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Overcoming Trading Psychology Challenges - Let's Share Strategies and Support Each Other!

warren

Hey fellow traders, Trading psychology is often the unsung hero or villain in our trading journeys. It's not just about analyzing charts and making decisions; it's also about managing emotions, discipline, and mental resilience. So, I thought it would be a great idea to start a discussion here on our subreddit to share our experiences, strategies, and support each other in overcoming the psychological challenges of trading. We all know that emotions like fear, greed, and impatience can wreak havoc on our trading decisions. But we also know that they can be managed and even harnessed for our benefit. So, whether you're a newbie or a seasoned trader, let's open up the floor to discuss: Dealing with Losses: How do you cope with losing trades? Do you have specific strategies or routines that help you bounce back mentally? Maintaining Discipline: Sticking to a trading plan can be tough. What techniques do you use to stay disciplined, even when the market is highly volatile? Managing Fear and Greed: Fear and greed can be two of the biggest obstacles in trading. How do you keep these emotions in check and make rational decisions? Psychological Tools: Are there any specific psychological tools or exercises you use to improve your trading mindset? Share your favorites! Support Networks: Do you have a trading buddy or a mentor who helps you stay on track? How important is a support system in trading? Mental Resilience: Trading can be emotionally taxing. How do you build mental resilience to cope with the ups and downs? Your Success Stories: Share your personal trading psychology success stories. What did you learn from them, and how can others benefit from your experiences? Remember, we're here to support and learn from each other, so let's keep the discussion respectful and constructive. Your insights might just be what someone else needs to read to turn their trading psychology around. Trading is a journey, and conquering the psychological aspect is often the key to success. So, let's unite as a community, share our knowledge, and help each other become more psychologically resilient and profitable traders. What are your thoughts and experiences with trading psychology? Share them below, and let's build a supportive trading community right here on trading.live 💪📈💡

Warren's Trading Titans

Stop loss is the bait you use to fish in the financial market

jiaoyi golden eagle

Today I will talk to you about the cliché topic of stop loss. The reason why I want to talk about this topic is that I found that many foreign exchange friends do not attach importance to stop loss, or do not understand its importance. We often see that after a transaction has a loss and stops the loss, the market develops in the direction we expected before. If there is no stop loss before, not only will not lose money but also make money, so many people are unwilling to stop the loss. Think that stop loss is the root cause of account loss, so stop loss is rejected. This creates a misunderstanding of stop loss. The above situation is actually not a problem of stop loss, but a problem of wrong judgment of entry position, or it may be a problem of inappropriate stop loss position. So, if we want to have a correct understanding of stop loss, we must first clarify what is stop loss? What is the function of stop loss? Stop loss is a means of risk control, that is, when you analyze, judge and take action on the market, but it is proved to be wrong by the market, or when your entry basis is destroyed, admit your mistake and accept it. Loss, and limit the loss to a smaller range, so as to avoid greater losses and endanger the safety of the total funds. That is to say, stop loss is a protective measure, which is equivalent to a "safety valve". Its function is to protect the total funds of the account. When unexpected situations occur and losses occur, you can withdraw in time. Even after the exit, the market develops in the expected direction again, there is no way to do it. Because no one can predict what will happen in the future, all we can do is to analyze, judge, and then make decisions based on all the information we can collect at the moment . For example, in the stock market, after many people buy stocks and make losses, they adopt an ostrich policy, and then the stocks are held for five, ten, or even longer periods of time. This not only reduces the efficiency of the use of funds, but more dangerously exposes these funds to the risk of losing everything. Or some people choose to "cut the meat" when they really can't bear the protracted suffering after suffering a large loss. These are actually the results of no initial stop loss measures. And even the master of value investing, Buffett, will take stop loss measures after making a wrong judgment. At the end of February this year, Buffett increased his holdings of aviation stocks, and then affected by the epidemic, when the stock price plummeted by nearly half in early April, he decisively cleared his positions. Because the basis for him to continue to hold positions no longer exists. This is true in the stock market, not to mention the highly leveraged margin market and futures market? Stop loss is even more significant in a highly leveraged market, because under the effect of high leverage, the risk is proportionally magnified. Therefore, stop loss is a very necessary and important measure you take to reduce risks when the market is facing unexpected conditions. Many people think that trading is buying and selling, which is a very simple matter. But in fact, trading is definitely a science, not a simple and easy thing. Because trading is what allows us to fight against the human instincts contained in the genes of human evolution over millions of years-greed and fear! The difficulty of this can be imagined. So don't take it lightly, but attach great importance to it; and don't fall into the kind of "tactical diligence, strategic laziness". What does that mean? That is to say, it is not enough to study diligently every day (not to mention those who do not even study diligently), but also to plan the "transaction" at the strategic level. We come to this market to trade, to put it bluntly, it is all to make money. But we must first ensure that we can "live" in the market, that is, not liquidate (not go bankrupt), or minimize the probability of liquidation; and then make money. (The non-exploitation mentioned here means that all the funds you can use in trading will not be lost.) So how can you ensure that you don't liquidate your position and "live" in this market forever? Let's talk about how we plan at the strategic level, achieve the purpose of risk control at the level of fund management, and minimize the probability of liquidation. Mathematicians and many traders have done in-depth research on liquidation risk (bankruptcy risk), which is the basis of money management. The purpose of fund management is to reduce the risk of liquidation, and there are three variables that affect liquidation: 1. Winning rate; the winning rate of the trading system. 2. Profit-loss ratio (return rate); the profit-loss ratio of the trading system, or the rate of return. 3. Risk percentage (stop loss percentage); the risk of each transaction accounts for the percentage of total funds, or stop loss percentage. Trading technology systems can address the first two factors, while money management can control the third factor. When the win rate or profit-loss ratio increases, the risk of liquidation decreases; and the greater the risk percentage per transaction, the greater the risk of liquidation. The following quotes two bankruptcy risk tables for comparison and explanation. The algorithms they adopt are consistent. The first one is the data obtained from 100,000 computer simulation tests, and the second is the data obtained from 1,000 computer simulation tests. The first one cites the bankruptcy risk table from Bennett A. McDowell's "A Trader's Money Management System": The second cites the bankruptcy risk table from Tushar Chand's "Beyond Technical Analysis": From these two tables, it can be seen that under the assumption of the same win rate and profit-loss ratio, the higher the risk percentage of a single transaction, the higher the risk of liquidation. And if we want to reduce the probability of liquidation as much as possible, we must reduce it to 0, so it is recommended that you control the risk percentage (that is, the stop loss percentage) of each transaction at about 2% of the total funds, so that you In order to "live" in this market as long as possible. Then use this stop loss amount to divide by the stop loss spread to calculate the trading volume (position) for each entry. Of course, if your trading technology system is very powerful, not only has a high winning rate, but also a high profit-loss ratio, then you can appropriately increase the risk percentage. And if you don’t have a complete trading technology system and you can’t know your stable winning rate and profit-loss ratio, then you should be more cautious and adopt a stop loss percentage of 1.5%, or even 1%, so as to be more secure . Doing trading is playing a game of probability, so if you want to do a good job in trading, you must have a little mathematical thinking, and the study of fund management is about numbers and probability. From the mathematical principles, let us live as long as possible in this market. In fact, we can regard the stop loss as the cost of the transaction, and the profit-loss ratio is - how much cost are you willing to pay for each transaction to make a profit , of course, the larger the ratio, the better. As the Tao Te Ching says: "If you take what you want, you must give it." If you want something, you have to give something first. If you compare trading to fishing, then stop loss is your bait for fishing in the financial market . Obviously, using an earthworm to catch a carp is a cost-effective thing; but if you want to catch a carp and use a bear paw as bait, it can only be said that ordinary people in the world of "local tyrants" cannot understand...... The truth is understood, so how should we usually do a good job of stop loss ? First, formulate admission principles. That is to clarify your entry conditions, and use your method to clarify what happens in the market before entering the market. The clearer the better, formulate them into principles. Secondly, the stop loss position must be determined before entering the market. Before you enter the market, you must first assume that when the market triggers your entry conditions, you will enter the market at what price. When this condition is broken, that place is the stop loss position. For example, the trend line technical system is to enter the market with a line, and the stop loss is set outside the trend line. The specific stop loss position should be set reasonably according to the technology you use. Then divide the 2% stop loss amount mentioned above by the price difference between the entry position and the stop loss position to calculate the position and formulate a trading plan. Finally, strictly follow the trading plan. When the entry condition is triggered, immediately enter the transaction, and directly set the stop loss position and strictly implement it. Only by doing a good job of stopping losses and controlling risks well can we "live" in this market for a long time, and then pursue technical improvement, and then making money is a natural thing. So what if you know the truth, but you still can’t do it? That can only persuade you to leave the market. This place is not a place where the weak can survive. This is a place where the strong prey on the weak and the fittest survive; or you should try to change yourself and make yourself a strong one!

