Socrates said, know thyself. The process of clarifying trading boundaries is also a process of knowing oneself. Here are a few of my thoughts on the 'boundaries of trading':
1. The objective boundaries of a trading system are defined by the triangular relationship of win rate, odds, and frequency. The larger the 'efficiency area' supported by the three, the greater the potential of the system. The subjective boundaries, on the other hand, are constrained by the trader's cognition, ability, psychology, and energy— the larger the 'carrying area' expanded by the four, the higher the upper limit of the system that can be managed. Therefore, the essence of an individual trading system is an adaptive framework that dynamically balances the triangular relationship of win rate, odds, and frequency based on one's own four-dimensional carrying boundaries (cognition/ability/psychology/energy).
2. On the path of trading, we are actually committed to the iterative upgrade of a dual boundary system of subjective and objective. From the very beginning, traders continuously expand their cognitive depth, analytical ability, psychological resilience, and energy endurance, striving to approach the triangular optimization of win rate, odds, and frequency. However, the optimization limit of this triangle of objective effectiveness is fundamentally constrained by the individual’s cognitive, ability, psychological, and energy boundaries. Therefore, for the individual, there is no absolute excellent trading system; a system that aligns with one's own four-dimensional boundaries is a good system.
3. Those who learn from me survive; those who imitate me die. One's own self is the most important link in trading. Each person's boundaries in trading cognition, ability, psychology, and energy are different. Therefore, one can learn from others, but must not be dogmatic or mechanically replicate. One must reshape based on their own nature, character, and talents. Only a system that grows from one's own cognition, ability, psychology, and energy is truly vital and has the gene for sustainable evolution.
4. The best state for traders is when the trading system is at the critical position of individual cognition, ability, psychology, and energy boundaries. In this state, profit potential is fully unleashed, while control remains effortless. However, once one crosses the critical point of the four-dimensional boundaries, mastering opportunities becomes laborious. Wanting more beyond one's own boundaries is something one cannot fully master; even if there are occasional gains, they come at the cost of cognitive overload, operational distortion, and mental exhaustion, ultimately leading to backlash.
5. The expansion of trading boundaries must be based on low-risk foundations. Smart friends are good at upgrading and iterating with low-cost trial and error. Specifically, one can verify new strategies with small positions or simulated accounts, continuously observing market feedback, and gradually scaling up only after accumulating significant evidence of positive expected value. This is a process of transforming unknown risks into controllable variables in a gradual manner.
6. The expansion of the boundaries of trading cognition and ability may seem like addition, but in reality, it is a process of first adding and then subtracting. The growth of trading ability begins with the 'addition' expansion at the cognitive level, widely learning knowledge of technical analysis, fundamentals, psychology, risk control, etc., extensively engaging with different theories, strategies, and varieties, and understanding the complexity of the market and human nature through theoretical study and low-cost trial and error practice. However, cognition does not equal ability. The formation of ability must undergo a critical 'subtraction' focus, which means identifying areas that truly align with one's character and advantages, which can generate stable profits, based on practical results and deep self-reflection. This involves actively discarding ineffective or mismatched cognitions, concentrating energy on constructing and optimizing a repeatable, exclusive trading system with clear ability boundaries. This process shifts from 'greedy exploration' to 'restrained focus,' and from pursuing opportunities to defining opportunities. By 'adding' (continuous learning), one maintains cognitive vitality; by 'subtracting' (strictly adhering to boundaries), one ensures execution quality, achieving spiral improvement in ability through dynamic balance.
7. Clarifying boundaries is the foundation of risk control. How many systemic collapses arise from ignorance in unfamiliar fields? How many panic sell-offs begin when positions breach psychological pressure thresholds? How many strategies fail due to mechanical execution under mismatched environments? Allocating funds to areas one does not understand, using leverage beyond one's capacity, and attempting to grasp fluctuations outside of one's cognition are essentially punishments for 'chaotic and unclear boundaries.' To do something inevitably requires establishing a boundary of what not to do. To some extent, the essence of trading discipline is to clarify the boundaries of trading.
8. Opportunities within the system boundaries should be bold, while those outside should be conservative. The common trait of experts is not 'omnipotence' but extreme restraint; they resolutely avoid opportunities they do not understand. Yet, once an opportunity arises, they act decisively and without hesitation. Conversely, if you are conflicted about whether to take a trade or not, then do not take it. This conflicted mindset indicates that your definition of opportunity boundaries is still vague and unclear. True opportunities never require struggle for validation; a system with clear boundaries will naturally issue undeniable action commands.
9. Only with boundaries can there be freedom. The world of trading is full of the temptation of 'infinite possibilities,' but the pursuit of 'no boundaries' can only lead to destruction. A deep understanding and proactive embrace of 'boundedness' is the path to true trading freedom. Accepting one's own limitations in cognition, ability, psychology, and energy is the only way to truly achieve inner peace and calm, rather than anxiety and greed. Socrates said, 'Know thyself.' The process of knowing oneself is the process of clarifying one's own boundaries and limitations. Confucius said, 'Follow your heart's desire without overstepping the bounds.' At this state, one has entered the 'boundary-less realm,' which does not mean the disappearance of boundaries, but rather that boundaries have completely merged and internalized into instinct. Once fully internalized, one is thus completely free to follow their heart.
True freedom has only ever existed above the boundaries of wakefulness. What I mean is not just trading; life is the same.
I am (Military Brother Crypto), deeply engaged in the coin circle for 6 years. Short-term speculation reveals the truth, while medium to long-term layouts are systematic. I accurately capture the best trading opportunities and empower your investment decisions with firsthand information. Choose the right direction and find the right rhythm; here you will find the professional perspective you need.
