What is the fundamental logic of trading? It may vary from person to person. The market creates myths of instant wealth every day, but most people only see the glamour and do not understand the survival rules behind it. I believe the fundamental logic of trading is to survive; profit is just a byproduct of survival.
Everyone can think about it: all trading concepts are derived from the logic of survival. Therefore, long-term survival in the market becomes crucial. In simple terms, there are a few points that traders need to pay special attention to.
Understanding the trend is more important than predicting prices.
Many people are obsessed with guessing price movements, but those who truly make money only look at the trend. Trading with the trend is the oxygen for survival, while trading against the trend is the poison for suicide.
Position management is more critical than technical analysis.
True tough individuals only use 20% of their funds to test the waters; they dare to increase their positions only when they have floating profits. The market is not short of opportunities; what is lacking is the ability to survive until the opportunity arises.
Emotions are the arch-enemy of profits.
FOMO chasing highs and FUD cutting losses—these positions I have buried over the years, 99% were lost to emotions. Now my trading desk is always reminded by two questions: During a surge, I ask myself: Why does this money belong to me? During a drop, I ask: Is this asset really going to zero?
Technical indicators are for verification, not for blind faith.
I usually only look at three things when trading: volume, support and resistance, and market structure. The candlestick chart is a game of human nature, and indicators are just tools to help you understand the psychology of the crowd.
The market cycle is the ultimate BOSS.
Making money in a bull market is luck, but surviving in a bear market is a skill. A bear market is a blank check issued by heaven, and how much you fill in depends on how much patience you have built up. When the opportunity arises, you must seize it, provided you are still alive.
Survive, be patient, the market is always there. Spend more time refining your trading system, just to survive.
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