Jiaoyi Golden Eagle Exchange Circle

The essence of trading

山城老刁民

(1) Technical analysis is one-sided I have read countless books and articles on technical analysis, so I know that the result of learning 99% of the books on the market is-lose! Because most of these books are very one-sided and do not have a high success rate. For example, books on stocks often use an example of the most violent rise and doubled several times to explain a golden cross to illustrate his technical strength. Most technical analysis books are saying that if this indicator phenomenon occurs, then you will get that result. In fact, it doesn't stand the test at all. Most of the classic technical indicators and K-line combinations, even including morphological breakthroughs, if used without discrimination, the success rate will even be lower than 40%. As a result, there is a phenomenon that if you don't learn technical analysis, you still have a 50% success rate in tossing a coin, but you only have a 40% success rate if you learn technical analysis. Using it according to the textbook will only make you lose money. Technical indicators are of course very useful, but they also require high-level application, otherwise there will be a 50% chance of winning if you don’t learn technology, and the success rate is less than 40% if you learn technology. Behavior patterns determine your results. In general, wrong behavior patterns will inevitably result in repeated mistakes. And being right is just random luck. Fortunately, the sow also climbed the tree. Using technical analysis to operate is a behavioral pattern, which is quite stable, so it can be stabilized at a low success rate or a high success rate for a long time. So there is the possibility of continuous improvement and profit. (2) Technical analysis cannot put the cart before the horse do what? Of course, it is to predict the trend to make money! Everyone is working hard to make money. Art number, technical analysis, fundamental analysis. The technical indicators are also full of tricks and unconventional. However, everyone knows that when the technical indicators have a golden cross, they can be bought, but they often don't think about why the golden cross should be bought? The reason for buying is to judge that the price will rise, so you have to buy to make money, but if it is golden cross, it must rise, and if it is dead cross, it must fall? Of course it's impossible, it's just a matter of whether the success rate is large or small. How to identify incorrect entry and improve the success rate? Then we have to mention the question of essence. If you don't study the essence and stay at the appearance, then the cart is putting the cart before the horse. Almost all technical indicators are calculated according to the price in a certain way, that is to say, they follow the price fluctuations, not ahead of the price fluctuations. It is impossible for any indicator to perfectly express and judge the nature of price fluctuations. Undoubtedly, there are many limitations, so it needs the cooperation of various technologies and even manual comprehensive judgment and filtering to do well. Including some so-called leading indicators, it is actually impossible to predict! It is just a judgment based on price calculations or speculative data, indicators, not prophetic rules. If when an indicator buy signal is issued, the market situation does not reflect a higher probability of the market rising, so why buy it? If the indicators are stuck together, buy and sell signals are frequently sent out, do you still have to do it? If the golden cross occurs after a lot of rise, then this golden cross may mean that a decline or consolidation is coming. In fact, the price determines the indicator, not the indicator determines the price. Through technical analysis, we try to find out the bias of market sentiment, the bias of long and short, and the divergence and unity of mainstream forces, so as to judge the long and short. The popularity bias determines the capital bias, and the price is driven by funds. (3) Fate may have been preordained No matter how good your analysis is and how sure you feel, when you place an order, you are placing a bet. Assuming that you earn 20 points each time and set a stop loss of 40 points, then you need to make two trades to make up for one loss, that is, the 66.6% success rate can only break even. Only a 70% winning rate can make a slight profit. Undoubtedly, to achieve a success rate of more than 75% to make a profit is a dead end for ordinary people, and it is almost doomed to lose money. Only a few people can do it, and even if it can be done, it is not a good way . Conversely, if you earn 40 points every time and set a stop loss of 20 points, you only need a 33.3% success rate to break even, and a 40% success rate to make a meager profit. If you earn 60 points each time and set a stop loss of 20 points, you can make money with a 30% winning rate. The trading masters who make the most money outside the box do not have a high success rate or even only 40%, because they lose less when they lose money, and they are good at increasing their profits in a timely manner when they make money. The profit model is nothing more than earning more and losing less overall, because it is impossible to make every profit. There are 1 modes, high winning rate, earning more times than losing. But taking a risk of one point should not be less than one point of profit, and more than 50% power can also make money. It is necessary to have a good technique. 2. The winning rate is low, but if you make a profit, you must withstand the loss of 2 or even 5 transactions. This strategy can be used by people who are not technically in place. This only requires a certain technical foundation, a rough trading strategy that follows the trend, and then controls the risk-benefit ratio, using mathematical model control to achieve the result and finally profit. The behavior model determines the result, and the ending may have been decided from the beginning. (4) Every opportunity may be a trap Every day, there are always many people staring at the computer and waiting for every opportunity in the market, absolutely not allowed to miss any opportunity. Maybe you think it’s activated now, this K line is more powerful, this guy has finally started to exert his strength, let’s enter the market! Everyone in the market has seen it, so is everyone making money? Of course it is impossible. It is impossible for most people to make money in the financial market. This is the basis for the existence of the financial market. The market is a big fool, and there are often some specious so-called opportunities and launches before the real launch. You always want to seize every opportunity, so you will not miss the traps that account for the majority. Nervous people are often dizzy by the market. To be a winner, you must have enough technology and experience to avoid these traps, and only make a small number of relatively reliable opportunities. (5) Not conducive to long-term survival mode The following are the operating modes that are not conducive to long-term survival and novice survival 1. Do both long and short intraday trading, regardless of trends. It is not so easy to make full use of all opportunities. Most people can't do it. 2. Often operate against the trend. And those who feel that it is almost time to go, guess the top and bottom, and those who follow the trend are just borrowing strength, and sailing against the current is thankless. 3. After placing an order, the loss locks up the order. Most people will make guesses without a strong basis in their minds, or want to narrow the gap after locking up the order. ) 4. If you make a loss after placing an order, you will think that you have made a mistake to close the position and do it in the opposite direction immediately, but there is no reliable technical basis. Even if you make a mistake, you will double and reverse it, and make more mistakes. In most cases, you can indeed make money, but sooner or later One day they all went bankrupt. 5. It is a taboo to increase the position in the case of heavy positions or losses, and it is also the road to sudden losses! 6. Excessive price chasing is also easy to get caught. 7. Break through after a lot of ups and downs. At this time, the use of machinery to break through and open positions is easy to be reversed or falsely broken through. Empty on the floor, more on the ceiling. (6) luck It is said that luck is unreliable, but some people are just lucky, and they came back after getting hundreds of points a few times. Take a closer look, they are all orders following the general trend. In fact, luck is related to behavior patterns. But luck and the trend are also unreliable. You can’t stop loss just because of the trend, because the trend will always reverse, so as long as you make a mistake once, you may lose your position. (7) Signal application of technical analysis The bullish trend callback uses technical bottoming or a small cycle to launch a bullish attack signal to buy. In the short market, long stocks rise and sell with the signal of peaking or the signal of small cycle short attack. The reliability of the peaking signal for the bullish trend is small, and the reliability of the bottoming signal for the short trend is small. The short trend is downward, and the possibility of trend continuation is always greater than that of reversal. There can be multiple rebounds in a downtrend, but there is only one final reversal. In terms of probability, various short selling signals are the most accurate. When a buy signal occurs in a bearish trend technique, you think that a rebound or reversal is about to start, but in fact it is not very reliable, and even if it happens, it is often not strong enough. On the other hand, since the trend of the bull market is more likely to continue, isn't it more reliable to use the signal of buying at the bottom in the bull market? (8) advance and retreat right and wrong It is most likely to happen in actual combat. After placing an order, you only think about the direction of your own order, and you don’t think about the wrong situation. Don’t just think about the positive side. If you place an order, if it is contrary to what you want, then where is it? reliable support? How far is it from here? If it's too far, forget it. If it is in the form of rebound buying and the drop is less than 38%, consider giving up. (9) Launch and breakthrough signals, false breakthroughs The market is full of tempting and confusing signals. In the small cycle, there are many obviously prominent K-lines. How to filter? In many cases, contrarian signals are not reliable and should be used sparingly. Note that microscopic things such as one or two K-lines, the breaking of the moving average in some cases, often cannot change the whole. Sometimes it is not so stable. Subtle details may be the fuse of the overall collapse, but they often only play a role in driving the trend within tens of minutes. If you don't come out in time, you will have problems. So wait, maybe a more definitive breakout establishment signal will happen, at the cost of only 10 or 20 pips more. There may also be a strong retrograde after a slight breakthrough. The signal at this time is extremely clear! What we need is a strong and powerful signal, which does not need to be carefully observed. It is so clear and strong that this kind of signal can truly stimulate and call on the big funds in the market to follow, and then move forward indomitably. Those weak signals that need to be carefully observed may be obvious in a small period, but they are not strong. Such signals are unreliable, and there is a high possibility of false breakthroughs. In addition, there is an obvious retrograde immediately after the order is placed, indicating that it may be wrong, although not necessarily, if there is a chance, it should be out of the game with a small loss or with capital preservation. You can't see flat money or small profits and start fantasizing again. Breakthrough? Attack? In order to find these signals, in essence, we are not looking for a golden cross or a positive line, but a breakthrough of the situation! If the trend has clearly broken the original pattern of consolidation, then It is credible, if not, why believe it? A false breakthrough is actually a breakthrough, but it has gone in the opposite direction. Deliberately created a trap that triggers a stop loss order)! After a breakthrough, it weakens quickly, and even breaks in the opposite direction. (10) Small stop loss strategy Some people stop the loss at 10 pips and require that the order will not be subject to shocks, that is, the trend will never return. This kind of order. There are only two types: one is extreme edge trading with strong support pressure. One is a one-sided and powerful trend. When entering the field, the attack must be strong, otherwise there will be no situation where the other side is unable to fight back or unintentionally overwhelming. Do not participate in any slow-moving exercise, otherwise it is easy to be knocked out, and unnecessary bleeding is also fatal. (11) Increase in intraday trading Only in strong trends and strong fluctuations can there be enough space, and it is easier to break through various resistances. This kind of list can be considered to increase positions and use trailing stops. Even transactions that follow the trend are not always going forward, so increasing positions within the day is not possible Take it lightly, only if you determine the big fluctuations. The weak contrarian fluctuations are limited, only within 10 to 30 points, and generally do less or not. The position must be precise, never chase the price, and never increase the position. The position is not even as good as opening a position with 2 units. If you open 2 units, make a profit and then make half of it. To make a profit, it is necessary to keep the profit in time, especially when the speed is very slow or when it is not going well. In addition, it is not suitable to use a moving stop loss. After all, the profit is very small, and the return is more than ten points, what else? It is better to close the position directly at the resistance level. (12) Trading strategy All the important rules are to follow the trend, look for the weak direction and use technical signals instead of forcing. Similarly, weak direction and strength are not suitable for chasing or increasing positions, and the same is true for small-level graphics, because they do not have that much effect. The rest is specific technique and discipline. Taking advantage of the trend to increase positions is not only the direction of the current intraday fluctuation momentum, but also the direction that is consistent with the 4h and even the daily band. Only in this way can we provide a broad space imagination and market impact. (13) Size cycle A small callback in a large cycle and a small cycle is already a reversal pattern. Therefore, in many cases, the reversal of the small cycle is not terminated very quickly, because the return slip of the larger cycle is already in place. The large and small cycles match each other, and the technical rules of small cycle fluctuations are effective before encountering the technical position rules of the large cycle rules, but after that, the small cycle rules will become invalid! For example, in the 4H downward trend, when it rebounds, you can fall back and touch the Bollinger Bands in 15 minutes to buy, but if it rises to the upper track of the 4H Bollinger Bands and then falls, it will not work, because the rules of the big cycle determine that it will fall a lot. Arms can't twist thighs. Small cycles are mostly controlled by large cycles. The contradiction between large and small cycles is generally not contradictory, but I didn't notice that these movements are all in the palm of the large cycle. (14) let’s talk about increasing positions If the profit is too small to ensure the safety of increasing the position or there is not enough space in the future, it is indeed impossible to increase the position. But there is another important point. If the situation is very good after you place an order, and a new purely good order point appears, then it is irrelevant. Because of the small profits in front, there is more reason to win, because the total The loss is small. Assuming that your position is profitable and continues to run under a strong trend, then when you have already calculated to open 2 new positions, and you plan to hit a stop loss of 15 points (the specific amount depends on the situation), the old gain There are already 4 shares of profit positions, so the loss of 15 points back is 6 shares of 15 points! Calculated in this way, is there still a profit? If there is, then under the condition that you have controlled the absolute profit, it is no big deal to go all out! Then I can use a 15-point trailing stop loss in the old position! Then open a position, set a 15-point stop loss, and add a 15-point trailing stop loss! I don’t have to wait for him to be hit when I set a trailing stop loss, and I have a profit , I can consider the issue of closing positions as long as I call back at 15 points to close all positions! So the whole process is already under control, so what if it is close to a full position? This kind of position control is to increase the position after it is absolutely risk-free rather than seemingly risk-free , to be watertight! (15) disagreement When the popularity collapses, there are the least differences, so the variables are the fewest and the power is the greatest. On the contrary, when there are many differences, there are many variables. When the trend is strong, there are few divergences, but there will be divergences after a few waves of ups and downs. become volatile. If possible, I will try to wait for the market to go from divergent to unified, and the running-in shows a clear direction. (16) Main supporting pressure Overbought and oversold, golden section, Bollinger bands, horizontal lines, trend lines, moving averages, pivot points, integers, divergence. Select some of these elements depending on personal preference, and draw them in advance to avoid omissions. The effect of multi-position golden section overlapping is better, and the effect of floating golden section is not good. Various technologies can form a synergy effect, otherwise the effect is relatively poor. The effect of upward pressure is generally poor, and it is not credible to use the lower support effect of short trend. It is not credible. Nor is it allowed to believe in support! Short positions are similar. (17) Keep making mistakes Not everyone can achieve a success rate of more than 80%, and more people have a success rate of less than 70%. The foothold of trading strategy technology is not to make profits from constant correctness, but to make profits from constant mistakes. Can make a profit, because we only have a little success rate at the beginning. Until we reach the level of high success rate. But in fact, the success rate is not directly proportional to the amount of money. Keep summing up, what is the reason before placing an order? The mentality fluctuations and changes in the process of holding orders, the reasons for flat orders, and the summary of right and wrong. If you put more effort into this, you can avoid repeating the same mistakes too many times, and if you lose less, you will improve. The profit model is summarized, and the profit will be more. It is also a good way to wait patiently, only make your own stable profit model, and do one trick at a time when you are mature. (18) There are always variables, always add stop loss This order made a lot of money, pure luck! ! ! Who knows whether the trailing stop loss will be eaten up? It is very possible that there are 10 points left in half a day, and even a lot of stop losses are hit as soon as the position is opened. Technology is nothing more than the addition of experience and technology. No matter how stable the profit is planned in advance, it may fail in the end. So every time you place an order, you need to place a stop loss. If you don't think about the negative side, you will often lose your objectivity. It is said that a certain emperor asked the Supreme Emperor how to avoid liquidation, and Wei Xiaobao handed over four words: always add stop loss.

