Trade Analogy

Trying to develop skills in new areas, people often think of analogies. The analogy can be used to integrate new information with old. By analogy, it is concluded that, if two or more things are similar in some respect, they will be similar in other respects. There is a very human tendency to use previously acquired skills in teaching the new one. Easier to understand a new topic, if it can be attributed to the already studied. This is especially true in trading. Trading in the markets – a difficult lesson, and it is easier to learn, if we associate it with familiar themes: that is, we can easily understand trading, thinking of analogies. We represent many analogies to trading: Trading is like Sport; technical analysis – the art; merchants – intuitive scientists or trade similar to surfing.

Thinking analogy helps to understand the trading, but it is important to remember that this method is used only as a guide. Not confuse analogy with the real facts, you are trying to understand. Trading may be like some activity, but it is after all very different. Let's look at some common analogy trading and estimate what their similarities and differences. Science: Scientists develop hypotheses about the general laws of nature, collects data and checks the validity of these hypotheses. Traders are also developing a hypothesis about the markets. They are trying to measure market sentiment, predict that the market will do, and test their hypotheses in the transactions, watching what was happening. But scientists have conducted research to find the fundamental laws that are repeated.

Scientists tried to study the markets, but with little success. Unfortunately, the markets are too random and chaotic. It is important to remember that. Markets are not as predictable, as required by science, so do not pretend that we can do a lot of accurate predictions. Do not fight for predictability. Assume that markets are unpredictable. Activities: Trading in many respects similar sports. Professional athletes are awarded for being extremely well-developed abilities. Trade also requires a well-developed skills. Trader trains, ready to 'play' on the market when he sees an opportunity. Trade in many respects similar to the sport, but it requires a knowledge of trade practices. And the markets are a little less predictable for compared with what could make the other team or the opponent. Artist: Art is often difficult to understand. Have you ever seen a modern art? It is hard to see what makes it art. But it is. All this – the question of context. Observation models graphics, which indicate the possibility of trade – art. In assessing the graphics in the right context you can see and feel the model, which can lead to big rewards. But the trading – not quite art. Useful to have an artistic flair, but traders should be accurate in their interpretations of the market, or they will not make a profit. Businessman: Many traders talk about the need to consider trade as a business. Businessmen are very punctual when it comes to planning, equipment, or sale of goods. But they usually have either a good idea or what the audience needs. Supply and demand in the market a little more complicated. Sometimes the fundamental forces of supply and demand have little to do with movements in prices, this is important to remember in trading. Analogies can be helpful when trying to understand the trade, but remember, the analogy – just an analogy. Trading may sound similar to the activities that you already know, but it also may be very different.

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