- Understanding the truth of the system
Trading is a game of probability. Imagine we’re flipping a coin, I win a dollar on the front and you win a dollar on the back. It’s simple. The positive side and the negative side take up half of the time, and none of us can win. However, without my knowledge, you changed a coin with lead. For every 100 tosses, there are 49 on the front and 51 on the back.
You now have a license to print money. Let’s call it the reverse trading system. All you need to do is sit back and always be on the opposite side. In the end, you will win all my money（ It’s the same for anyone else.)
All trading systems give you a favorable “bias” – something more likely to happen, no matter what trading system you use. Let’s see: form breakthrough, trend following, Fibo series, moving average, channel following, oscillation signal, brinelling line, swing index, opening gap… Does it include your system? You’re relying on a certain bias. Essentially, the trading system is saying, “when ‘x’ happens… ‘y’ usually follows.”. Sometimes not, though most of the time. And all the trading systems do is to help you identify high probability opportunities, correctly build positions, protect your funds, and keep your profits increasing.
Some systems are better than others, but don’t be obsessed with searching for the perfect system – as the mysterious hand of the market (the obscure Holy Grail) does – to generate profits at your request and never make mistakes“
Find a trading system that you like, one that you feel comfortable with, one that you understand. Then use it with persistence, be sure to persist. A calm, disciplined trader would choose a normal system and use it to make money. A nervous and paranoid trader will choose a “perfect” system and lose money
All traders have “good” days and “bad” days. Some days you make a small profit, others you will suffer a small loss. Generally speaking, one or two days a month, you will make a lot of profits. As a trader, that’s what you should make, not nine to five. The problem is, you never know when the big deal will come. As we mentioned above, “reverse trading system” (win more than lose only once!), Maybe the deal you didn’t adopt is just a win, and the market will never give you a chance to regret it. You have to look further and realize that the current deal is just one in a series. In this way, the current transaction is not important, it is like a drop of water in the sea.
The whole point of trading is to manage risk and then obey the oldest law in the universe: probability. - Controlling investment is the way to long-term success
As a trader, the biggest mistake you can make is to invest too much money in one trade. The more you put in, the more emotional pressure you have, which may eventually crush you. What’s more, the emotional damage is hard to repair.
Most of the new traders build up big positions and hope to get rich overnight. Experienced traders know more. In the short-term trading, in and out very fast, many transactions, a few big losses will soon eat up your capital. A good short-term trader who can survive will only invest a very small proportion of his capital in any transaction. If you don’t have much capital, the preferred trading system should have a very close stop loss. Also consider looking at short-term charts, such as 1-5 minute charts, so that losses can be minimized.
Overconfidence can cause huge risks“ Hi, the positive side has been out for 10 times in a row. Let’s bet half of our funds on the negative side (this is confirmed below) and make a bet. “
The problem with this “certainty” trade is that:
1) The market has little to do with how to go;
2) Other people also think that they are certain and actively involved, so when they make mistakes, they aggravate the mistakes (such as more somersaults, more somersaults).
If you take a small proportion of risk in each transaction, you will be more relaxed and the transaction can be handled better. - How to control emotions
Does your subconscious mind want to lose money?
It’s easy to see self destructive behavior in the market, especially among day traders. When the price is dancing around in front of your eyes, it will hold you tightly. You start to feel like it’s teasing you.
That’s why you have to be very, very careful to avoid emotional trading. If your blood is boiling and it may explode at any time, you will have the worst and most serious experience in the market.
Don’t bring emotions into the trade. Remember that the current deal is just one of a series of long trading experiences. With this in mind, don’t invest too much in any deal.
You must think of yourself as a professional trader. At the beginning of each trading day, before the market opens, give yourself a few minutes. Close your eyes and observe the market in imagination, as if you can see the real-time chart on your computer screen, the price is spinning up and down
Watch yourself enter the trade. Notice that you feel relaxed. You’re alert, but calm, completely unemotional. Observe how the price changes after you enter and how it approaches your stop.
You’ve lost money in your trading. Notice that you’ve seen a lot of trading scenes. You’re not emotional. Completely calm. You start another deal. This time I made money. Once again, you’re relieved. These are all part of the deal.
It takes practice, and you have to do it often to benefit. Any time you start to feel nervous and unable to concentrate, you can practice.
The advantage of this technology is that it’s free and you’ll benefit a lot.