old troublemaker in mountain city

Do you really know what is going with the trend and what is going against the trend?

chief sleep expert at ma jiao institute of technology

Trend traders all understand the importance of trading with the trend, but in actual operation, they often appear to be trapped when they place an order with the trend. Soon after placing the order, they will have to bear a large floating loss or directly sweep the loss, and sometimes even cause a large loss until The situation of liquidation. Many people who oppose trend trading completely lose confidence in trend trading because of this, and return to the so-called swing trading of "searching for tops and bottoms, chasing ups and downs". Regarding the problem of following the trend and going against the trend in trend trading, I suddenly had a little insight today, and I recorded it for your reference. First: The trend must be divided into time levels. When we judge whether the current market trend is bullish or short, we must be clear about the time level. A bullish trend at the daily level may be just a callback at the weekly or monthly level, while a volatile market at the daily level , There may be a complete trend market form on the hourly line. Therefore, be sure to clarify the time level of the trend you are judging. Second: trend trading is "seeing the big and making the small". Whether it is a long-term market or a short-term market, trend traders must first judge the trend direction of the large-scale market to judge the overall direction of the order, and then look for opportunities to participate in the market from the small-level market. This is "seeing the big and making the small". If you are a long-term trader, you can find more accurate entry points through small-level market patterns. If you are a short-term trader, you can participate in those short-term breakthroughs that are consistent with the direction of the general trend to improve trading accuracy. Third: Trend trading trap. There are two situations in which trend traders will not intervene. One is chasing orders. After the market breaks through, it develops for a period of time before chasing ups and downs. The second is on the left side. Buy bottoms at the top, imagining that the next K line will start a new trend. It is precisely because of the superstition of trend traders on trading with the trend that in the process of "looking at the big and doing the small", especially when encountering the shock state of the small-level market, they blindly emphasize making breakthroughs with the trend, but will fall into chasing ups and downs And the situation of finding the top and buying the bottom. Fourth: The essence of trend trading is to "follow the trend in general and go against the trend locally". When we participate in a trend market, the best point of participation is the callback point after the trend starts, because here the accuracy can be guaranteed, and the trend market space can also be guaranteed. The pullback of a period of trend at a certain time level can also be a complete trend in the small-level market. If we want to capture this callback point relatively accurately, it is best to observe this pullback trend on the small-level market. When it is over, you can use pressure to support the position, or you can use the K-line to reverse the shape, touch its top and copy its bottom. In this way, we are against the trend in the small-level market trend (that is, local), but we are in the same direction as the large-level market trend (that is, the overall) to follow the trend. Postscript: Most of the time, the trading process of trend traders is painful and unpleasant, because the market is in a state of balance and shock most of the time, which is the paradise of swing traders. Trend traders want to capture how the so-called large-scale market breaks out, when it breaks out and in what state it ends, and whether it can go out of the expected space, no one knows. Trend traders often need to observe for a long time, and the trading opportunities they get may not be accurate. Waiting and stop loss seem to be inseparable friends of trend traders. Swing traders often die from a violent reverse breakthrough, while trend traders are most likely to wither gradually in constant stop losses.

