Let me first express my opinion: it’s not that frequent trading itself is doomed to fail. By pursuing extreme win rates and accumulating results like building blocks, that can also be a good trading method. What is truly doomed is that kind of completely blind and thoughtless frequent trading, which has neither a plan nor expectations. This behavior is not much different from betting on high or low in a casino. However, frequent trading is generally not recommended. Why? Because the more frequently you trade, the easier it is to go off track.
Our brains have limited capacity to process information, much like how a phone lags when too many apps are open. When you switch back and forth between different instruments and trading directions, decision-making often doesn't rely on pre-established plans but is made impulsively. Many decisions that seem particularly foolish in hindsight occur in this state, fundamentally due to a lack of logical operation.
I once fell victim to frequent trading myself. I can’t say that frequent trading is doomed to fail, but it is true that it is very difficult to be profitable through it. Even though I have been trading for over a decade now and my mindset and finances are relatively stable, if I were to return to the state of frequent trading, I might still be unable to control myself because human nature is hard to overcome.
In the early days of my trading, I could place dozens of orders in a day, non-stop from noon until night, skipping meals and sleep, but trading had to be done.
Later, I looked back and reviewed my state. I think there are two main reasons for my losses:
1. Very high trading costs.
At that time, I was trading dozens of times a day, going in and out, plus I didn't understand the industry, my account was secretly hit with hidden fees and transaction costs. At first, I didn’t notice, but after a month, it ended up being losses on top of losses. Looking back at my trading costs later, I was shocked. Even without hidden fees, frequent trading incurs high transaction costs, which is really not worthwhile.
2. Frequent trading is highly likely to lead to loss of control over your emotions.
I was like that at the time; frequent trading puts you in a state of extreme excitement because trading constantly results in both losses and gains, and the results come quickly, which can be very exhilarating.
Once you get carried away, any so-called technical standards become useless, and you just want to act on your feelings. For example, I used to trade based on 5-minute candlestick trendlines, but after a series of irrational losses, I no longer care about whether the trendline is broken; any technical standard can become a reason for me to enter a trade. I just feel unwilling to accept the losses, so I want to try again, seeing the market drop a bit and thinking it will rebound, quickly making a trade.
The original trading plan becomes useless. You may have set rules for yourself, such as how much position to take and how to add to your positions, but all those rules become invalid. Initially trading 0.5 lots or 1 lot, after losing ten or eight times in a row, you want to quickly recover your losses, so you look for an opportunity that seems good to you and suddenly go in with 10 lots, hoping to recover all previous losses in one go.
As a result, after placing 10 lots, the holding period was extremely exhilarating until the market reversed and I hit my stop loss. I felt like a balloon that had popped, suddenly going soft. In this state of extreme highs and extreme lows, all my energy and spirit were consumed.
In fact, the biggest risk in trading is not the failure of your skills, but the loss of control over human nature.
When you trade frequently, your full attention is on the market, and your emotions can be swept away by it. The market can make you cry, make you laugh, and make you lose control, just like a gambler who is blinded by losses, not stopping until they hit a margin call. This is the power of the market.
So the only way to avoid losing control is to not trade frequently and not to become a slave to the market.
So how should frequent short-term trading be done?
You can engage in short-term trading, but you must control the frequency and maintain a distance from the market.
There is a common phenomenon in trading where beginners prefer short-term trades because they have a high frequency and short holding times, not requiring long waits, which is less of a test of patience. I completely understand this urgent desire to know the results, as human nature is inclined towards quick success.
However, if you really want to do well in trading, you still need to control the frequency to a certain extent. For example, if you are a full-time trader, keep your trading frequency within 10 times a day, sticking to fixed instruments, ensuring you can operate smoothly without feeling flustered. If you are a part-time trader, controlling your trading frequency to 1-2 times a day is sufficient, so you don't have to watch the market all the time and can balance life.
When you maintain a certain distance from the market and trading, you will find that the sky is bluer, the air is sweeter, and you no longer feel suffocated by the market. You will have enough mental capacity to think and maintain rationality.
Additionally, when trading, you must have your own trading rules.
For example, a complete short-term trading system with detailed specifications, clear standards, and strict money management rules allows you to trade frequently while adhering to your own rules. Of course, this also requires strong self-control.
Finally, I want to remind you to pay attention to your trading costs.
I find that many people do not pay attention to this, but sometimes trading costs can cut down most of your profits. Making a profit from trading is already very difficult, and after deducting trading costs, it becomes even harder. So you must pay attention to whether your account has hidden fees and whether the transaction fees are normal.
In conclusion, our purpose in trading is to make money, not to satisfy our addiction to trading. Don't become a slave to your desires.
