Light positions, stop-loss, execution. Use any indicators carelessly, determine it to a single K-line, and ensure losses do not exceed this line. If right, protect a bit of profit; if there's a big gain, consider exiting. Following moving averages is fine. If wrong, just stop-loss. Prepare mentally and financially for consecutive stop-losses in the dozens. Trading steadily and profitably is surprisingly simple, unbelievably easy.
I use a single moving average system, trying small positions to profit and then increase my position. I made 40 times in gold within a month; there wasn't a big trend during this time, but there was a trend every minute. For gold over the past few weeks, as long as the daily line had similar candlesticks, I could make money. However, this week, with consecutive daily dojis and long fluctuations in one and five-minute charts, I stopped out 40 to 50 times, losing everything back. It was a sight too painful to bear. After an hour of despair, I took a nap, had a shower, and thought it over. It’s okay because I know where my system fails. I only pursue the risk-reward ratio; increasing positions on profits led to heavy positions. Even after losing 40 times, I firmly executed my system. I know it's a problem with my system, not my execution. Previously, I lost money due to execution; this time, it’s due to the system. My system can make money, but increasing positions on profits turned small gains into losses. While increasing positions made me multiply my money by 40 times in a month, it also caused me to lose everything.
I can improve my win rate while sticking to executing the system. I understand the principles and intent of the system but am stubbornly attached to its execution, overlooking the essence of the system. The system is not just for execution; it is to restrain oneself from making mistakes, to limit losses, expand profits, and avoid blind trading and emotional trading.
As long as I can hold light positions, set stop-losses, and let profits run, any technique can be used. In order to execute the system, I stubbornly held on to long positions, knowing it was highly likely to drop, and continued to operate when there was no trend, clearly knowing there would be big opportunities but still giving up. It’s like a skilled martial artist fighting, knowing they could defeat their opponent in three punches or kicks, yet insisting on following a routine: first performing the White Crane Spreads Its Wings, then the Wild Horse Parts Its Mane, and finally executing the Diamond Reverse Drill. This is like a trading system becoming a burden.
A trading system is a boat to cross a river; after crossing, carrying the boat becomes a burden and disaster.
This week, I am going to restart with the little money I have left. I do not want to replicate the process of previous profits and aggressive positions anymore. I also do not want to keep staring at the screen for 48 hours executing the so-called system for fear of missing a big trend. How many times have I walked out of the studio, tired, with the morning sun shining on me, hurriedly returning home to wash up before rushing back to the studio, teetering on the edge of life and death, experiencing significant drawdowns followed by large profits? I don’t want to live those days anymore. I might create a miracle of sudden wealth, but I do not want to take that path.
For someone like me, who trades wholeheartedly and relies on it for life, I can no longer let my life be subjected to such back-and-forth shocks.
Starting next week, trade casually—divergence, overbought and oversold, market feel—can all be entry signals. The risk of a candlestick line means after placing an order, I should read or take a walk. For stop-loss, let it go, and for profits, protect a bit and let it run. Under the premise of ensuring survival, with limited drawdown, an occasional wave will naturally elevate me to the next level. Although it may be slow, I don’t know the outcome. But I know I will no longer endure such huge fluctuations, nor will I pursue any myths. I will still have a system, but it will no longer be a rigid system.
Let's rehash the upcoming trading ideas:
Currently fluctuating, use RSI for high selling and low buying.
Currently, in an upward trend, go long on a bullish signal after a pullback.
Currently, in a downward trend, go short on a bearish signal after a rebound.
Continuous small losses and break-even, waiting for a lucky big fluctuation.
How much loss is one's own ability; how much profit is left to the market, left to fate. One cannot struggle against fate.
My trading core is to bet on the rise and fall of a key line; if wrong, I lose one line, if right, I gain as much as possible.
I just realized these days that trading seems quite simple, simpler than eating and sleeping.