Leek Egg Noodles

Re-examining trading from the perspective of probability theory

george.d

Before discussing transactions, let's discuss randomness and probability clearly. How to understand randomness? If you flip a coin ten times, will it really come up five times? Its regularity is actually different from what we intuitively imagined, so that most people in life will misread probability. For example, we know that the probability of flipping a coin is half and half, but if you toss a coin ten times now, do you really get five heads? In fact, this possibility is only about 1/4, which is obviously completely different from most people's intuition. Another example is that there is a gamble with a 10% chance of winning. Can you guarantee to win at least one time if you play it ten times? If not, how many times does it take to have a high chance of winning once? This result is actually 26 times, which may also subvert your cognition (the above two examples can be easily calculated through Bernoulli experiments). Therefore, we have to get to the bottom of the matter, and use some examples to clarify what randomness means, and how we can get the correct statistical laws instead of subjective bias. We all know that the laws of statistics can only be obtained after a large number of random experiments, and they are meaningful. But the results obtained by random experiments may be different from the conclusions we calculated using classical probability. Not only are you unlikely to get five heads most of the time when you toss a coin 10 times, the same is true for other random experiments you do. For example, if you roll a dice 12 times, only about 30% of the time it will come up with exactly two sixes. At this time, can you say that there is a 70% possibility of negating the conclusion that the probability of six dots turning up is 1/6? It doesn't seem like it should be so arbitrary. What is wrong here? The key here is how to account for deviations between real and ideal probabilities. Why do actual probabilities always deviate from ideal probabilities? Hundreds of years ago, in order to answer this question, the French mathematician Bernoulli and others began to do some of the simplest random experiments, which are so simple that there are only two results, either A or B, and there is no third state, and Repeat this experiment under the same conditions, and the probability of occurrence of A and B needs to be the same. For example, tossing a coin, the probability of each head is 1/2; throwing a dice, event A is "six points up", and the probability of its occurrence is also 1/6 each time. Of course, event B is that other points are up, and the probability of each time is 5/6. In general, the probability of A is p, and the probability of B is 1-p. Such experiments came to be known as Bernoulli experiments. Ok, the basic settings are explained clearly. Let's analyze the problem of tossing a coin. Logically speaking, if we toss a coin 10 times, the number of heads should be 5 times. But if you actually take a coin and try it, you may find that it may only come up heads three times, or it may come up four times, or it may even not turn up heads once. If we calculate the possibility of facing up from 0 times, that is to say, all the times are upside down, to 10 times are all upside down, and draw a line graph, which is a bulging curve in the middle: It can be seen from the figure that although the possibility of 5 heads up is the highest, it is only about 1/4. The reason for the inconsistency between the experimental results and the theoretical values is that the number of ten experiments is too small, and the statistical regularity is covered up by the randomness of the experiments. Wouldn't the regularity be a little clearer if we did more random trials? For example, if we do 100 experiments, you will find that in 80% of the cases, heads appear 40 to 60 times. If we continue to enlarge the number of experiments, you will find that the number of heads-ups in most cases fluctuates around half, and the possibility that the proportion of heads-ups is particularly small or too large will hardly appear, not like the beginning That way, anything is possible. Of course, if you do 1000 trials, 99.9% of the time the number of heads will be between 400 and 600. Even if you narrow the range of floats to 450-550, 99.7% of the time the heads fall within this range. In general, if this simple Bernoulli experiment is performed N times, how many times will event A occur? Although we feel that it should be the total number N multiplied by the probability p of each occurrence, it is actually possible for event A to occur as many times as possible. Of course, the possibility of N*p occurrences is the highest, followed by N*p+1 or N*p-1 occurrences, and then gradually decreases towards both ends. If we draw it as a curve, it is a curve with a high middle and low ends. By the way, a probability distribution that satisfies this curve is called a Bernoulli distribution, also known as a binomial distribution, because there are two outcomes for each trial. We also look at this experiment. In fact, if the number of trials N is relatively large, there will be a big bulge in the middle, and then it will drop rapidly, and the sides will be almost zero. This means that the probability of event A occurring at around N*p is very high. Large, other possibilities are extremely small. On the contrary, if the total number N is relatively small, the bulge in the middle will be relatively gentle, and the values at both ends will be small, but not zero. In fact, it is difficult to determine how many times event A has occurred. Thus, we come to such a conclusion: the law of uncertainty can only appear when there are a large number of random experiments, and when the number of experiments is insufficient, it will appear accidental and random. How to find out the nature of this deviation? Of course, in mathematics, we cannot describe a law with loose language such as "the curve is more bulging" or "relatively flat". We need to use two very accurate concepts to quantitatively describe the difference between "drum" and "flat". The first concept is the average value or the mathematical expectation value, which is N*p, because after N trials of an event with probability p, the average number of occurrences is also the most likely number of occurrences, well, this is N*p . Next, we use the concept of squared difference (referred to as variance) to describe the "drum" and "flat" of the curve. The word "variance" may be familiar to you, so what is variance and how is it calculated? Let's briefly talk about it below. Variance is actually a measure of error. Since it is an error, there must be a comparable base point. In probability, this base point is the mathematical expectation value (referred to as the expected value), which is what we usually call the average. For example, if you do 10 coin tosses, the average is 5 heads, and 5 is the basis point. If we do 10 trials and only face up 4 times, there is an error, and the error is 1. If 9 heads come up, then the error is large, which is 4. Well, next we will consider all kinds of errors and the possibility of those errors together, and make a weighted average, and the calculated "error" is the square difference. The reason why the word "square" is used is because the square is used to calculate the error of the variance. In order to further facilitate the comparison between the error and the average, we usually open the root sign of the variance once, and the result obtained in this way is called the standard deviation. (Strictly speaking, there is still a slight difference between the square root of the variance and the standard deviation, but the difference is very small. For ease of understanding, we assume that the standard deviation is the result of the square root of the variance). The formulas about variance and standard deviation are omitted (interested friends can Baidu by themselves). Let's directly talk about the conclusion, that is, Bernoulli experiments or other similar experiments, the more the number of experiments, the smaller the variance and standard deviation, and the more the probability distribution is concentrated in the position of the average value N*p. Obviously, in this case, it is more accurate to use the number of occurrences of A divided by the number of trials N as the probability of A occurrence. Conversely, the fewer the number of trials, the flatter the probability distribution curve, that is to say, there is the possibility of A happening as many times as possible. At this time, you use the number of A occurrences divided by the number of trials N, as the probability of A occurrence , the error may be large. Specific to the experiment of tossing a coin, 100 experiments are performed, and the standard deviation is about 5 times, that is, the error is about 10% compared to the average value of 50. But if we do 10,000 trials, the standard deviation is only about 50, so compared to the mean, it drops to about 1%. Ideal and reality: success requires more preparation With the concept of variance, we can quantitatively analyze the gap between "ideal" and reality. What is ideal? We conduct N Bernoulli experiments, the probability of each event A occurring is p, and N times occur N*p times, which is the ideal. So what is reality? Due to the influence of the standard deviation, the actual number of occurrences seriously deviates from N*p, which is the reality. For example, in life, many people think that something has a 1/N probability of happening. As long as he does it N times, it will happen once. This is just an ideal. In fact, the smaller the probability of an event, the greater the gap between ideal and reality. For example, the probability of something happening is 1%. Although its mathematical expectation value reaches 1 after 100 trials, its standard deviation is also about 1 at this time, which means that the error is about 100%. Therefore, after 100 trials It may not be successful even once. What if you want to be sure of getting the first shot? You're doing about 260 or so trials instead of 100. Friends who are interested in the mathematical details here can ask me to discuss it. Here we use the conclusion directly, that is, the smaller the probability of an event, if you want to ensure that it happens, the number of trials that need to be performed is much more than the ideal number. Things like buying lottery tickets. Your chance of winning is one in a million. If you want to be sure of winning once, you may have to buy 2.6 million lottery tickets. Even if you hit the jackpot once, you spend far more money than you get. Therefore, if you understand the standard deviation, you should understand why people don't gamble. This is the first point we need to understand in terms of cognition. The second point we need to understand is that improving the single-shot success rate is far more important than doing more experiments. If you have a 50% chance of success, you basically try 4 times to ensure success once. Of course, the ideal state is to try twice. To be on the safe side, do 100% more work. But if you only have a 5% chance of success, it will take about 50 attempts to ensure one success, not the ideal 20. To be on the safe side, do 150% more work. Many people like to bet on low-probability events, thinking that the cost is low, and it’s a big deal to do it a few more times. In fact, due to the effect of errors, the cost of ensuring the occurrence of low-probability events is much higher than that of ensuring the occurrence of high-probability events. Regarding the laws of probability theory and statistics, there are still many places that do not match our intuition. For example, the large number of random experiments we mentioned earlier need to be carried out under the same conditions, and the previous and subsequent experiments will not affect each other. In reality, these two things are really not easy to satisfy. Take throwing dice as an example. It seems that throwing N times is just a repetition of one throw, but in fact, if you throw too many times, the dice will wear out, and the table will also have holes. These small differences will accumulate and produce Different results, what we thought would happen after a few tries, may not happen, which requires us to consider more margins in advance. Let's talk about transactions Those who were good at fighting in ancient times were invincible first, and waited for the enemy to be victorious. In the market, you must first find a suitable product, build a trading system that suits you, and ensure the balance between the transaction winning rate and the profit-loss ratio, in order to accumulate your own advantages. After all, trading is a game of probability. How to manage funds in the account I believe that through the probability knowledge above, everyone has already understood. The most important part of trading is money management. Because no matter how powerful our trading strategy is, if there is not enough number of transactions as a guarantee, it is impossible to give full play to our strategic advantages. When doing fund management, some people on the Internet suggest that the risk limit value (including transaction costs) of each transaction is set at 2%. Let's see if it is reasonable. If every transaction reaches the risk and limit value, the total number of transactions that can be done is 50 times. From the probability knowledge above, we can know that our strategic advantages have not been brought into play in 50 experiments. Therefore, even in the worst case, we need to do enough transactions to allow the advantages of this strategy to play out. When the number of transactions is sufficient, this strategy is still not profitable, and we can determine that it is a problem with the strategy. For example, we can try to set the risk limit at 0.2%, so that the account can do about 500 transactions even in the worst case. How to optimize the trading strategy Many people would say that the profit-loss ratio and trading winning percentage are like two ends of a seesaw, when one end rises, the other end will fall. In fact, we should compare and optimize our strategies on the same baseline, for example, how to increase the profit-loss ratio under the same transaction winning ratio; or how to increase the transaction winning ratio under the same profit-loss ratio, which is the key to our optimization strategy , which is also the process by which we screen effective signals. How to determine the trading position In short, one sentence: the loss is quantified, and the probability is the priority. What does that mean? We need to determine the entry position first, then determine the stop loss position, and then calculate the trading volume that needs to be done based on the stop loss position space and risk limit value we have determined. This is quantified by loss. Then, every transaction we make needs to meet the optimized trading strategy set by ourselves. This is probabilistic. Summarize Only when a trader achieves an appropriate order accuracy rate, an appropriate take-profit and stop-loss ratio, and an appropriate position control, when these three points complement each other, can he have the opportunity to move towards long-term sustainable and stable profitability. When I was writing the manuscript for this article, I saw someone in the group send the following picture: So please think about it, why is the content in the picture unrealistic? You can start from the following directions: 1. What is the probability of success of this strategy? 2. If you need to ensure the success of this strategy, how many such accounts do you need to make? 3. What is the principal required for all accounts? Welcome to write your thoughts in the comment area below. In the next article, let's talk about how to tame the goddess of luck and make her favor me. Good luck with the transaction

