Cognition Determines Profit and Loss:

The Knowledge System Every Trader Must Build

Many novice traders often "see the right pattern but make the wrong move." For example, they learn strategies like buying on a pullback or entering on a breakout, but the market often doesn’t develop as the textbooks demonstrate: it continues to decline after a pullback or quickly falls back after a breakout. This "conflict between theory and reality" confuses them and even makes them deny everything they have learned.

In fact, the problem is not that technical analysis is ineffective, but that the knowledge system is incomplete. Learning a few patterns does not mean you have mastered the market, nor does it solve the problems encountered in actual trading.

The core of trading is not prediction, but response.

True mature traders never blindly believe in a certain "winning signal." Their advantage lies in their ability to respond: when the market deviates from expectations, they can still adjust their thinking and control risks in a methodical way. In contrast, novices lack systematic cognition and are helpless when the trend does not match their expectations.

To survive in the market, one must have the ability to "adapt to any market condition" rather than expect the market to cooperate with you.

What core knowledge modules does a trader need?

The following six parts constitute your true trading system:

Price Action Recognition: Understanding trends, fluctuations, false breakouts, and other market rhythms.

Structural Analysis Ability: Not only identifying patterns but also understanding the trading intentions behind the structure.

Clear Entry Logic: Knowing why to trade and when to trade, rather than making impulsive decisions.

Strict Risk Control System: Every trade must have a clear stop-loss and take-profit plan.

Trading Psychology Management: Controlling greed and fear, avoiding emotional trading due to gains and losses.

Systematic Execution Ability: Building and adhering to a stable, repeatable trading system.

"Lazy Person's Trading Method" is also a path.

For those who don’t like to frequently judge the market, there is a "rule-based" lazy person’s trading method: you only need to enter the market according to a fixed system, then let the take-profit and stop-loss mechanisms handle the results. No interference, no guessing the market, no entanglement. The key is whether you can endure the system's consecutive stop-losses in the short term

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