Today, I want to share with you 7 trading techniques and insights. These details are also what I adhere to in my daily routine, hoping to provide you with help!
1. Check the market after trading halts.
Many of us retail investors are non-professional traders without a complete trading system, and our psychological state is not very stable, making us susceptible to market fluctuations.
When we are monitoring the market, our attention is fully focused on minor fluctuations, and even the slightest pullback can make us feel tense. At this point, our actions can become erratic; we might close positions early on markets we initially favored, or impulsively enter positions on markets we have not studied, getting stuck.
When looking back after the market halts, it feels as if I were possessed by a ghost, trading in a confused manner.
Therefore, I suggest that those with poor self-control should reduce the frequency of checking the market, or even refrain from looking at it.
My own habit is to check the market after the close because it doesn't involve the current market fluctuations and won't affect my mood, allowing me to rationally execute my trading plan.
When the stock price falls to a low, enter when the price tests support and forms a reversal candlestick; after the price falls and forms a new reversal candlestick, increase your position. After entering, use the previous high as the target for profit-taking.
2. Use limit orders more, and market orders less.
Using limit orders is the method I use most in trading. It mainly serves two purposes: one is to reduce impulsive trading, and the other is to obtain better execution prices.
When you use limit orders in trading, once you place your orders, you don't need to keep staring at the market. You only need to occasionally check if the orders have been executed. When placing limit orders, you can also set stop-loss and take-profit orders simultaneously, which saves a lot of energy.
Many people like to stare at the market while trading, crying out when they lose a little and becoming anxious when they gain a little, making daily trading feel like a battle, sweating a lot.
In this mental state, it is impossible to trade well. Therefore, I often say that you should maintain a certain distance from the market. Physically, this means reducing the time and frequency of staring at the market, allowing your mindset to remain stable, which is more conducive to making objective judgments.
Moreover, limit orders usually enter after market pullbacks, which gives a better entry price in practical trading than market orders.
Do not underestimate the price advantage of entering with limit orders; better entry prices can lead to quicker profits, enabling traders to gain psychological advantages faster, and can expand the risk-reward ratio, which is very helpful for subsequent trade execution.
Although this is a very small detail, after years of practice, it has proven beneficial. Our success is built upon many tiny details.
3. When holding a profitable position, use technical pullbacks for short-term trades.
Most trends operate in a manner of oscillating upward or downward. During the oscillating retracement, profits on positions will decrease, and at this time, our psychological pressure will be significant, worrying whether the market will reverse or if we should continue holding positions. This is when we can use technical pullbacks to make reverse short orders.
For example, when holding a profitable long position, near the resistance level of the market, combine it with the candlestick patterns to make a short position. After entering the short position, if the market retraces, the short position becomes profitable, while the long position's profit decreases, but the overall profit won't shrink significantly. After the market retraces near the turning point of the second launch, close the short position and continue to hold the long position.
Doing this can help relieve psychological pressure during fluctuations, and it can also increase profits.
4. Be an independent trader.
Trading is a very serious and personal matter.
The money in our accounts is earned by our hard work, not picked up from the ground; we must be responsible for every penny.
Many people, when feeling uncertain about something, habitually seek help from others or discuss with them to gain a sense of validation, which helps them to be more certain in their decisions. However, this is a very taboo thing in trading.
Because each person has different judgments about direction, entry and exit points, position sizes, and indicators and cycles used, everyone has their own standards. Once discussions occur, insecurities in human nature will be triggered, leading to doubts about one's trading strategy, ultimately resulting in losses in trading.
(In the Crowd) contains a statement that says: when a person enters a group, their intelligence significantly declines. To gain a sense of belonging, individuals are willing to abandon their sense of right and wrong, exchanging intelligence for a sense of security.
Therefore, when we trade, we should avoid falling into this mental trap. Try to find a relatively quiet environment where you can think independently, complete your strategy development, testing, and adjustments, and finally execute it independently.
As for the feeling of loneliness, it is certainly present, but in the face of making money, this slight feeling of loneliness is insignificant. Once you achieve true profitability, you will understand.
5. Govern without action.
Today I came across the following passage, which resonated deeply! Successful trading is actually about not trading!
We might consider it from a Buddhist perspective: If I were blind, then marrying Xi Shi and Dong Shi would make no difference at all.
If I were deaf, then it would not matter whether you praise or scold me. If I lost my sense of smell, it would not matter if I were in a toilet or surrounded by flowers.
If I were to die, it would make no difference whether my corpse was eaten by dogs or given a grand burial.
People are troubled, emotionally volatile, and torn between love and hate because of their deluded minds making distinctions! It is because of the mind's distinctions that concepts like good and evil, beauty and ugliness, right and wrong arise. Everyone knows that what is beautiful is beautiful, and that evil is also so.
Your attachment to love gives rise to greed; when greed is unmet, it leads to entanglement between love and hate. The cycle of greed and obsession repeats, continuously drawn by karma, ultimately attracting countless good and evil results, all of which will manifest without exception, leading to your destiny, which becomes predetermined, all circulating within cause and effect.
Thus, governing all things, the ability of the eyes, ears, nose, tongue, body, and mind to perceive colors, sounds, scents, tastes, and touch is due to the wonderful use of the mind. The mind perceives all things and responds to them but is never tainted or directly grasps anything, so the mind is inherently satisfied and can give rise to all phenomena.
The essence of cultivation is to have a clear mind. How to clarify? When you have no distinctions and are unaware of both ends, you should have no attachments; then the Bodhi mind will naturally manifest.
Similarly, how to trade? When you have no trades in mind, you can naturally ride through the bull markets!