Only give you authentic financial knowledge

Why you keep losing money with trading?

logicaltrader

Everyone makes money with trading but me. Why in gods sake everybody talks how easy it is to make money in trading but when it comes to my trading that I still lose money? This video could give you the answer. https://www.trading.live/en/logicaltrader/video/21351

Trading with pure logic and trend following

How to spot trend reversals like a pro? these points are very important

小赵论金

" Don't trade against the trend " You may have heard the phrase "don't trade against the trend" a million times, and your ears may be calloused, but if you do it right, trend reversal trading can be crazy profitable, so how to do trend reversal What about the deal? Let's talk slowly below! Mistakes You Can Make in Trend Reversal Trading 1. Reverse and go long in a downtrend For those sharp downtrends, you are long the market when you are not sure, just like the picture below: At this time, it is meaningless to grasp the trend reversal, because logically, you are long at this point, there is no place to place a stop loss, and there is no support position or market structure to refer to. The trend needs time to reverse its direction. It needs to attract more people to enter the market. Take the above picture as an example. When more and more people go long, even until no one goes long, then the trend is reversed. . 2. The first retracement to do long Many traders make mistakes when they first retrace, what does that mean? Take the following picture as an example: When the price is falling back, many traders will go long at this time, but the trend has not changed, and it is still a downward trend. This is what people often ask, how to judge whether the retracement is really a reversal. So how do we determine whether the trend is reversed now? Let's first understand the four stages of the market. It will be beneficial to read it! The market can be divided into four stages: 1. Accumulation stage 2. Advance stage 3. Release stage 4. Declining stage What does that mean? Take it easy! 1. Accumulation stage The accumulation phase looks like a range-bound market in a downtrend, but judging by the trading volume, buyers and sellers are in balance at this time; Generally during the accumulation phase: The ratio of bullish candlesticks to bearish candlesticks is close 50-period moving average flattening (using 50MA) The price fluctuates back and forth around the 50MA (as shown below) The consolidation phase is not yet certain that the market will reverse from here, but it is there to remind you of the possibility that the bulls may take action to push prices to the highs of the range. 2. Promotion stage This phase is essentially an uptrend, with prices making higher highs and lows, and judging by volume, the bulls outweigh the bears. Usually at this stage: K-line bullish versus bearish The bullish K-line is greater than the bearish K-line The price is above the 50MA 50MA points higher The push phase eventually requires a "rest" as early investors who are long are about to profit and are ready to sell their orders at a time when sellers are also ready to short the market where it is attractive. 3. Release stage Buyers and sellers are in balance during this stage, usually during this stage: The ratio of bullish candlesticks to bearish candlesticks is close 50MA flattening The price fluctuates back and forth around the 50MA Like the first one, it is not sure that the price will reverse at this time, but this has already told you that the bulls may become weaker when encountering resistance, and there is a possibility of turning short. 4. Declining stage A down phase is essentially a downtrend, usually in a down phase: Bearish K-line vs. Bullish K-line Price is below 50MA (reference) 50MA points lower How to Spot Trend Reversals Like a Pro 1. Identify support on the higher time frame (daily chart ) First determine the support and resistance levels on the daily chart, the more important the level, the better the effect. 2. Determine the accumulation phase of the lower time period (1H) Now let's narrow down the time frame a bit, and what we're looking at are the price lows on the smaller time frames, the price lows of the accumulation phase and the support points on the larger time frames. General guidelines: first identify support on the daily chart, and then find an accumulation stage on the 1H chart. In the subsequent entry stage, stop loss and take profit can refer to the previous bullish engulfing line trading strategy!

Trading Technology Analysis

God help those who help themselves, foreign exchange novice should be alert to the inside story of the industry!

