Victor Niederhoffer's strategy
Many people have achieved success simply because they were in the right place at the right time, they successfully took advantage of the stock market rally and were able to make a fortune from it.
However, not all of them were able to survive the test of the crisis; the quickly earned fortune was lost at no less speed.
It is the ability of a person to work on his mistakes that is the very engine of progress that allows a trader to progress very quickly.
However, if fools learn only from their mistakes, then smart people study the mistakes and advice of more experienced people.
In this article you will learn the basic principles of a strategy that allows you to make money on Forex and other markets.
Tips and trading rules from Victor Niederhoffer
Victor Niederhoffer was one of the most flexible traders who effectively used both technical analysis to make short-term transactions and fundamental investments.
However, you won't find a definitive description of his trading strategy anywhere, other than advice and quotes from his various books. So, let's begin our introduction to Niederhoffer's rules.
1. You can't make money the same way twice
Unlike other traders, Victor Niederhoffer understood perfectly well that market reversals and established trends occur extremely rarely, making it virtually impossible to use the same strategies and the same techniques for market analysis and consistently make money from them.
So he gives great advice to all beginners to use different tools and strategists, but in no case should you expect that the same instrument will allow you to earn money constantly in different markets.
2. Don't trade inactive markets
Profit for any speculator on the Forex market is only possible if the price successfully travels long distances and the market experiences enormous liquidity, making it less susceptible to sudden surges and the influence of large capital.
Therefore, it is very important to avoid low-liquidity, inactive markets, such as exotic currency pairs, if you are trying to apply this to Forex.
3. Don't get attached to your favorite trading assets
Many beginners, as well as experienced traders, are deeply convinced that by studying the behavior of one specific currency pair, finding certain price patterns, and building a strategy based on them, they will earn forever.
In fact, a professional does not have favorite assets, and even if several are developed currency pairs, with which work is carried out continuously at any given time, the efficiency of one instrument may change in favor of the second.
The market is not stable enough to focus on one currency pair all the time.
4. Monday's strong lows are a great way to make money
Viktor Niederhoffer, in the course of his professional trading, noticed a simple pattern in price movements on Monday.
The essence of this pattern is that strong lows that form on Monday, the first day of the trading week, almost always provide excellent support. Contrary to popular belief, the price bounces off these strong lows and resumes its rise.
5. Don't sell assets with strong growth potential
. Stocks, unlike the forex market, can demonstrate multi-year growth, which is virtually impossible to see with other assets.
However, if you've entered the bond, commodity, or futures and see a strong trend and excellent growth prospects, don't risk shorting.
6. Act in concert with central banks.
Many newcomers to the forex market are prone to inventing conspiracy theories against the market and believing that one large player rules the market.
In reality, it's much simpler, as in reality, only central banks, which implement monetary policy by regulating interest rates, can truly influence an asset.
Viktor Niederhoffer suggests thinking like a large banking institution and following their lead in your investment activities.
7. Round levels are potential targets.
You've noticed that all analysts, without exception, always use round numbers as their targets.
The fact is, most traders use these levels in their calculations and either place stops or take profits there. This isn't due to a magical property, but rather to calculation convenience.
8. Buy only the worst-performing assets based on quarterly reports.
The main psychology of a stock speculator is to buy an asset cheap and sell it higher. On the wave of good news and strong quarterly figures, you'll only be able to buy an asset at its peak, which can be fraught with consequences.
At the same time, buying undervalued assets carries a high probability of their growth, as management will simply cope with the difficulties that have arisen.
Biography of the Financier - http://time-forex.com/treyder/viktor-niderhoffer
Book of Viktor Niderhoffer - http://time-forex.com/knigi/univer-birg-spekul
