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 will not find such a definite description of a trading strategy anywhere, with the exception of advice and quotes from his various books. And so, let's start getting acquainted with Niederhoffer's rules.
1. You can’t make money the same way twice.
Victor Niederhoffer, unlike other traders, understood perfectly well that market reversals and established trends appear extremely rarely, so it is almost impossible to use the same strategies and the same techniques to analyze the market and constantly make money on it.
Therefore, he gives great advice to all beginners to use different tools and strategists, but in no case does he hope that the same instrument will allow you to constantly earn money on different markets.
2. Don't trade inactive markets
Profit for any speculator in the Forex market is possible only if the price successfully travels long distances and there is enormous liquidity in the market, which in turn makes it less susceptible to sudden jumps and the influence of large capital.
Therefore, it is very important to avoid weakly liquid inactive markets, such as exotic currency pairs, if you try this on Forex.
3. Don’t get attached to your favorite trading assets
Many beginners and even experienced traders are deeply confident that by studying the habits of one specific currency pair, finding some price patterns on it and building a strategy based on them, they will earn forever.
In fact, a professional does not have favorite assets, and even if he develops several currency pairs, with which work is carried out constantly at any given time, the effectiveness of one tool may change in favor of the second.
The market is not stable enough to focus on one currency pair all the time.
4. Strong Monday lows are a great way to make money.
Victor Niederhoffer, in the process of his professional trading, noticed a simple pattern of price movement on Monday.
The essence of this pattern is that strong lows that form on Monday, the first day of the trading week, almost always become excellent support.
The price, contrary to what most people think, bounces off strong lows and resumes growth. 5. Do not sell assets that have great growth potential.
Shares, and unlike the foreign exchange market, can demonstrate multi-year growth, which is practically impossible to see with other assets.
However, if you are in the bond, commodity or futures and see a good trend and excellent prospects for growth, do not take the risk of going short.
6. Work with Central Banks
Many newcomers to the foreign exchange market tend to come up with conspiracy theories against the market, as well as thoughts that the market is ruled by one big player.
In fact, everything is much simpler, because in reality, only central banks that are engaged in monetary policy by regulating the interest rate can truly influence the asset.
Victor Niederhoffer suggests thinking like a large banking institution and following it in your investment activities.
7. Round levels are potential targets
You noticed that all analysts, without exception, always give round level values as their targets.
The fact is that most traders use these levels in their calculations and place either stops there or take profits.
This is not caused by a magical property, but most likely by convenience in calculations. 8. Buy only the worst assets based on quarterly reports
The main psychology of a stock speculator is to buy an asset cheaply and sell it at a higher price.
On the wave of good news and good quarterly results, you can only buy an asset at the peak of its value, which is fraught with consequences. At the same time, when purchasing undervalued assets, there is a high probability of their growth due to the fact that management will simply cope with the difficulties that arise.
Biography of the Financier - http://time-forex.com/treyder/viktor-niderhoffer
Book of Viktor Niderhoffer - http://time-forex.com/knigi/univer-birg-spekul