chief sleep expert at ma jiao institute of technology

Mazhao has repeatedly emphasized in the article that even with the most conservative trading strategy, compared with any other industry, the potential income brought by foreign exchange margin speculative trading is at the level of huge profits, and this is its greatest charm. Just as blood attracts flies, huge profits attract scammers, who use all kinds of tricks to defraud traders of their principal. Because it is too difficult to achieve stable profits and continuous compound interest, some old fraudulent methods are slightly changed, and the cloak of foreign exchange trading can be used to make novices play around and contribute their hard-earned money willingly. Before achieving stable profits, novices in trading must first learn how to be alone in the magical world full of ghosts and monsters, not to follow the trend, not to be led by the nose. As the old saying goes, those who help themselves are helped by Tianheng, and those who are fooled and lame have a characteristic. They refuse to work hard, and they want to find a teacher, find a substitute, find EA, find the Holy Grail, and find everything outside of them to replace their own efforts. , trying to figure out a little capital to make it multiply like a mouse cub. The scammers take advantage of this, and use some cover-ups to win the trust of the trading rookies, thus playing with them. How do foreign exchange "teachers" gain your trust? Novices in trading have an obsession, "practice is the only criterion for testing the truth", whether the level is high or not, the result is the talk, as long as it can make a profit, shit is gold, as long as it can't make a profit, gold is also shit, and the greater the profit , the faster, the higher the level. Therefore, the "trading teachers" are particularly keen on showing his "profitability" : The first profit list , we often see some people suddenly post a screenshot on various communication groups, forums and other platforms, all of which are large profits. His trading records, the position is heavy and profitable, and he can't wait for this order to turn over the position, which can make the novice traders fall into the ground at once ; The second is to show the capital curve . Many professional "trading teachers" will always have several trading accounts with very beautiful capital curves. The third is to engage in market forecasting . Many trading analysts publish market analysis reports every day like doing tasks. The market direction and opening points are clear at a glance. Its foresight makes the novice traders suddenly have the idea of committing themselves to thieves in the mist ; The fourth is to build a call order group . There are some "teachers" who have more and more followers, so they build a call order group, so that traders can suddenly point out the heroism of the country in an immersive experience, and make a lot of money by copying orders a few times. You What is there to doubt? What do foreign exchange "teachers" want to do? Most of the foreign exchange "teachers" who can fool people are very knowledgeable. They know that there is something wrong with foreign exchange trading: the risk of trading is extremely high, and you can lose as much as you can earn, because novices will not believe it if they say it. If you believe it, you won't play anymore. Mazhu "teacher" has been admonishing friends, as long as you have a legitimate job and live a good life, don't touch foreign exchange, don't touch stocks and futures, trading is poisonous, be cautious, this is Mazhu The conscience of the "teacher". However, the foreign exchange "teachers" pretend to be confused with their understanding. All the show operations have only one purpose, and that is to make money without risk. Some of them cooperate with foreign exchange platforms, using technology as a gimmick to attract people to earn commissions, which is understandable; Agent, self-directed and self-acted, as long as you make money, it is like a wild boar falling into a trap and there is no possibility of survival. There are also some with private goods, such as selling systems, a trading system of 98,000, which claims to have a winning rate of more than 90%, and flips positions every month, as evidenced by backtest records, are you tempted? Selling courses, a set of courses is 98,000, and it is claimed that the winning rate is over 90%, and it turns over every month, and it takes two months to learn, with transaction records as proof, are you tempted? Selling EA, I will give you a castrated version first, let you earn some sweetness and start to lose money, and then tell you, the full version is 98,000, the winning rate is more than 90%, and the position is liquidated every month. Are you tempted? Selling traders, trading on behalf of customers, claiming that the winning rate is more than 90%, and the position is turned over every month. The profit is shared, and the loss is yours. There are customer cases to prove it. Are you tempted? There are also some traders who claim to trade after the bad, that is, trade with guaranteed capital, win a share, and lose money. Are you tempted? What is the truth? I believe that there are really well-meaning master traders in this world who will help novice traders out of public welfare and compassion, but you and I will never meet them. Because compared with the return of speculative transactions, any profit obtained by technology transfer is drizzle. When the stock operator Jesse Livermore was brilliant, publishers all over the United States asked him to write books and give lectures, and he scoffed at them. When he went bankrupt, he took the initiative to send a thick manuscript to the bookstore, and everyone regarded him as a wipe Paper. There is indeed a legitimate industry in the world that makes a living by training trading, and many novice traders do need systematic training. But relying on short-term surprise professors like summer camps, no one except geniuses can quickly learn to trade. The legendary turtle training class lasted only two weeks, but you don’t know that the young turtles traded with the old turtles for three years. For novice traders with ordinary qualifications, three months of theoretical courses, supplemented by one to two years of simulation or small capital real offer training, can be enough for entry level. But who would spend hundreds of thousands of dollars on a two-year trading course? And who can stably offer two-year trading training courses for the same group of people? So all the "trading teachers" you meet, no matter whether he is making predictions or calling orders, his purpose is definitely not to teach you trading knowledge. The means they use are just one sentence, ignoring the process, and using the results to confuse you . Huge profit orders can be hoodwinked, transaction records can be made, and even the glorious record of calling orders and trading on behalf of customers can be hedged with different accounts. You only look at the results, so you deserve to be cheated. Trading "teachers" only tell you how to make a profit, but they never talk about losses. They only tell you where to open a position, but they never talk about positions and stop losses. They are glamorous, but you don't know if their white buttocks are exposed behind their straight suits! Not even trading courses are designed to teach you trading skills. As the saying goes, a word is true, but thousands of books are false. The courses for training teachers are always all-inclusive. In fact, most things can be released at one time. They are just selling old wine with new bottles. And the more obscure things are, the more popular they are, because people subconsciously believe that things that can make a lot of money must be unpredictable. In fact, the things that really make money are often very simple means, and then they are repeated constantly. It can be explained in a few words. What traders really need is exercise, continuous training and mastering with the help and supervision of teachers, and getting rid of mistakes It is impossible to teach these things, and the teaching in a few words cannot be sold. Besides, EA, EA is like computer fortune-telling that was popular in the 1990s. A computer is placed on the street, and when you input your birth date, it will automatically print a fortune-telling result for you. EA is just using a computer to implement human strategies. Just as many people subconsciously think that computer fortune-telling is scientific fortune-telling, many traders also subconsciously think that EA trading is scientific trading. In fact, superstitious science is also superstitious, and you will be lame if you are fooled by science. The role of EA is to automatically find trading signals, if your trading signals can be quantified. Traders who use EA do not need to keep an eye on the market all the time, it will automatically help you find trading opportunities and notify you, but whether it finds opportunities or traps, traders need to judge by themselves. What I want to emphasize is that there is no mathematical law in the market conditions. It is wishful thinking to judge the trading opportunities with high winning rate through several parameters and execute them without thinking. EA has no emotions. It can only calculate a few parameters and will not judge trading opportunities. Whether it is reliable or not. Many guys who make a fortune by selling EA, their biggest ability is packaging and publicity, such as quantum trading, artificial intelligence, and what fashionable words to use, are actually very common trading strategies. Just imagine, if it is really like what they advertise, the winning rate is 90%, and they turn over every month. If they hang it up for a year, they will become billionaires. Why bother to sell the program? Have you ever seen someone sell a booming business in real life? All the transfers of Wangpu are definitely not the transfer of Wangpu. God help those who help themselves, the only ally of foreign exchange traders is themselves! Jesus healed people, touched the top of the sick man's head and said, "Your faith has saved you", so the lame could run and jump, the blind could see, and the sick man recovered. We mortals always fantasize about praying to the Lord God, and the Lord Jesus means that you can save yourself by yourself. Muhammad said that mountains cannot go to Muhammad, but Muhammad can go to mountains. The purpose is the same, but the prayer is never fulfilled. Trader friends, give up any illusions, there are only vultures staring at your carrion in the jungle, there are no gods at all. You have to rely on your own hands to explore, rely on your own eyes to discover, and rely on your own mind to think. If you trade well, you will realize it by yourself, Mianzai!

Leek Egg Noodles

The special usage of trend line seesaw

trust

In the financial market, whether you are a market analyst or a trader, no matter which of these two professions you are engaged in, you will face the interpretation and analysis of the products you care about. That is to say, we all have to use Technical means may give research and judgment on the market from the perspective of fundamentals, and even give corresponding operating points. Fundamentals are beyond the scope of this discussion. This time I mainly want to share with you a special usage in technical analysis. I believe that friends who are engaged in technical analysis know that the technical analysis methods often used in the market are nothing more than technical indicators and marking tools. Of course, some masters put aside these exaggerated things and directly return to naked K for trading and analysis. , I believe there are not many such people. Therefore, everyone's research and judgment on the market should still be based on technical indicators and marking tools. Today I will focus on talking about the usage of trend lines. At this time, someone said, isn't it just a trend line? Who wouldn't use it? Isn't it the connection between high points and high points that forms a pressure trend line; the connection between low points and low points forms a support trend line, that's all, what can I say? ? If you only understand the use of trendlines in this way, then I can only say that your understanding of this basic tool is not broad enough. We are not arguing here, friends who are interested will continue to look down. First, let me introduce what is a trend line A trendline is a line used by technical analysts to plot past price movements of a security (stock) or commodity futures. The purpose is to predict future price changes. The line is formed by connecting the highest or lowest price points for securities or commodities that rose or fell during a specified period of time. The angle of the final line will indicate whether the security or commodity is in an uptrend or a downtrend. If the price rises above a downward sloping trend line, or falls below an upward sloping trend line, technical analysts generally believe that a new price trend may be emerging. It is generally believed that trend line analysis is a method of technical analysis, but trend line analysis must be combined with other technical analysis to achieve better results. Second, the 3 types of trends: 1: uptrend (higher lows); 2: Downtrend (lower highs); 3: Horizontal trend (regional shock); Finally, the main points of the trend line drawing method: In a word, let the price of the K-line fall as much as possible on the trend line you draw , so that the trend line will be more accurate. Having said so much, let's take a look at the usage of trend lines in combination with graphics rising trend line From the graph above, it can be seen that these three trend lines are correct from the point of view of definition, but which one has the most operational value? First of all, the light blue one, no matter from the initial request of the market to the end of the market, obviously has operable value. Secondly, the blue one and the red one are also support trend lines, but the red one is only drawn from the perspective of definition, and obviously there is no practical significance for the red one. Summary: Drawing a trend line should not only be based on the definition, but should consider the practical significance, so try to put as many low points or high points as possible on the drawn trend line, this is the main point! I won’t talk about the drawing method of the downward trend line. You can draw inferences from one instance and make an analogy. Just remember the main points. , Next, look at a special usage of a trendline: From the above two pictures, I don’t know if you have found anything carefully? These two charts, one is in a downtrend and the other is in an uptrend But the drawing method is different from the definition of the trend line drawing method we are familiar with. This drawing method is the connection between the low point and the high point or the connection between the high point and the low point. What are the benefits of drawing this way? From the above two graphs, it is not difficult to see that the trend line is generally a connection between at least two points, but when the market just started, there is no low point and low point or high point and high point at all. What should we do when everything is revealed? Then the above drawing method just solves this kind of problem. The advantage is that the support level or pressure level can be found earlier, which is convenient for purposeful operation in actual combat. This drawing method is the so-called seesaw. Of course, you can also use the disk to find more opportunities to draw pictures like this, replay the disk more, feel that it is practical, and then use it in actual combat.

