Ninja Trading

Without any doubt, when it actually comes to investing money, the majority of individuals are certainly going to agree that the profit is nearly all the time foreseeable when an individual make his or her investments in some kind of modern market. In fact, a big part of individuals are definitely going to follow that quite wise and smart piece of advice that is given and that clearly states that every time when it is possible you need to take your advantage or benefit of the 401k plan when you really can.

Well, some individuals actually used to truly believe that their mutual funds definitely were some safe and secure alternative for investing within, specifically ten years ago. However, along with their very growing popularity was also their peak of performance that now has surely seen the astounding and amazing shortage of success. For sure, a big number of individuals after really holding all their investments from their mutual funds have obviously selected investing within the numerous different areas of the modern stock market. However, they actually become quite confused with what stock exactly to invest in.

But still for those individuals that obviously don’t have these 401k plans and also are very much discourage for trying stock or mutual funds and they are searching for some other kinds of investments for placing their additional funds into. they are definitely able to rest really assured that choosing the forex trading methods is quite popular and widespread alternative if to compare with some traditional and common investment methods.

In fact, those forex trading methods actually give a big number of various opportunities for gaining a good profit according to the fact that the modern forex market is truly global one that has certainly been opened up thus enabling all retail traders for selling and buying through their retail brokers.

And so utilizing these forex trading methods for trading within the modern forex market definitely has a big number of advantages and benefits if it is put side by side with common and traditional methods. And the most important and essential, the most beneficial and advantageous aspect of this modern forex market is the fact that the forex trader actually doesn’t need to browse through a huge amount of different and various investment kinds. Well, that’s all due to the fact that there is just the limited amount of foreign currencies for trading.

In fact, a big number of forex traders just opt to trade within only one foreign currency out of those four large currencies that are obviously traded within this kind of modern market. Besides, every market at forex certainly provides some certain and sufficient instability for presenting numerous trading prospects every day.

It is vital to gather as much knowledge about currency exchange market as possible. Because this info will help you not to lose much money on Forex trading or Forex investment.

Surely not a single piece of knowledge can be rock solid guarantee against losses, especially on Forex market, but sometimes even one Forex books can save you much money.

So, finishing the discussion of essence of terms “management of money funds” and “risk management”, and also the technologies based on these concepts, we want to return to a question on that how much new and revolution is this paradigm. All stated above, in our opinion, allows telling that behind terms discussed in the series of articles the area for a long time known in the mathematician under the name of the theory of decision making disappears.

This area, besides already considered has still set of “pearls” and “brilliants” which can and already decorate concrete examples of use the applied finance. In this sense we again agree with R. Johns and we confirm that owing to abundance of various algorithms in an arsenal of the theory of decision making to speak about a method of application of its “double” (management of money funds) inconveniently.

For each market tool, horizon of investment, this or that market and the invested volume of money funds different models should be also applied. From the most interesting it makes sense to mention cognitivety cards, buying networks, the theory of dim sets and the expectations theory which is applicable when the economic environment can’t be characterized probabilities (decision making in the conditions of complete uncertainty).

Very interesting is the direction considering at construction of forecasts of the future prices not only the information of the dynamic nature (historical numbers of the prices, indexes, indicators, macroeconomic variables), but also the news information is represented to us. It has essentially other character, having the discrete nature (it is based on events). Its reception, the analysis and embedding in the dynamic forecast demand already absolutely other mathematical tools (text processing).

Coming back to terminological “dualism” (management of money funds – the decision making theory), are forced to state that it, apparently, is ineradicable in those areas of human activity in which natural-scientific methods start to be implemented promptly.

Main thus is not the name (well also that that in economy the variability measure is called volatility), and a correctness in use of concepts which is not attracting a distortion of meaning or attributing of false senses. It, unfortunately, quite often happens with the concepts coming on Wednesday of traders from the exact sciences. And that such distortions quite often happen are consecrated by authority of great traders of the West does inaccurate use of concepts extremely dangerous (that there are entered recently terms “a fractal upwards” or “a fractal downwards”!).

Finish reasoning on terminology and terminological mess it would be desirable to appeal: it is more than algorithms and models for trading in life, but only effective and different! We consider as effective algorithms such which not simply give to the user correct advice more often, than others, and specify, how much more often, also state an estimation of probability of those or other events.

