inner world and what to do for this. The fourth part is presented in chapters 15 and 16: they bring all the information into a single system that allows you to master certain trading skills. With its help, you will become an impartial observer of the behavior of the market. You will be able to determine what you need to limit yourself to and what to do to expand the restrictions to your advantage, but without inflicting psychological trauma.

Expression of gratitude

Probably, most people are well aware that writing a book is not an easy task: here one often cannot even do without the help and support of others. It is to these others that I wish to thank for their helpful contributions, without which my book would not exist at all. Thank you, my parents are John and Helen Yosin; thank you my brothers and sister - Craig, Dean and Sandy Yosin - for your love and support. Thanks to Brad Johnson - my partner at Trading Behavior Dynamics - for all his patience and kindness. Thank you Jim Sutton, Bonnie Marlowe, Jake Bernstein, Elizabeth McKinsey, Michael Headley, Steve Sukenik, and Jack Carl for the friendly encouragement to this work. Thanks to all the traders I have worked with over the past six years, including Jim Griswold, Jerry Stalnecker, Jack Brasswell, Steve Bianucci, Mike Gamble and Chuck Pettet. Thanks for your friendship and support! I am also grateful to Tim Slater for giving me the opportunity to prove myself as a storyteller and writer. I am grateful to Rich Miller for being a good friend and support. Thank you Lori and Nikki Marlowe for the joy you have brought to my life. But most of all I want to say thank you to Kurt Leland - my friend and fellow writer - for all his science and outstretched guiding thread.

PART I Introduction

CHAPTER 1 Why This Book Was Written

From the moment I sat down to the book (it was the summer of 1982), futures trading has measured leaps and bounds in all directions. Completely new exchanges, new contracts have appeared, the number of consulting and information services has grown. The range of books and publications continues to grow, as well as more and more modified technical trading systems; and most of them come with computer programs to make it easier to follow the markets. But with all the tremendous growth in services related to the market, one thing remains inevitable: literally a handful of experienced traders take the lion's share of the market in the market, which is why everyone else loses outright every year.

In futures trading, for every dollar of profit that one trader makes, there is an equivalent dollar of loss for another. If a few traders steadily win big, then the profits come to them only from the pockets of thousands of other traders who regularly fuel the daily profits of the winners. Some of them are well-known people in the community, but for the most part market champions are famous only in Chicago and New York circles. But what and how they do to achieve success is curious, of course, for everyone.

So, there is a tiny minority of winners and an overwhelming majority of losers, with the latter wanting to know the secrets of success. first. Is there really any difference between them? Yes, there is: the one who makes money week after week, month after month and year after year, trades, observing self-discipline. When asked about the secrets of his stable market triumph, such a winner does not hesitate to answer that he could reach such heights only when he learned to control himself and his feelings, and also change his mind to match the market.

Note that self-discipline, control over emotions, and the ability to change your mind after having already decided on something are all psychological issues that have nothing to do with information services, consulting firms, new exchanges, technical or fundamental trading systems (with or without computer programs).

Further, from personal trading experience, observing others and analyzing the market, I understand that, obviously, everyone (winners and losers) goes through almost the same thing. At the very beginning of a trading career or a little later, everyone is discouraged and disappointed, everyone is nervous and suffers from failure. Who are these few lucky people who, having gone through such a stage, make money? These are the ones who figured out what it means to be a trader: they (although not immediately) did not dismiss the difficult psychological moments associated with it, but worked through them. True, even the best of them took years to understand the truth and change themselves.

Let's say self-discipline and control over emotions is really the key to success. But they are not given to a person from birth. Moreover, they are given only with the development of certain psychological skills. In turn, such skills are acquired in the course of learning by trial and error. However, this method is very expensive - both in terms of money and in terms of experiences that usually occur in such cases. But the biggest problem with trading by trial and error is ruin: most people lose everything before they can finish the job.

Of course, some people have enough money to trade further. But they never fully recover from the trauma they inflicted on themselves when they learned how to achieve sustainable market success. Therefore, multiple market champions are few.

What exactly do they do, how exactly, and most importantly, in what order on the way to the peaks that they reach? All great traders (both past and present) find it difficult to answer. True, many will willingly share what they know about the market and its behavior, but they are not always able to describe their own behavior. However, they often warn those who want to learn wisdom from them: no market science and no knowledge in the world will help if you do not cultivate self-discipline and control over emotions. But here's what it is - many find it difficult to say.

Take, for example, the advice "Don't let losses go!". Truly said. It is often cited as an immutable law of trading wisdom. But try to explain to a person what tricks you need to master in order to fulfill it? And if, in addition, you have to trade in a galloping market? After all, he can return, and then the losses will be covered. Consider also that money and prestige are at stake; the return of the market is quite real - and it does not matter if you have to wait a long time. Now you can see for yourself why it is difficult to convince someone that he should "keep the losses going." It is even more difficult to explain how to fit all this into your individual psychology?

The easiest way to interpret this wise advice is this (without really explaining anything): do you want to become a successful trader? Then get used to self-discipline and emotional control. However, such a vague instruction was hardly given deliberately, for at least two reasons. First, self-discipline and emotional control are abstract concepts: they are not easy to grasp or explain. Of course, they are on everyone's lips and are often mentioned in books. But ask someone you know what "self-discipline" or "emotional control" is, and don't be surprised if they give you a puzzled look.

Secondly, today's successful traders took to the market road without a guidebook or map of the area. There were no signs either. And they themselves did not know at what stage (from a psychological point of view) they needed to complete their campaign in order to make a fortune. They followed the path of explorers of the commercial world, learning it through themselves, through self-contemplation and remaking of themselves. All this took a lot of time and effort. They, one might say, hobbled their way, learning from each of their mistakes. Many of their gaffes were petty; but there were also real failures, when they lost both a lot of money and the presence of mind.

Probably at some point they noticed a change in themselves: after all, they no longer suffered from normal market behavior - not angry, nervous, afraid or stressed. Obviously, they partly began to believe in themselves, and therefore kept the load under any market conditions. After all, self-confidence and negative emotions are directly correlated with each other in strength. In general, self-confidence and fear are feelings of a similar nature: only one is with a plus sign, and the other is with a minus sign. If a person feels more and more self-confident, then there is less and less room for confusion, anxiety and fear.

How does confidence develop? Naturally, as one learns to rely on oneself in everything that needs to be done - and without the slightest hesitation. With such self-confidence, he no longer needs to be afraid of the market with its seemingly unpredictable and chaotic behavior. The point here is not about him at all: after all, it was not he who changed, but the trader - his inner world and psychological warehouse. The market has remained the same - as, by the way, the trader's technical tools.

So, a trader develops, going through a transitional period, acquiring new skills through trial and error. But he is unlikely to keep a diary, describing in detail what and how he did - especially if this science was given in torment, anxiety and disappointment. But if you yourself don’t know exactly how you came to your skills, how can you explain it to others?

Consider also that