Mechanical And Analytical Approaches To Trading.

There are two approaches to trading – “mechanistic” and “analytical”.

- Features of techniques of analytical trade: you can benefit by extremely flexible approach to the market.

- You will have a free personal order of work.

- You have an opportunity fast to reach the big profits (or losses).

- You have a potential of extremely favorable parity a prize – loss.

- There is an absolute necessity of strict management by yourself.

- Concerning the small capital can be enough for achievement of the purposes set by you.

- Concentration on rather small number of the markets not only is comprehensible, but also is preferable.

- Features of techniques of mechanical trade: the bad parity a prize/loss the rule, instead of an exception.

- The methods of testing based on the historical hypothetical data, as a rule, for many reasons very unreliable.

- The majority of mechanical systems in the end refuse.

- Simultaneous application of set of systems in the several various markets is necessary to smooth a capital curve.

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- It is necessary concerning the big capital for inevitable subsidence.

- It is necessary constant (without breaks) fulfillment of all trading signals.

It is obvious that the analytical approach is good for independent, small investor, and mechanical – to average and large capital investment organizations.

However, application of purely analytical approach fast leads to full breakdown not only beginning trader, but also more skilled. What is the matter? The problem is that the overwhelming majority understands the analytical approach as trade in general without accurate rules, without the developed strategy, as free creativity. And over and over again the market shows an inconsistency of such irresponsible approach to business, and all is vain.

The trader should have an accurate trading system. How is to be? How is to connect dignities of both approaches, having compensated their defects? One of ways of the decision of this problem is in the tactics of sliding channels. There are absolutely accurate, unambiguous instructions and interdictions, but also is rather big freedom, approaching this tactics to an analytical method, at the same time.

Where is this freedom? It is in definition of the moment and an input direction in the market. Construction of channels subjectively enough in itself, and my attempts to formalize this process essentially reduce efficiency, reduce to level of sound mechanical trading system. Acquisition of experience in construction of channels, intuition, application of any other additional signals (from, for example, favorite indicators), can sharply reduce unprofitable series of bargains. But also on it each trader should have any accurate rules.

Here so trading, everybody also loses. And not to lose, and even on the contrary, to earn, your actions should be set in the rigid scheme. It is advanced by an order of an exit from the market. Here this part of tactics should be absolutely rigid, and executed accurately, fast, without doubts. Here enters obligatory stop loss, actions at growth of losses, actions at profit markup.

Before you decide to make a forex investment or start forex trading yourself, better find a nice forex book and read more about forex market – this will save you from lots of troubles and traps.

Mechanical And Analytical Approaches To Trading.

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