In these years of trading, I have gone through the phase from looking at the market all day in the fear of missing a market trend to trade occasionally nowadays. I have found that the essence of trading is to follow the market. Every order we make must be in line with the trend in the market in order to profit. Therefore, instead of trying to predict the market, it is better to learn to follow the market.
After experiencing the golden bull market in 2011 and the stock prosperity from the second half of 2014 to the first half of 2015, I too once felt complacent, thinking that I can predict and even has grasped the trend of the market. But now when I think of it, I have just realized Lei Jun's famous quote: even a pig can fly if it’s standing on the trend.
A big trend like this cannot be predicted. If lucky enough, I would rather be the pig standing on the trend every day. More often, when we trade, we are faced with the kind of tortuous market that has very small twists and turns. So it is crucial for traders to know how to make money in these minor trend markets.
Trading is like fighting a fight where few leaders go all-in without any previous contact battles. Trading is like a war and the biggest problem is to solve the information asymmetry. And nothing is better fit for the source of information than small-scale contact and conflicts.
Trading and war are somewhat similar. The former is composed of money, and the latter is composed of people. Like the law of physics, 1 + 1 is less than 2 in most cases and may be less than 1 in some cases. Whether it’s trading or war, you must find the Key, and reduce the angle between the forces in order to maximize the efficiency of capital or individual soldiers.
Without enough contact and temptation, you will never know where that Key is. Therefore, in repeated temptations, each of them will be very cautious in playing their cards and never put in enough capital or power without seeing an evident target. Only when the true strengths and intentions of the two parties are understood, will everyone choose a practical method to trade or crossfire.
No matter trading or fighting, people will not rush to go all-in at the very beginning, because that means to lose your future chips and opportunities in a large chance. Therefore, when trading, you must reach a preliminary understanding at the early stage and do it small phase by phase. For war, it is to achieve staged goals. To double your profit every week and turn your motorcycle into a automobile soon is something that happens only in the imagination.
For advanced trading, you have to be clear on the following points:
1. Perfect trading is very hard
To grasp the daily market well, you must have great courage. When you feel that you can open a position, open a large single position. When you feel that the market trend is going a wrong direction, stop the loss immediately.
Often when the market news is released, the price rises most at the top and falls most at the bottom. That is why the market atmosphere is so important. If the news is bullish, but the price didn’t rise and you insist on your original plans and wouldn’t let go, then very often you end up with losing profitable orders. Cases like this are very common in the market.
For example, some traders want to fish the bottom. When the phased bottom construction is about to be completed, many traders want to find the next bottom while buying. However, large institutions or large capital will definitely not let the real significance of the bottom appear quickly, or there will still be downward fluctuations, or there might be a sudden bottom after a false breakthrough, so that those bottom-fishing traders are constantly anxious and even give up their original goals over time.
2. Make plans, and carry it out
If you have a clear trading plan and can strictly implement it, you can prevent the influence of your emotions, which can be the biggest enemy to trading. You should remain rational and focused during the frenetic time period.
To ensure this, traders need to take various countermeasures before trading. In the market of trends, false breakthroughs and fluctuations, you must have your own coping strategies. In the face of possible black swans, leave a little more space for trading points, profit margins and stop loss points and try to place closing positions and stop losses in a controlled range.
3. Do not regret over your trading
If you want to grasp trading, you can't regret over profiting less or losing more than you could have after closing a deal. When you are trading based on the ideas that you think is reliable, then do not regret over your decisions. Do things as planned again. If the previous departure proves wrong, then what you do afterwards is to learn from the previous experience and know that we all make mistakes.
#Tradingpsychology#Lessons learned in a timely manner are to avoid making the same mistakes in the future. Otherwise, our principal will be compromised, and it will restrict our future trading. This is to make sure you are not affected by emotions in the future.
How to do it? Try not to worry about your entry price all the time. Once entering the market, you are giving the ruling power to the market, which is irrelevant to your expectations. If you feel that the market trend is not the same as your prediction, don't calculate how much more you lose before closing the position. Instead, you should act immediately. If you are always concerned about the profit and loss, you will lose more.
4. Trading is not everything of your life
For many traders, once they start trading, it becomes the only thing in their life. Whether they are eating, shopping, or going to bed, they constantly think about trading. Since you have chosen to trade, of course it is impossible not to care about it. But trading is a game of probabilities, the more you operate, the more likely you might do it wrong. Rather than be tormented in trading, it is better to cultivate some hobbies, such as gardening, sports, cooking, and spending time with friends or travelling.
After you manage your daily life well, and develop many hobbies, and come back to look at the market when you are energetic and focused, maybe you can spot a good entering opportunity for a certain type.
Conclusion
Trading needs opportunities. It is certainly not possible for traders to create opportunities. Instead, everything we can do is to wait. A qualified trader never make presumptions of the market trend, but place good entry point, profit and stop-loss positions based on market trend, his or her own fund situation and trading style.
Before the right timing, he/she would spend time doing things unrelated to trading such as having fun with friends or focusing on other work. And when the time comes, he/she will enter the market and leave everything for the market to make judgments.
إخلاء المسؤولية: الآراء الواردة هنا تعبر فقط عن رأي الكاتب، ولا تمثل الموقف الرسمي لـ Followme. لا تتحمل Followme مسؤولية دقة أو اكتمال أو موثوقية المعلومات المُقدمة، ولا تتحمل مسؤولية أي إجراءات تُتخذ بناءً على المحتوى، ما لم يُنص على ذلك صراحةً كتابيًا.
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