The market can deceive

How long could hold on in casino business if the majority of its visitors did not lose, and won? The same and in the market. To continue to exist the market should operate so that participants lost. Otherwise whence to take money, to pay to winners if wins the majority?

The casino has certain advantages in comparison with the market - it can establish in advance such game rules which will provide to the owner mathematical advantage. The market cannot directly supervise how each individual player will play. The majority of traders are the clever formed people. They have practically unlimited sources with the information on how to trade. They have powerful computers with the clever programs, intended to win the market. Why then so the percent of the traders incurring losses is high?

The well-known answer consists that traders cannot in a sufficient measure operate the emotions for success achievement. It is certainly true. Other less known reason consists that the market constantly misinforms participants. I do not wish to tell, that the market possesses the will or there is законспирированная a grouping among insiders, set as an object to manipulate the market. It something an event by itself because of the market nature. The market reminds the opponent whom all time tries to force to play you badly.

Most the general explanation of this phenomenon is the concept of casual self-strengthening. Traders are not always remunerated at all by profit when do all correctly, in the same way as not every time they are punished by the loss when operate incorrectly. Therefore it is extremely heavy to formulate, that is correct, and that is not present. Compare to an electric fencing. Each time when you walk along it and do not touch wires, you feel perfectly. Each time when you touch wires you receive electric blow. Therefore neither for people, nor for animals a lot of time is not required to learn, as it is necessary to address with an electric fencing.

Think of that, it would be how much easier to study to trade if each time when the trader does not follow correct procedure of decision-making, it automatically would receive the loss. And during too time if received compensation in the form of profit each time when made the correct decision. You could be learnt correctly trade much faster.

As the real opponent, trying to force you to trade incorrectly, the market constantly sends you misinformation. A considerable part of this misinformation is that the market constantly changes the behaviour so even the successful trader should be constantly vigilant and ready to change the approaches for profit preservation.

Whether you paid attention to those constantly low results which are given by various trading advisers (trading experts)? It is usual an example of known thought that any mechanical approach cannot be successful very long as the market varies.

Everyone successful trader has set of the periods when its system or a method cease to work. If the market has changed, to do with it already anything it is impossible. You can fix only a problem and try to change system. It is the reason of vicious practice reoptimised trading systems. Let's assume, that you have the fine trading system based on three sliding averages. At testing for data for the last years it has brought simply inconceivable quantity of profit. It is natural, that you use different sets of the optimised sliding averages for the different markets, as at each market "person". You were adjusted on the markets and are ready to trade.

But stop! You know, that the market constantly varies to unsettle traders. Therefore it is logical to assume, that the correct set of sliding averages will vary in due course. Therefore as a part of your approach you establish for yourselves periodicity reoptimised the system of sliding averages - and the more often, the better.

Allow to open to you a small secret. Your system it will be always excellent to trade in the past, but will yield, most likely, losses in real trade, without dependence how it is frequent you it reoptimised. Yes, of course, you will have the periods with decent profit. It will inspire you. However it is the market has thrown to you the next portion of misinformation that you have cheered up and have continued in the same erroneous spirit. In the long-term plan if not to take in calculation unusual luck, you necessarily will lose.

I do not wish to tell, that the market does not vary. It abundantly clear does it. One of my favourite sayings about the market says: "In the future all will be also, as well as was, only differently." All that I wish to tell, it that any attempt to modify your approach, to correspond to the occurred changes will be similar behind attempt of a dog to seize for a tail.

When you reoptimised system each two weeks, you thereby do the assumption, that within next two weeks the market will behave also, as well as previous two. This pleasant assumption, whether however is the proofs confirming it? Researches show just the return. The best parametres for a following period most likely will not correspond to the best parametres of the last period without dependence from what time window you take.

When people ask me a question on how from behaviour of system for last 12 months to receive the information on how this system will behave next 12 months, I always ask a question. That forces you to think, that the market of 1997 will be more similar to the market of 1996, than on the market 1987 or 1993. Actually 1997 will be faster is similar to other previous years, instead of for 1996.

The purpose of this market misinformation is to cause in the trader suspicion to correct profitable methods of trade and to refuse them too early. One of the most expressed lines of professional traders is adherence to their trading systems during much longer time, rather than at unprofitable traders. All of us it is passable through the periods of losses, without dependence from we adhere to what approach. We cannot increase our chances of success constantly changing the approaches. As number of losing approaches and systems much above number making profit, changing often systems we actually reduce the chances.

The finding of the approach not demanding optimisation and working on the big number of the markets will be the correct decision. For adjustment elimination under a historical material use same corrected for all markets. If you can trade this system in the future during the long period on a considerable quantity of the untied markets you almost for certain will achieve success though it and can be never guaranteed for 100 percent.

The reason on which this approach works consists that though the markets change the short-term patterns, as a whole they remain трендовыми. It that gives you advantage. If you trade trends, in the long-term plan you will be the winner. Attempts constantly to modify your system to adapt to changing patterns in the recent past will not increase your chances of success. Almost for certain you fail.

Human nature is that, that we always try to improve something. I do not try to force not to improve you your systems in the future. Simply do not give задурить itself thoughts that your system became better than that she somehow adapts for constantly varying market. It can be better, if it is profitable for a long time or if trades with profit большее number of the markets.