Preface
I have been writing about the market all the time, but this week I am going to share some articles about the mindset. I used to be very interested in the body, mind and spirit, and therefore I developed the habit of thinking about the world from a psychological perspective.
Trading is a game that cannot be mastered by a single person. Its rules are simple: buy low and sell high. However, the difficulty lies in facing the fluctuations in the market. How can we survive the repeated destruction and victory?
This is something we have to experience, not just figure out through our heads.
The Disciplined Trader
Books are a shortcut. While reading The Disciplined Trader, I discovered that trading is just like life, with many uncertainties, many losses, and many gains.
In the meantime, establishing our personal trading structure (beliefs), coping strategies (facing losses/partings), and focusing only on the current market mentality after closing a position (living in the present) can all help us live more calmly in the journey of trading (life).
Next, let’s discuss each link one by one to help you quickly read the first half of this book.
Build a deal structure
The chaos of the market is beyond our imagination. Among tens of thousands of traders, each has his or her own life experience, personality, capital volume, learning experience and values, which all affect the moment when we press our fingers.
In this scenario, it is very important to establish our trading structure. By rationally classifying, distinguishing, and analyzing the chaotic environment, we can remove the blinders that block our vision and gradually see the situation in front of us clearly. No matter which school you enter from, choose one to deeply understand, review, and trade, and gradually you will begin to have a vague but important basic understanding of the market.
Facing losses
Always remember: losses are inevitable.
ICT's Huddleston also said that even if he is very good, he will suffer losses sometimes, let alone those of us who are still learning. Since losses are inevitable, how can we adjust our mood?
Personally, I think the easiest way is to set up risk management, for example, only bear a loss of 2% of the total funds on one order.
In human nature, when we can anticipate a possible loss, we will feel less pain if it actually happens - when we can anticipate how much the loss will be, we won't feel such an exaggerated pain when we actually eat bamboo shoots.
Secondly, when facing profits, special attention should be paid to the potential risk of increasing positions.
Greed and death go hand in hand. When faced with the joy of making a profit, it is very important to exit the market while you are ahead (close the position, close half of the position) or at least ensure that you have no risk (move stop loss) depending on the situation.
Focus only on the present
When things have already happened, it is too late to regret. The past order, whether it was to take profits or to stop profit, is a past experience. At this moment, only the total amount of money is real and the fluctuations of the board are real. Cultivate a strong body and mind and focus on the next game.
Conclusion
Having a strong heart is essential for long-term trading. These three points need to remind and guide our brains to think at any time when things happen, while also breaking away from emotional traction and stabilizing ourselves.
Finally, I would like to offer a suggestion for your reference. We all know the power of words - they affect our hearts all the time. If you keep suggesting that you are a "leek" or a "retail investor" for a long time, it will not help your trading growth. You can only rely on your own guidance to avoid going to a place you don't want to go.
In short, good luck everyone!