Hello everyone, I am Awen. Today, we will delve into a topic that has kept countless traders awake at night and even led them to leave the market in dismay—frequent trading. In the trading market, there is a saying: 'Frequent trading leads to death,' which has almost become an ironclad rule in the trading community. But is this really the case? What is the true logic behind it?
First, I want to throw out my core point: what truly leads you to the abyss is not frequent trading itself, but the completely blind and unplanned core behind it. As a trader, if you act frequently without careful consideration, clear trading plans, and expectations, relying merely on feelings and impulses, then this behavior is no different from walking into a casino with your eyes covered and betting. Therefore, what we really need to discuss is not the frequency of trading but the quality behind each operation.
Many friends may ask, 'I understand the reasoning, but why does my hand have a mind of its own in the market, and I can't control it?' This actually reveals one of the core contradictions in trading: trading is inherently counterintuitive. Our brains naturally dislike uncertainty, crave a sense of control, and harbor a deep fear of missing out on opportunities. This fear is known as 'fear of missing out' (FOMO). When market conditions fluctuate, this instinctive response is magnified infinitely. Greed drives us to chase high prices at all costs when the market is booming, fearing we will miss the next breakout; while fear can cause panic and lead us to cut losses in the darkest moments before dawn. This oscillation between fear and greed is the root cause of irrational decision-making.
In addition, our brain's ability to process information is limited. Imagine your computer has dozens of applications open at the same time; it naturally becomes sluggish or even crashes. Trading is the same. When you switch back and forth between different assets, time frames, and long/short directions, your brain has long been overwhelmed. In this high-pressure state, the decisions you make are often not based on the well-thought-out plans made before the market opened, but merely on impulses that arise spontaneously. Those operations that seem extremely foolish after the fact almost always occur in this state of cognitive overload. This behavior is essentially a habit common among retail traders: they tend to cling to the results they have imagined while completely ignoring control over the process. They have no clear operational rules, do not know what they are waiting for, and just want to try as long as they have a feeling. Such behavior is one of the most fatal mistakes in trading.
So how can we escape the quagmire of frequent trading? I believe the first thing to change is our fundamental understanding of trading. Those around me who can survive long-term in the trading market and do well share a common trait: they understand how to 'do nothing' in trading. This is like an experienced hunter going after a fierce beast; most of his time is spent observing the wind direction, looking for tracks, and studying the habits of prey. The moment he pulls the trigger may only come once in a day or even a few days. Only when he is certain he can strike with certainty and has prepared for various unexpected situations will he decisively take action. The same principle applies to trading. The market is filled with noise and traps most of the time, and those truly worthwhile high-probability opportunities may only occur once or twice a day for each asset. New traders often fear missing out on every little movement, resulting in repeated torment in various bad market conditions, exhausting their capital and energy. Therefore, learning to wait is the first lesson a trader must master to transition from novice to maturity, and it is the most important lesson. Waiting is not just a passive inaction; it is a strategy filled with wisdom.
Here, I would like to share a few very practical operational suggestions, hoping to help you start building your trading rhythm.
First, set physical limits for yourself and clearly tell yourself that the market does not need you online 24 hours a day. You can set a hard rule for yourself, such as a maximum of three trades per day, and once done, immediately turn off the trading software and shut down the computer. At first, you may feel the urge to trade, but once you get through this phase, you will be surprised to discover that the vast majority of market fluctuations are just traps designed to entice you into making mistakes.
Secondly, find the market rhythm that belongs exclusively to you. Everyone has different personalities, and the trading styles that suit them vary widely. Some friends are impatient and act decisively, so they may be suitable for chasing gains in clear trends. So when the market is caught in a tense and fluctuating situation, is it necessary to keep consuming energy watching the market? Of course not. Recognizing your own style and only taking action in market environments that suit your style is key to improving your win rate and reducing ineffective trades.
Finally, observe and feel the market completely. Newcomers might ask, 'Isn't it enough to look at the K-line for the market? What does feeling mean?' Feeling means completely experiencing the ups and downs of trends—such as a trend starting to ending, and then a new trend forming, with breakouts, pullbacks, accelerations, and fluctuations in between. When you have fully felt all the market movements, you will truly understand why you are waiting at this position, and you will clearly know what you are waiting for in the market. Only then, when real opportunities arise, can your actions flow smoothly like a stream. This is precisely what the saying means: 'Only with enough effort can your efforts appear effortless.' So even if you spend several weeks or even months observing each wave of movements of an asset, this process may seem slow, but it allows every step you take to be on the right path, which is the most efficient learning path.
After we have initially controlled the impulse for blind trading through the methods mentioned above, we need to further enhance our trading mindset and specific operations. One very effective method is to enlarge your trading cycle. Many traders are addicted to minute-level charts, trying to capture every tiny fluctuation, only to be drowned in the market's noise. When you switch from minutes to hours or even days, and then observe the market, you will find that the whole world becomes ten times clearer. Many fluctuations that seem alarming in smaller cycles are merely insignificant ripples in a larger picture. When you learn to view hourly fluctuations from a daily perspective, many irrelevant anxieties and impulses will naturally dissipate.
Secondly, learn to conduct self-examination before placing an order and buckle your trading seatbelt. Whenever you are about to click the mouse to place an order, in addition to following your trading plan and logic, it might be worthwhile to ask yourself one last question: 'What reason do I have right now to not trade?' This question forces you to review the opportunity in front of you one last time and helps you view this trading opportunity more rationally.
Last but most importantly, always prioritize risk management. What is the truth of trading? I believe the truth of trading is: only those who can afford to lose are the long-term winners. Many traders hate losses, trying everything to hold onto their positions, unwilling to admit their mistakes, until their accounts suffer unbearable losses and they are forced to exit. This is the fastest way to go bankrupt. As trading master Jesse Livermore emphasized, setting clear exit points when entering the market and strictly enforcing stop-losses is the lifeline for controlling losses and protecting capital. Accepting reasonable and planned losses is part of doing business in trading and a prerequisite for your success.
In short, frequent trading itself is not a sin. What true trading masters pursue is not the quantity of operations, but the quality of each action. The path of trading is a long practice, practicing the mind and refining the nature. It is not a confrontation with the market, but a reconciliation with one's own inner greed and fear. When you can look at the market's turbulent waves while keeping your mind calm; when you can calmly give up ten blurry temptations just to wait for that moment of clarity, you can be considered to have truly understood the craft of trading. The market is never short of opportunities, and it is also never short of those who get cut. I hope today's sharing can give you a deeper understanding of trading. Slow trading is fast; only stability can lead to longevity. Thank you for watching, and I look forward to witnessing each other's growth on the trading path. See you next time. Finally, for friends who haven't followed or subscribed yet, please help to follow and subscribe. Your support is my motivation to continue making better videos. I am Awen, thank you for watching, and see you next time.
