The biggest enemy of trading is never the market, but the ambiguity of your cognition. It is like groping in the dark, you never know what you will step on next.
1. The fatal mistake of 90% of traders
Most people turn trading into a "technical patchwork": learn a little about MACD golden cross, memorize a few sentences of wave theory, and try a few breakthrough tactics. This patchwork learning is like assembling a car with different engine parts - it looks complete, but it will never start.
Real trading masters are all "system engineers": they use the first principles to build a trading framework, just like understanding the principles of internal combustion engines before building a car. This principle is the positive expected value system.
2. The Golden Formula of First Principles
Positive expected value = (win rate × average profit) - (loss rate × average loss) > 0
For example:
• Coin flip strategy (50% winning rate): Profitable with odds of 1:1.1
• Trend strategy (40% winning rate): requires odds of 1:1.5 to be cost-effective
• Breakthrough strategy (30% winning rate): must achieve odds of 1:3 or above
3. Three Pillars of Building a System
1. Probability advantage (win rate)
- Large cycle patterns are more reliable (weekly charts are 10 times more reliable than 5-minute charts)
- Trend continuity exists (like Newton's first law, trends in motion tend to continue)
- The principle of chip precipitation (the support level formed in 3 months is much stronger than that formed in 3 days)
2. Odds Advantage
- The odds of the main rising wave are naturally high (intervene at the end of the callback, and the profit and loss ratio is easily 1:3)
- Volatility expansion opportunities (Triangle Convergence breakout is like a compressed spring)
- Large-scale fluctuation space (daily level stop loss 50 points, profit often reaches 200 points+)
3. Execution Advantage
- Consistency (a strategy that is mathematically proven to hold on to during a drawdown)
- Position control (positions roll like a snowball when profitable, and shrink like an electric shock when losing)
- Mechanical execution (making transactions into "assembly line operations")
4. Thinking Code of Top Traders
• Don't ask "Is this indicator inaccurate?", ask "What is the mathematical expectation of this strategy?"
• Stop loss is not a risk control method, but a necessary cost for profit (like paying rent for opening a store)
• A truly good strategy can be calculated on paper to ensure profitability
• People who have the right understanding don’t need to “maintain discipline” at all - can you “maintain” your breathing?
5. Two key steps to break the deadlock
1. Construction phase (using mathematical thinking):
Ask yourself three questions:
① Can the long-term winning rate of this strategy be calculated?
② Is the average profit-loss ratio greater than 1:1?
③ Will a black swan event cause my account to go bankrupt?
2. Execution stage (using philosophical thinking):
Remember two sentences:
• "Probability advantages need time to ferment" (just like good wine needs aging)
• "The result of a single transaction is meaningless" (the casino never cares about winning or losing a single round)
Finally, a message to all traders: the moment you use mathematics to prove that your strategy is effective, trading changes from gambling to engineering. The market is always changing, but mathematical truth is eternal - this is the most powerful confidence given to us by the first principle.
BTC
The daily report gives the view of 108950, but it is still bearish! The market is moving slowly, but those who follow the daily report are on the road to profitability! The current H1 fell below 106500, forming a structural destruction, short-term support 105200-104600, rebound 107200-107800 still pay attention to the distribution opportunity! The target below is 103000-102000! At the same time, pay attention to the opportunity to absorb and buy here!
ETH
Ether is still waiting to be plundered! Following the big cake, rebound to 2440-2470, but continue to test the lower edge, and fall below to see 2313-2270! At the same time, pay attention to the opportunity to absorb and buy here!
SUN
The daily report gave a plundering position of 156-158, which arrived as expected! After that, it fell back to make a profit! The current H1 structure is destroyed, and the rebound is 149-150. However, it will continue to go down, and the target below is 142-137!
The information and data involved in the content are derived from publicly available materials, and we strive to be accurate and reliable, but we do not guarantee the accuracy and completeness of the information. The content does not constitute any investment advice, and you are responsible for your investment based on it!