During trading, it seems that the market will bite you back at any time, but don’t forget that emotions are also used by humans as weapons of self-harm.
Ask yourself a question: when the market is at a high point, do you feel overwhelmed and want to turn long? If you continue to be bearish at this time, it is already a "psychological struggle" problem, which is difficult to analyze objectively.
At this point, you must know one thing: other people will also think that the price has fallen so much that there is no need to sell it lower. This is the "general opinion". You must know that having this idea is "human nature" but not "correct".
The desire to turn bullish is often driven by psychology, not technical factors. It is really painful after a big drop. After a big drop, what do you think about the future market? The technical side is undoubtedly "bearish". After falling all the way, I know that my psychology has become "paralyzed" due to bearishness. This is a torment.
However, the road to trading is lonely. You cannot be too influenced by others. You must completely isolate yourself from the market. You can only rely on yourself for success, but this is also the charm of trading.
Operation and guessing the market are two different things. I have repeatedly emphasized that there is a difference between "going long because you are bullish" and "going long because you should go long". Many people operate by judging whether the market will go up or down in the future, and then they build positions and wait. If the market does not go according to their own ideas, they will panic. If they do not cut at the beginning, they will end up losing money or suffer huge losses later.
Objectively speaking, insisting on what the market will do is just our wishful thinking. The market does not care how we analyze it, not to mention that the market situation is often changing rapidly. In many aspects of operation, one must put aside one's own (and of course others') views on the market.
Stop when you should stop loss, and don't hesitate when you should close and keep your profit. "Many mechanical operations cannot give themselves any excuses", and you can't bet on the market because you "insist on what will happen", which is not operation but leaving your fate to God.
There is a motto in trading that everyone follows: "As long as I hold on to my position, it's not a real loss." But this is like letting your internal organs bleed and choosing not to go to the doctor. The same principle applies to the following sentence: "As long as I don't go to the doctor, others won't know that I'm dying."
But believe me, once you die, people will find out the truth sooner or later. Each of us must know that our operation is to establish a "winning mode". When you deviate from this stable winning mode, you are gambling and are doomed to fail.
It is not easy to make breakthroughs in psychological problems. You must know your chances of winning in order to have confidence.
I was squeezed before, so I will hesitate to make a move next time. This is a normal and natural reaction. The biggest emotional reaction problem in trading is worry - because I am too afraid of losing money, because I didn’t enter the market, because...
At the moment when you are about to establish a position, many inexplicable and weird thoughts often come out. Suddenly you think of a certain loss a few days ago, or an idea that you would never think of at ordinary times. Will it happen as soon as you buy it? earthquake?
Everyone has worries, but you have to overcome them on your own through learning. Once a successful operating model is established, the next step is execution. Without execution, everything is empty talk.
In fact, the difficulty of market operation lies in the psychological aspect. For example, if you plan to buy at a low position, if you hold the position all the way down, you must wait for the turning signal to appear before you can take action. However, usually during the process, your psychological aspect will ask you to take profits quickly, and at this time you must endure the "pain".
The road to trading is a road of learning. For everyone, failure is almost always caused by oneself. Since you want to survive in this market, you have to change your life frequency to follow the market. Few people are born to belong to the market, so to succeed, you must change - change all the wrong concepts and habits in the past, and continue to practice the correct behavior until it becomes your habit. Emotions will make people chase ups and downs, so you have to control it.
“Human nature doesn’t want people to easily admit losses, so you have to get used to the feeling of ‘accepting losses’”. Human nature also doesn’t want people to give up realized book profits, so you must overcome the idea of “short-sightedness and quick profit in human nature”.
Doing the right thing in the market will almost always bring pain. People's choice must be to stay away from pain, but staying away from pain also means staying away from success, so it is destined that the successful people must be a minority. Reflection will also bring pain, because it is tantamount to admitting that you were a failure in the past, so people will continue to make the same mistakes.
The market doesn't care about your ideas at all. What's the problem? It's because you are not a blank slate. You have too many subjective ideas. These normal ideas in life are correct in your daily life, but they are often wrong in the market... Because life and the market are two different worlds, they have no intersection.
"When speaking, they seem to understand, but when faced with situations, they are confused" is a very vivid saying in Buddhist practice for those who cannot practice both understanding and practice. It means that when the truth is spoken, they seem to understand and understand it clearly, but when the situation or specific matters come, they completely forget the truth they once understood, do not know what to do, and lose their focus and perseverance.
"It seems like enlightenment when speaking", many people focus on the understanding of technology, position management or strategy; "Confused by the situation", many people do not consciously cultivate their "firm execution" of what they know before and have no or no control over the subject's consciousness and behavior when executing them.