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What arsenal of tools which the technology risk of management in struggle against risk possesses? It is necessary to tell that this arsenal is great enough and isn’t limited to confidential intervals widely known from statistics which characterize uncertainty of various statistical estimations. The last can specify probability from which, for example, the real price will get to this or that interval of values. And the more precisely we want to learn the future, a big price to us it is necessary to pay for it.

Growth of required probability of hit expands interval in which there will be a required value. Moreover, such estimation speaks nothing about frequency of occurrence of different values in interval. The entire interval is characterized by one number – probability of hit of value in it. Such interval risk assessment is integrated to one more complexity inherent to many economic processes, in particular, to a price movement of exchange assets.

This complexity carries the special name – a problem of “thick tails”, – by which the fact of difference of distribution of probabilities of values of the prices from the normal distribution law is designated. The word “problem” has appeared in the name not casually as ignoring of “thick tails” can lead to unexpectedly big losses. Researches of last years have shown that in a market price movement of assets the big deviations from average value meet more often, than it follows from the normal distribution law.

For the problem resolution of “thick tails” it is necessary to be able to predict the future distribution of probabilities, instead of to postulate it as normal. Such ability allows correctly, from the point of view of risk accounting, to place trading signals, to form the insurance capital and, as consequence, to manage dynamics of the capital (account). Whether It is possible, and how much difficult to implement procedure of construction of the forecast of the future distribution of probability of values of the price?

For the answer we will remind that even restoration of function of density of probability on the historical data is uneasy task. It is known two methods of its decision – idle time, and more often wrong and inexact, and more exact (under condition of availability of the data), but also more difficult and seldom accessible to the trader.

Histogram method

The first method consists in construction of the histogram distribution and is based on splitting of interval variation of researched variable into cells. It is called name bins, and the quantity of hits in them values of a researched variable gives size of a corresponding column of the histogram. The histogram method comprises danger inexact and even at all incorrect estimation of distribution. Danger is based on an inadequate choice of quantity or width of bins on an interval variation of a researched variable, for example, the prices. At smaller, than it is necessary, quantity of bins important features of distribution can be hidden, and at their too big number the prices of a detail “not existing” in real dynamics can be formed.

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This article is devoted hardly probable to the most important for traders question – how from correct elementary steps to “combine” stable and profitable system of trade. In a science the discipline answering such questions is called the decision making theory. Traders had a terminology – money management and set of other terms which have appeared in exchange dictionaries rather recently.

Risk management

New terms

In previous articles we have told about problems of market forecasting and methods of an asset choice for stock market game. We have shown that the modern mathematics can essentially facilitate life to the trader. We will assume that these two elementary steps are carried out truly: accuracy of the forecast is sufficient, and assets get out effectively. How to construct a building of stable and effective strategy of stock market trade? Practice shows that only about elementary steps it is not enough knowledge for long and happy exchange life.

Occurrence of new terms became reflection of this fact also. Among them frequently used modern word combinations – money management (management of money funds) and risk management (a risk management, risk management) are. Still two years ago we had to hear from our traders stories freezing blood about wonderful disposal of risk of loss of the means invested to America by means of technology of management monetary means – money management.

The question is natural – whether something disappears almost useful behind all these fashionable terms? If yes, in what utility consists and how to use it? The history when intensively coming to us because of ocean modern terms on closer examination appeared well and for a long time known “slices” from the various scientific disciplines, only in a new fashion stuck together will repeat.

And sometimes they have been well adjusted to each other and gave, accordingly, excellent result. Sometimes the coordination of old parts in new “packaging” was not so successful, as determined useless result of their use.

Terms concern what case “management of money funds” and “risk management” and how they are connected with each other?

Five corner stones

If to tell about practical use of the knowledge, standing up for the term “management of money funds” first of all it is necessary to answer some question. The main things from them are the following: what for, where, when, as. What technology is necessary? Where it to apply? When its use is necessary? How it to apply?

For the answer to the first question it is reversible to R. Johns’s book published in 1999 and devoted technology of management of money funds. The author answers a question on necessity of its use: “… In investment and exchange trading there is no other such knowledge without which it is possible so quickly” to burn “any account, as technology of management of money funds”. With it all is clear – major of arts for us at stock market trade is the given technology. On a question on where it is applicable, the answer is given so settling however also useless – the technology is applicable everywhere.

