IFX: Hello, Yuriy. Congratulations on your victory in the Analyst of the Year contest held by InstaForex together with MT5.com international portal for traders. How do you feel about your victory?
YZ: Thanks a lot for the congratulations. Indeed, the contest is large-scale and captivating for everyone, I mean, for participants, traders, and onlookers. Firstly, the contest allures by its originality: for the time being of the market development I cannot recall an annual contest for the analysts. And I am very happy to be the winner.
IFX: Was it your primary target to win? Or was the participation itself more important for you?
YZ: Initially, I planned to enter the top three of the analysts. When I reached my goal, I analyzed my work more thoroughly and discovered the points to improve. I promoted my blog enriching it with analytical materials and soon it earned great popularity. Then I set another aim – to gain the first position.
IFX: What do you think, how do your analytical reviews differ from the others? Why do you think you manage to be the first?
YZ: Before being an analyst, I have spent years on trading: managed accounts of various individuals and legal entities via Russian and foreign brokers. Now I know pretty well what a trader needs. Above all, a trader requires fresh analytics which is published on time. In case of any delays, a trader gets nervous, refers to another expert which troubles convenient work with the materials of the well-known author. If the delays happen too often, a trader opts for another analyst.
I have ab ovo decided to publish the materials ahead of the others. After a week or two my strategy proved to be successful: the traffic of my web page profile and blog was the highest.
Well, of course some kind of simplicity and cogency of the materials presentation is important. When it was possible, I tried to give simple recommendations, to wit, today the market is going up… And quite often I was right. One of the traders figured out that I had 75% of correct predictions for the entire contest. If I, as the majority of the analysts, gave ambiguous explanations, I would have nothing to stand out.
Moreover, I was consulting traders by Skype and ICQ.
IFX: Yuriy, do you think that the functions of a trader and an analyst are the same? How could you describe a successful trader? What about a successful analyst?
YZ: I believe these are two entirely different notions. To make a prognosis, an analyst spends several hours. Finally, he presents a material that eases a trader’s work even if he can plan his working day by himself. A professional trader can just cast a glance at the forecast to estimate its value. So, is there a need to analyze a market individually if you always have information at hand? A trader just has to wait for the moment to enter the market or stay on hold.
Now let’s imagine the work of traders in investment companies or banks. A trader cannot open a position at his discretion; he sticks with the trading plan of a group of analysts. But a trader must close the position in case the situation changes dramatically. It is not about who is more intelligent, but rather about the sharing of responsibilities.
Based upon my experience, I think that the criteria for being a successful trader or an analyst are different (by the way, I really like this question). A prosperous trader is a bundle of nerves. He must wait for the right open signal to be formed, enter a deal, and then close it. It seems to be so easy, isn’t it? But if a trader has three successive losing trades and he is not affected by them, does not strive to play everything back, then he is a valuable person for an investment company. On the whole, I would define a successful trader by a stable monthly revenue. If the profit is not big, a trader does not risk, but implements the risk management strategy, which proves that he is self-possessed.
The success of an analyst can be defined by the accuracy of his forecasts. Many analysts became famous for their predictions of a crisis end or beginning. Well, it is not success in broad terms, but still popularity. In this case, the success is in stability as well.
IFX: What is the major type of analysis for you and which one is the minor?
YZ: I started out as a technical analyst, later I studied fundamental analysis which increased the accuracy of my analyses in defining the market trends and reversals. Now I prefer complex analysis.
IFX: In your analysis published on InstaForex website you employ your own methods of technical analysis. Do you think the creation of your own indicators and methods of analysis is obligatory? Or maybe it is enough to handle common norms and principles of analysis to trade successfully?
YZ: Yes, it is enough to operate backtested methods of analysis. However, an analyst is creative by his nature. There comes the time when he gets a craving to broaden the horizons and advance his basic system.
IFX: Yuriy, do you think that a trader should have a trading system? Is it useful for decision making or does trading on modern financial markets resemble a random walk? And as for the results, can the success be achieved but with no stable profit?
YZ: A trader must have a trading system. Moreover, until he finds one that suits his psychology and spirit, he is a would-be trader.
My system was developed out of random walk hypothesis. Plot a chart on a piece of paper, and I will show that even a random chart can be described by traditional instruments of technical analysis. The result is fitting: if the trader is not in a hurry, he waits for the moment, then he will earn a stable income.
IFX: How do you imagine your future as a financial analyst? Do you want to learn markets you are not working with now?
YZ: Getting in touch with futures and options markets, I saw how the authors of the books described the instruments that rule the markets, that are groundbreaking. They did not stint on the buzzwords. However, I still stick to the opinion that the currency market is self-sufficient, it is growing in volumes from year to year and it barely changes. I feel comfortable, and now I do not want to try another market.
IFX: Yuriy, could you please tell, an analyst, either technical or fundamental, should trade markets according to his own forecasts? Or maybe the main goal is to provide up-to-date information about further price movements for traders who could make their own decision basing on this information?
YZ: Not obligatory, but a good thing to do. Trading himself, an analyst is more vulnerable to his projections and does not go soft.
IFX: Are you planning to partake in the Analyst of the Year contest once again?
YZ: Not this year again, I guess. Unending consultations during the contest without rest and weekends used me all up. But next year, I will probably struggle again.
IFX: What could you wish to those who have just started trading financial markets?What is the best way to start studying methods of financial analysis, to your mind?
YZ: The only thing I can wish is patience. The path of financial trading is rough and long. And it is better to start it in the classy way. All computer indicators, graphics, and trading methods are based on the principles described in classic books. Having understood them, a trader can master the novelties easier.
IFX: What is your projection for the currency market, say, in the nearest couple of years?
YZ: In the course of a couple of years, I think, nothing will change globally. However, the world is inevitably getting globalized. New supranational currencies will appear and they can greatly affect the market. As a result, new mechanisms of the market regulation can emerge.