To make stable profits in trading, there are several necessary conditions:

1. Stable trading system

2. Stable trading mentality

3. Stable trading behavior

You can read another article "Conditions for Stable Profitable Trading" for a description. Simply put, to achieve stable profits, you must achieve stability in the other three aspects.

But in fact, most people can’t even keep their accounts from losing money, and their accounts are often liquidated, let alone stable profits.

Why can't you make money from trading? There are many reasons. I will list some common misunderstandings that traders tend to fall into from the perspective of trading cognition, and then look at the concepts that should be possessed. Thoughts affect behavior, and cognitive bias is the underlying reason.

1. Too much superstition about technology

Some people put too much effort into learning trading theory and technology, and study hard, forgetting that they come to the market to make money rather than to do research.

Profitability requires a systematic solution that involves many aspects, not just technology. Moreover, trading technology does not contribute much to trading profitability.

To give a simple example, ignoring funds and mentality, if you decide the long and short entry directions in the market based on tossing a coin infinitely, the final winning rate will definitely be close to 50%.

Then add stop loss and take profit conditions on this basis, with a profit and loss ratio of 2:1. According to this trading logic, the result will not be too bad.

Can you achieve 100% accuracy by focusing on predicting market trends and improving your single win rate? Even if you achieve 80% accuracy, it will still be difficult to make money without position management, risk management, and mentality management.

I recommend everyone to read "Turtle Trading Methods" and experience the role of technology in profitable trading through real cases.

Never be superstitious about technology.

2. Frequently change transaction logic

Some people have been trading for many years, but still don’t understand how to make money from the market. They learn from each teacher for a period of time and try each trading method for a period of time. They keep changing and changing, but they still can’t get a firm conclusion.

In fact, you can find various trading systems by simply searching on the Internet. If you want to try them, you can try different ones every day.

But is it the system or the people who are not making money? The Turtle Trading Method tells us that the same trading strategy can produce very different results when executed by different people.

Every time, I haven't fully understood how to use the system, haven't executed the trading actions, haven't had a long enough backtest or real trading to experience the trading rhythm. I just use it for a short time to see if the system can make money. If it doesn't make money, I will change it. If I use this idea to trade, I am afraid that all the trading systems in the world will not make money even if I try them.

On the other hand, even if an expert gives him a very bad trading system, he can still make a profit.

Trading is an internal skill.

3. Too much focus on the profit and loss of a single transaction

So what kind of money do you make by using a trading system to make profits in the market? It should be the money of probability.

For example, if you make 100 transactions in a year, 50 of them are profitable and 50 are loss-making. The maximum loss of the loss part is 100 US dollars per transaction due to the stop loss setting, and the maximum profit of the profit part is 200 US dollars per transaction due to the profit-loss ratio of 2:1. Then the income for the year is 200*50-100*50=5000 US dollars.

Under this premise, a transaction is only a part of the 100 transactions and does not play a decisive role in the overall or long-term profitability. This is a concept that a systematic trader should have.

Being too focused on the profit or loss of a single transaction means that you are placing too many orders and there is a gambling element involved.

4. Imagination: I am a good trader

Many people trade based on intuition, but few make money based on intuition. Most people are too lazy to think, too lazy to persist, too lazy to review, and just fantasize that they can make money, but in reality they lose more and more.

In trading, you must understand that slow is fast and be a "foolish person" who follows the steps. You must strictly implement the trading system without being lazy or making compromises. Only then can you slowly sum up experience from each loss, and adjust the rhythm from long-term actual combat to maximize the original effect of the system.

Do simple things repeatedly, and do the repetitive things with your heart, and you will succeed.

5. Don’t believe that the system can help you make stable profits

The role of the system is to regulate traders' trading actions, reduce unnecessary thinking and misoperation, and achieve accurate buying and selling within the rules, thereby maximizing the effectiveness of the trading strategy.

Of course, you can make money without a system, but from the perspective of knowledge structure, it depends on the knowledge points scattered in the minds of traders. The trading system is the sublimation of the trader's trading skills and is an SOP that can guide yourself and others in trading.

Therefore, at a certain stage of advancement, traders will become interested in systems and start looking for systems, imitating systems, and building systems on their own, and eventually become excellent system executors.

The execution system should never be understood as rigid, but rather as a method to assist oneself in practicing the baseline of trading skills.