Detailed explanation of the high and low position strategy on the daily chart! The strategy is simple, but the results are not

小赵论金

The daily high lows trading strategy is a trading strategy for price breakouts from highs to lows on a daily time frame. In trading, the daily timeframe is critical as most important market participants are trading This timeframe is used in both, so any trading strategy on the daily timeframe will give better trading results than the low price timeframe. On the other hand, when price bounces off the highs and lows of the daily timeframe, it signals strong market momentum, and the rush high and low strategy can provide solid trading results if range-bound markets can be avoided. Daily High and Low Strategy The daily high and low trading strategy has a simple concept: 1. If the price falls below yesterday's K-line low, it may fall further 2. If the price breaks through yesterday's K-line high, it may go higher It's very simple, right? This is the core of this trading strategy. Let's take a look at the pictures below: In the figure above, once the price breaks through the intraday K-line high, the price may reach a new high, but under certain conditions, the price may not follow the above price trend. If the breakthrough volume of the daily K-line is greater than that of the previous K-line, the price average conversion may attract a large number of investors. In the trading market, it is usually difficult to predict how long the trend can last. Almost 70% of the time in the market is It fluctuates within a certain range, so we can find a reliable daily line breakthrough position. In trading markets, the basic concept of making money is to buy low and sell high, so any breakout bullish from a significant support level on the daily time frame would indicate a reliable Daily breakout strategy. Looking at the chart below, once the price breaks the daily line from the important support level, the price will rise. Now look at the picture below to see what the price does once it crosses 50% of the possible trend (support and resistance as a trend segment in the picture). How to do the high-low strategy? This trading strategy is very simple, because traders can make most of their trading decisions the day before the expected fluctuations. The only purpose of this trading strategy is to prevent pending orders above or below yesterday's K-line, because you can learn from the previous K-line chart See if it's up or down. Time period Daily timeframes should be considered to determine high and low prices, after which move to lower timeframes for trading, such as H4. break the rules 1. Identify currency pairs that are moving in a trend environment, and first predict the direction of the trend based on the market background or support resistance 2. For example, the price is actively making higher highs or lower lows. In this case, the price may continue the current momentum until it reaches the next resistance or support level. In addition, any changes from important key levels A breakout of a stock market usually leads to a new uptrend or downtrend. 3. When the previous day's daily K-line closes, place a buy stop above the high or place a sell stop below the daily low. 4. Set the stop loss to 50% of the daily K-line 5. For the profit level, the moving average price of the last three days can be considered. For example, the daily K of the last three days shows fluctuations of 100 points, 50 points and 100 points, and the average fluctuation is 83 points. Daily High and Low Trading Strategy Example The chart below shows the Daily High Low Trading Strategy In the graph, we can see that the price moved up from an important support level, the daily close was above that support level, and a buy stop was taken on the daily close once the price was bullish from the key support level. The next day, buy with a stop loss, and the price moves to the take-profit level, which is obtained by calculating the average price of the last three K-lines. The stop loss is set at 50% of the previous day's K-line. If the stop loss is hit, it will indicate that the price will reverse or consolidate further. In this case, we should wait for a further breakthrough. Summarize First identify an intra-trend move or a possible new trend, place a buy stop above the candlestick if the price rises from support, and place a sell stop above the candlestick if the price falls from resistance. The stop loss should be 50% of the K-line of the previous day, and the take-profit will be the average fluctuation point of the K-line in the last three days. In this trading strategy, the challenge is to avoid market pullbacks and volatility, in which case one should study price action well, measure price momentum to determine possible moves, and moreover, to get the most out of this trading strategy , subject to strong money management rules.

Trading Technology Analysis

What is scalping? A beginners’ guide to scalping trading strategies

Chandan Gupta

Scalping is a style of trading that aims to profit from small price changes in financial markets. Instead of buying and holding positions over a long period of time, scalpers make fast profits off a high volume of shorter trades, often lasting just seconds or minutes. The theory behind the style is that smaller price moves are more frequent, and therefore easier to capture, than larger ones. By quickly entering and exiting larger positions, the smaller gains add up to the same level of profit from a normal day trade. By entering trades at a larger volume, even a profit of pennies would add up – but so does the risk associated with the position. Scalping requires a strict trading strategy, which sets out exactly when to enter and exit positions and how much capital will be put up on each position. An exit strategy is particularly important in scalping because allowing just one trade to run losses could eliminate a large portion of any capital gained. Scalp traders will make use of take-profit and stop-loss orders to automate these entry and exit targets. What is a scalper trader? A scalper trader is the name for an individual who uses the scalping trading style. Technically, scalpers are also day traders because they never hold positions open overnight, but there are a few traits that set them apart. Scalper traders are often extremely disciplined individuals, due to the need to be strict about how long they keep positions open. They have the complete opposite opinion of ‘let your profits run’ and will instead cut trades at very specific profit targets, and even more strict levels of loss. Scalpers would never wait to see whether a losing trade will turn into a winning one. A scalper trader will also need to be able to dedicate a lot of time to monitoring financial markets, given that a pure scalper would be entering dozens, if not hundreds, of trades each day. For this reason, it’s very rarely a style of trading adopted by beginners or part-time traders. Scalper traders can manually make decisions about when and what to trade, but they do usually overlap with the class of trader that prefers to automate their trading strategy. Due to the amount of work a successful scalping strategy takes, it can be more cost and time effective to use a computer program. This guarantees speed when it comes to entering and exiting positions and reduces the risk of trading based on emotions and biases. How does scalp trading work? Scalp trading works by buying and selling large quantities of an asset, but only holding the position for a short period of time. Scalp traders would either go long by buying low and selling high, or go short by selling high and buying low. Having both avenues of profit enables scalp traders to find a much wider range of opportunities across rising and falling markets. To make enough profit from such small movements, pure scalpers would be entering dozens, if not hundreds, of trades each day. This means they’ll need to dedicate a lot of time to monitoring financial markets, so it’s very rarely a style of trading adopted by beginners or part-time traders. Due to the amount of work a successful scalping strategy takes, it can be more cost and time effective to use a computer program. This guarantees speed when it comes to entering and exiting positions and reduces the risk of trading based on emotions and biases. Scalp trading can work manually, with traders making their own decisions about when and what to trade, but usually scalp traders choose to automate their trading strategy. Ultimately though, scalp trading looks different depending on the market you’re interested in. Let’s take a look at two of the most common asset classes: stocks and forex. Types of scalping strategies Broadly speaking, there are three main strategies that scalpers employ: High-volume trading - Scalpers will often buy in large quantities to make the most of a small move, sometimes just a couple of points. As mentioned previously, this approach requires enough liquidity for the full position to be opened and closed effectively and with a tight spread Breakout trading - Most scalping trading strategies will involve looking for breakouts, positioning your entry to a trade at the start of a breakout and riding the market move until the first exit signal is given off. This strategy is probably the most approachable, given it’s used across trading styles Trading the spread - Also known as market making, this is a strategy where scalpers attempt to profit on the spread itself by simultaneously buying and selling an asset. It relies on a market being relatively stable but still popular enough to experience deep liquidity. This is the most difficult strategy as the trader will be going up against much larger institutions and market makers While most traditional scalping techniques are based on going long, a realm of opportunities can be opened up by going short too – especially when it comes to market-making strategies that involve buying and selling. You can go long and short using derivative products, such as CFDs, options and futures.