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Well, have you actually ever heard of those quite successful forex traders? In fact, we generally consider these hidden secret trading strategies and also long years of their experience. However, the real and actual reason is their efforts and hard work for putting into true succeeding. And so as all forex beginners you need to remember that trading is definitely some very exciting experience for learning and for all professionals and experts it is a big amount of efforts and hard work for doing.

Without any doubt, in the modern trading market is it quite important and essential for noting that you are surely able to fall into some certain traps and they actually lead you to some important and essential losses as well. Besides, you may be obviously asking how exactly does one person really manage to trade on the forex market gaining good and big profits? For sure, the main answer actually lies in this possibility of so called forex managed accounts.

In fact, the modern foreign exchange market are clearly offering a big number of various advantages and benefits, particularly at the moment when it actually comes to gaining goos and big profits. Well, just as well, when you are obviously not so experienced at forex trading, then you are really able to quite well just end up losing all the things. And that’s exactly why you need some professional and expert for handling your own forex account and also trading and truly become very successful. And so when you actually have your work but you do not have that necessary time for spending to learn all the secrets of the forex trading, then having the account is just right and proper for you.

In fact, that account which is certainly managed by the experts and professionals is surely represented in some mew way to this kind of market; besides, without this necessity of spending your time that you are not able to afford to waste sitting in front of your personal computer or laptop. Well, you even might think about those profits that are actually derived from your forex accounts as the passive profits.

For sure, big and great profits are definitely much easier and simpler for achieving if they are actually managed just by the best experts and professionals who are truly aware of how particularly to play with your real money and they also have all the necessary knowledge that is required. Moreover, it is necessary for you to comprehend that this modern market trading generally is quite risky sort of business.

In fact, it also requires the cold analysis and the basic learning. Moreover, it is also going to require you that company which is specialized in the forex trading.

It is important to gather as much information about currency exchange market as possible. Because this knowledge will help you not to lose much money on Forex trading or Forex investment.

Surely not a single piece of knowledge can be a 100% guarantee against losses, especially on Forex market, but sometimes even one Forex books can be of big service to you.

In fact, the Forex Autopilot by Marcus Leary is a kind of software system which actually lets the consumers to really trade on the modern foreign exchange market in the mechanical manner which definitely eliminates several of those cognitive biases which certainly lead to the bad and incorrect financial decisions. Well, all hunches, guesswork, emotional investments and also all other human mistakes are surely not able to effect that trading plan. And even in these situations where the modern market is clearly trading downwards, this Forex Autopilot trading system is truly able to follow all financial trends in the real time, thus letting it to really managed money of each forex trader in that way in where some certain profit is nearly all the time generated.

For sure, it is quite important and essential for all forex traders to really understand this fact that any trading system is actually not guaranteed for providing a good profit on each transaction which is clearly made. However, what particularly this trading program can do is generate consistently a good profit over time. In fact, all forex traders need to view it as some sort of the program which actually lets them to really make much better financial decisions. And that is surely going to let them to truly achieve great success on the modern foreign exchange market, thus increasing their current level of income as well as also their current trading skills.

Without any doubt, this trading system is actually made for advise forex traders as to when exactly to make their trades and with which currency particularly. Well, it obviously follows that algorithm which lets it to truly predict with very surprising and amazing accuracy when exactly it is just the most profitable to purchase some currency, and when also that risk of holding on to this currency actually becomes too much excessive. In fact, that literature which certainly comes with this software surely explains to the buyers how exactly to set up this trading software in that manner which really gives them just the best results.

For sure, all forex traders need to understand that this Forex Autopilot trading system is not that kind of program which can obviously be plugged in and utilized right away. And so all consumers should truly familiarize themselves with this trading product and also become very accustomed to how particularly it actually works before they are able to get started. Besides, it can surely take some period of time for the forex traders to really familiarized themselves with this trading program. That’s why it is so important and essential to read the necessary literature in all details till the moment when it is understood completely.

It is vital to gather as much information about currency exchange market as possible. Because this knowledge will help you not to lose much money on Forex trading or Forex investment.

Surely not a single piece of knowledge can be rock solid guarantee against losses, in particular on Forex market, but sometimes even one Forex books can save you much money.