In financial transactions, facing the ups and downs of money, the ups and downs of the market, most traders lose their trading plans or rules, have nothing to rely on, and begin to unconsciously fall into random trading. Therefore, there are many famous sayings on Wall Street that talk about these phenomena, and many people are also studying trading psychology. "Plan your trades, trade your plans" is also a typical saying.
In fact, the discussion about trading mentality is an old topic. Friends who have had some trading experience should understand the impact of trading mentality on the "success or failure" of trading.
At first, many novice traders regard trading skills as the key to trading success or failure when they enter the market. However, after a period of trading, they will find that due to many reasons of their own, they have no way to implement trading discipline (of course, many people attribute this to the fact that they have not found the master key to the trading world, so it is inevitable that some people will fall into the vicious circle of looking for the master key. We will not make too many comments on such traders here). Many friends have also asked me how to establish a good trading mentality.
So let’s talk about how to develop a good trading mindset.
First, let’s analyze where a good trading mentality comes from. Many people will be curious, why does a mature trader remain unmoved in the face of changes in money? Have they reached the point where the six sense organs are pure? What's more, some people deify this kind of trading state and think that such traders are like eminent monks. In fact, this kind of trader's state is very easy to achieve. You need to do the following:
First: You need to close all your current losing positions that do not conform to your trading system. The reason is simple. We have a tendency to protect ourselves. When we are "harmed" by the outside world and we cannot change the status quo, we create a fantasy scenario to "protect" ourselves from psychological suffering. This is also the fundamental reason why many novice traders do not stop losses.
Second: You need to change your current trading logic. Of course, this trading logic can also be called trading thinking. When it comes to thinking, everyone should understand that when we encounter a specific event, we need to evaluate the event through our own thinking mode and then take actual action.
That is to say, before we make a transaction, we will have our own trading thinking to analyze it. Many people like to use gambling to illustrate trading, so let’s use gambling as an example.
Next, there are two ways of gambling for you to choose. The first is to gamble with the money you win, and the second is to gamble with borrowed money. I think no one will choose the latter. But when it comes to trading, people don’t think so. In fact, many mistakes made in trading cannot stand up to scrutiny in reality, and can be completely negated by some very simple and obvious principles.
So how do you change your trading logic? "That is to simplify your own thoughts!" Think less about those things that you have no say over, and do less things that deceive yourself, and be a trader with open eyes.
Third: Forget your "dream" before entering the market. In fact, it is not so much a dream as a fantasy. When you really enter and gain some insights into trading, perhaps all your dreams will be "shattered" and the market will overturn all your fantasies and superficial understandings.
The only hope for survival in the market is to honestly respect the market, perform simple mechanical operations, and not have any illusions about the rise and fall of the market. Please remember that it is survival, not anything else. The market leaves us with nothing but rules.
Of course, mentality is only one aspect of the subject. You also need to control the subject's combination of scrutiny of the market, funds, and trading plans, as well as the strength of its execution. It is not enough to just have psychological endurance or not be tempted.
Self-control is the first condition for profitable trading and is also an ability to carry out trading behavior. Without self-control, no matter how skilled you are or how good your capital management is, you will inevitably leave the market in pain.
In trading, it may be impossible to always be rational, but you can ask yourself every time to examine whether your trading action is part of the plan and what results it will bring; how should I deal with floating losses or floating profits; whether I should trade frequently, whether I really want to take a heavy risk, whether I should enter or leave the market at this time, and you should think carefully before taking action.
You can't trade randomly and involuntarily. Over time, you will naturally be more cautious about your actions.
Self-control is the key to trading, and it is also the most important watershed that distinguishes gambling from trading. Because of self-control, many times, you don’t let luck do the trading for you. It is an internal force to execute your trading plan. Without it, you can do nothing.
If you are still not good at self-control, it is best to learn trading psychology or philosophy. But after learning, you still have to execute consciously and purposefully.
In fact, there is only one reason why you cannot execute in a transaction, that is, you have not clearly understood the importance of trading discipline. To truly gain such understanding, you can only gain some experience in actual trading after repeated failures. Only when you have smoothed out your own edges and corners, perhaps you can trade honestly.
I will stop here for today. Finally, let me say that in order to have a stable trading mentality, this can only be achieved if there is a profitable number in your trading account. Any losing numbers will make you take self-protective actions. The only way to have a profitable account is to follow iron trading discipline. To follow iron trading discipline, you need to understand the nature of a trading market.
In the end, trading is done with the brain. The key to execution lies in your trading mindset. Trading actions are just appearances. If your trading mindset changes, the execution of trading rules will be a natural thing, and trading will become a happy thing. Will you still be troubled by not being able to execute your trading plan? Will you still have ups and downs in your trading mentality? Then will you still fight against your own psychology? #内容挖矿 #JUP #交易员
