schedules.

At 4ch graphics on this site has been noticed several bear MACD-divergence, any MACD-Histogram hill after a large, bear seen as a signal for the sales, Stochastics had confirmation of these signals, a total of about 3 diversification, I would like to note that srabotki enough good, profit can be caught with the right approach, well now we do not know. To explain this behavior of the crowd easily. At these sites the crowd divided into two categories: those who work on the samples, and those of a breakthrough. Bears are looking for a signal to any sale of bulls and of the signals to buy. When leaving the price for resistance, traders, playing to return to the channel, considering diversification MASD and Stochastics signal the beginning of sales, and drive the price to have the so-called support. There they are happy to meet with the bulls to perceive touch on the support price as a signal to buy - on the rebound. "

That's the beginning and the chaos of battle between the bulls and bears. This is again - "a cloud of doubt."

At the station an active mood, a lot of sales and a lot of shopping. Here every doubt, think how not to miss a turn and a more advantageous position to enter, hence the name.

So when will we enter into the market? - You ask.

There are two options.

Option 1:

You can settle with the bear diversification MACD (I noted them with red circles - this is a confirmation 4ch divergence, and more accurate input.), So you go along with the bears, who think that this is a false break. But because we dodge the crowds, and we will go in a collision with the bulls. (The points of collision with the bulls, it signals that the bulls take to buy, then we will consider)

2.Mozhete enter the tangency points of the long moving average (they are marked by green circles), is a foot lower than the resistance.

The points of collision bears and bulls, and there - "the clouds of doubt."

Time schedule:

During the symposium leave. See you soon.
Tolstykh profit and wicked moose

Author: Smagin YA aka URAN.

The advantages of trading systems to other methods of decision-making in the securities market

2009-01-30T03:39:00.000-08:00

The advantages of trading systems to other methods of decision-making in the securities market.

In order not to be at the scene of sheep and pigs, and if they have, then be able to quickly get out of the market, you need to understand the strategies of the market all the dealer groups, ranging from professionals to ordinary investors.

The approach any stockbroker to trade in a 100% mechanical, or by 100% subjective. Meanwhile, stockbroker, who have designed and well-designed trading system, there is no need to take commercial decisions themselves. They have a plan that says exactly what to do in any situation. All of them want to ¾ is to monitor the market to determine what actions are dictated by the trade and plan to order the broker. Most often, these plans are computerized trading. Dealer enters the market data and trading system was said to him what to do.

On the other hand someone who is not trading on the plan, has no fixed rules. It takes trading decisions subjectively, when he pushes the date, he has no guiding thread, except his idea of what will work well. While he tries to learn from previous mistakes ¾ this does not help, because the correct decisions are not always end in profit and incorrect decisions did not always end with losses. But do not categorically assess the chances of such dealer, dealer history knows examples of successfully applying the analysis of Hanna, Fibonachi or astrology, and providing that there is a market order, but in this case, their success can be largely attributed to good management techniques in cash and a disciplined risk control and not the correctness of the provisional theories or methods of prediction.

For dealer selling not characterized as mechanical and emotional side of decision-making. The effect of fear and greed just remarkable. The nature of rights is that under the influence of these feelings, he invariably takes a mistaken decision to speculative arena: so instead of closing the lucrative positions, he pays an additional application for the purchase of the broker at a time when the trend is already waning. One of the main dist 2000 inguishing features of the professional dealer in the fact that they have learned to control their fear and greed. They do this through self-discipline, which implies that the decision-making process has a structure designed, moreover, they are subject to signals from trading systems ¾ in fact, it is the only way to minimize the emotional strain, will inevitably destroy each trader.

All are more or less successful Throgmorton Street, not to mention the big investment companies are applying a relatively mechanical approach may find themselves unaware. Instead, most fans are more likely to use a subjective approach, following the short-term changes in prices as a guru. Many professional financial managers will have a system that is 100% mechanical. Those who do not operate 100% mechanically, typically allow themselves only a tiny number of opinion beyond the scope of their system.

When fully mechanical approach at the dealer will have a group of markets with which it will work. He will be the mathematical formulas that are based on the previous price talk, when to buy and when to sell. Will the rules of entry, exit rules to the playback position and the rule for vyigryvayuschih positions. Will the rules, when the trade and when to complete each of the systems. The only challenge facing the dealer, will be in the initial selection of a suitable market for each of its mechanical trading system and optimizing its parameters on the basis of available historical data, so that does not fit your trading system using historical data, and simultaneously to achieve the statistical advantages according to which:

(the average winning trade) * (% of winnings) ¾ (the cost of a broker and slippage)> (mean losing the deal) * (% losses)

Such a statistical advantage, but could not reach traders selling subjectively based on their perceptions of the market. Their income is likely to depend on the simple everyday factors, since these factors, not to mention the impact of rumors and guru, will influence the perception that the subjective traders would see on a computer screen.

In technical analysis, there is a whole lot of mechanical trading systems automatically decision about buying and selling securities. Some of them are quite complex, have their own methodology and understanding the market and contain several indicators, while others are based on a single indicator: whether moving averages or parabolic system, and also show good results. Many disadvantaged experience, stock analysts are trying to use as much as possible indicators in the trading system, and at the outlet willing to get a single consolidated signal. Typically, these analysts use several indicators of trends for the signal to start the trend and a host of indicators characterizing the zone perekuplennosti and pereprodannosti. But such searches cherished system with multiple indicators, according to the author's work, the vast majority of cases are doomed to failure because of two simple reasons.

The first reason for this ¾ contradictory signals: for example, while the use of parabolic systems and grid systems on the market slightly trend often signals of different forces and, if considered oscillators, the more they can often conflict with each other. The second reason is undesirable use of multiple indicators ¾ this delay signals. Even if the system is, for example, the trend of several indicators to it, because of construction, it is necessary to receive signals from at least the majority of indicators. But due to the fact that the trend indicators are the delay or, at best, simultaneous, the signals from the trend indicators will come only after the beginning of a new trend, and the overall signal received at the time when the trend is maturity. At that time, professional Throgmorton Street will gradually close their positions, and Throgmorton Street with trading systems to help them by engaging with them in the transaction. Closing position at such dealer will also occur at a time when the trend has changed and has become a recruiting force. From all this it follows that the use of such trading systems are either not efficient or inefficient and risky.

By virtue of the above considerations, to use the trade system with a small number of indicators and a tendency to detect at an early stage, rather than catch it for the tail. "