SCALPING SECRETS

Foreign exchange speculation also needs a "formula"? Huiyou: It’s all bubbles

a leisurely leaf

Huihu once had a very popular question [more than 90% of the foreign exchange market is losing money, why don't you give up?], many Huihu friends believe that the main reason is that traders believe in the established rules. In particular, there is a set of theories that "traders must learn and do" circulating in the market. This set of theories seems to be very reasonable, but there are quite a lot of loopholes when carefully analyzed. The old man has collected the opinions of 8 foreign exchange friends to see if you have fallen into these trading "formulas"? "There must be a stop loss. 』 Huiyou 1: This sentence is like a constitution that stipulates every trader. Is it so important? Stop loss is possible, the key is that you have to be able to stop loss, stop loss is set up in order to prevent sudden risks when you can make orders and achieve profits, imagine that you are a trader who does not know the general direction, only How to set a stop loss for a person who looks at the 5-minute chart to make an order and runs away after making a profit of 20-30 points? Is the stop loss also set at 20-30 points? Almost every market start has a reverse action, which makes many friends slapped on both sides. In addition, the funds of novices are often less than 10,000 U.S. dollars. This amount of money is quickly exhausted in this turbulent market, and most of the losses are stopped. It is not impossible to set a stop loss. But you must know why and how to set a stop loss. If you set a stop loss at least at the stage high, 50 points away from the stage low, or even 200 points, then how much is your profit point? Do you run at 30-50 o'clock? It's just that the stop loss item is multiple dialectics, and the knowledge and practice inside can't be figured out without any brainpower. "To make orders, you must do short-term, ultra-short-term. 』 Huiyou 2: Friends often complain that every time you enter the market, it is a torment, and you are in torment every day. Are you addicted? Is the little money you earn worth your mental and physical exhaustion? Even if you want to do short-term, you also need to know the general direction, the middle direction in the general direction, and the small direction in the middle direction. For a group of small ants, seeing an elephant walk by each ant's feelings and descriptions are not the same, and they are not comprehensive. If you drive on an unsigned road and try to reach your goal based on blind guesses, what will be the result. If you look down from a helicopter, do you know it clearly? Struggling, fighting, and regretting every day. This has nothing to do with your skills. Many friends have never opened the weekly chart or monthly chart from the beginning of trading until they exit. The biggest cycle is to look at the hourly chart. If you want to make money, it is simply a fantasy. "Don't do it on Monday if there is no market, don't do it on Friday when it's too weird, don't hold overnight orders, let alone next week's orders. 』 Huiyou 3: This is due to the inevitable choice of short-term and ultra-short-term, which wastes a lot of time, and the time utilization rate is only 20%-30%. "Analyze financial news every day. 』 Huiyou 4: Can you analyze it clearly? Half of the news is news that deceives you with ulterior motives, and the other half of the news is after reading the K-line chart. In order to match the K-line chart, it is compiled after the fact. When you are afraid, you overturn your correct judgment. No matter how big the news is, it is just a drop in the ocean for the general trend. It doesn't matter if the yen lowers interest rates or the US dollar raises interest rates. "Get out of the market when you make some money, don't be jealous of the market in the future, make less money and have a good attitude. 』 Huiyou 5: It’s good to make a lot of money with a mentality, and it’s a good mentality to make a lot of capital. Why lie to yourself, is it a bad mentality to make more money? 『Self-study technology, study MACD, moving average, golden cross, dead cross, wave theory. 』 Huiyou 6: It’s not that these indicators are deceiving, it’s that you don’t know how to read them at all. These things come out, lag behind, and are dialectical. Different market conditions depend on different levels and time periods. It will be invalid at other time periods, or even in the opposite direction. These things will not make you money. 『Only direct trading, not cross trading. 』 Huiyou 7: The reason is that cross trading is too risky, which is a joke. The biggest charm of this investment is the return in risk. Of course, if you let ordinary people fly airplanes, the risk is high, not big, but death. But you let the pilot drive it? "Xiao Cang, small order, only use 1% of the capital to make it. 』 Huiyou 8: That’s wrong. Funds must be fully utilized, but insurance must also be used. How to fully utilize them is to use trading rules and make full use of trading rules. From the avenue to the simplicity, foreign exchange speculation is a metaphysics, which can be said to be both profound and simple. If you disagree with the above opinions collected by the old man, please comment to express your views. In addition, do other Huiyou have a trading "formula" that they do not recognize? Everyone can communicate with each other~ I hope that this article can make the trading novice "let himself go" reasonably, and inspire the masters to "extremely long play"! Kind tips: From Sunday (March 29), many European countries began to implement daylight saving time until October 25, and the trading hours of European financial markets were advanced one hour. Daylight saving time: open at 5:00 am on Monday to close at 5:00 am on Saturday, Beijing time Winter time: open at 6:00 am on Monday, Beijing time and close at 6:00 am on Saturday

Forex you don't know

What process will the transaction go through from the beginning of pure novice?

muzi trading

How does a novice Xiaobai learn foreign exchange trading? Let me summarize the process that foreign exchange trading will go through from a pure white. 1. Proficiency in the operation of foreign exchange transactions This includes several aspects: 1. Proficiency in trading software (this is the foundation and there is nothing to talk about). 2. Understand the main trading hours. 3. Understanding of foreign exchange contracts. I believe that now it is basically operated by platform operators, and it is rare to open an account in a bank. To trade foreign exchange, it is necessary to clarify the contract value, leverage, and margin calculation of foreign exchange contracts. This is very important, because it concerns the calculation of positions (position management). 2. Learn 2-3 mainstream indicators (such as K line, moving average, Sto is kdj, Bollinger, etc.) Why do you say to learn 2-3 indicators instead of asking you to learn a lot of indicators? Trading does not rely on indicators at the end. If you know too many indicators, you will not be able to get out if you get stuck later. Learning 2-3 indicators is to give you a basis for placing orders in the early stage. For learning this indicator, you can read the book introducing mainstream indicators or find someone who is a little proficient in the use of several mainstream indicators in this industry to explain it to you. Understand the most basic usage of several indicators, and remember not to dig deeper into the use of indicators . . Many people say that it is useless to read this book or that book, the book of this great master or that great master. Those books are valuable, but they are not what you should read at this stage. Just like "Memoirs of a Stock Operator" if you read it, you will only read it as a story, and you have no way to understand the things in it. 3. After understanding a few basic indicators, the simulated disk simulation exercise It is very easy to open a demo account for the next mt4. At this time, you need to understand that the demo account is not for you to learn how much money you can make, but to be proficient in the use of those indicators. This time can be long or short, as fast as a few days or a week. 4. Understand several economic data that often appear in foreign exchange I am proficient in the operation of the analog disk, and have a basic basis for placing orders. Next, it's time to learn about several common national economic data and news events. For example: non-agricultural, US index, ADP, GDP, initial applications, CPI, PPI, PMI, QE, interest rate resolutions, central bank meetings, etc. Understand the short-term impact of these news on the market, but remember to let you understand, not to trade based on this. Because these news are time-sensitive, the impact on the market trend is within a certain period of time, and how long this time-limitation is, let alone a novice or a master, it is difficult to judge. Since the trade is not based on this area, why do you want to understand the news? There is only one purpose. Most novices do not understand position management, and the positions will be relatively heavy. Make an order when the data is released. (Those who like to bet on data say otherwise) This process is about 1-2 weeks enough. 5. Open a micro firm account There is almost a month of study preparation time ahead, and I can be regarded as having a relatively comprehensive understanding of foreign exchange trading. Next, you can open a micro firm account, such as $100 or $200. Here is a suggestion, the account should not exceed 500 US dollars, and every time you place an order, place 0.01 lots. Remember, only place 0.01 lots. Stick to it for half a year. If you can stick to what I just mentioned for half a year, you will definitely thank me for this sentence. Haste makes waste, and there are three functions for you to do this, one is to keep you alive, and you will not suffer heavy losses; the other is to dilute your gambling nature and cultivate strict discipline for you instead of gambling for quick money . Foreign exchange margin trading is like electronic drugs, let alone how strong your resistance is, people's desires cannot be controlled. In the first half of the year, it is not impolite to say that you want to get rich through foreign exchange trading, but it may be close to zero; third, the mentality of the real offer and the simulated offer are different. You adjust your mentality to gradually deepen your understanding and perception of foreign exchange margin trading. 6. Communication The communication mentioned here is not communication in the ordinary sense. In the first half a year, you will definitely have exchanges with people in the industry, but at that time you yourself did not have a deep comprehension and understanding of trading. The so-called theoretical misleading of people with half a bucket of water, or they simply cannot understand the sentiments of those powerful traders. It is difficult to communicate with different levels of understanding. For example, when I say that trading is not to predict the trend, but to respond to the trend, how many people can understand? In the minds of a large number of retail investors, whoever judges the market trend is accurate will be awesome, but what about the truth? Expert exchanges never talk about how to predict market trends. If you can endure the days when you only made 0.01 moves in the first 6 months, I believe you will feel enlightened when you communicate with those awesome people in half a year. Only at this time can you really enter the threshold of foreign exchange trading. But I know that people nowadays are too eager for quick success and too impetuous, and there is no one in a hundred who can do it for 6 months. 7. Explore and build your own trading system After the first half year of real trading practice, and the communication with the master later, the understanding of trading has reached a new stage at this time. Summarize the trading records of more than half a year, find out the reasons for your own profits and losses, and think about how to make it as possible as possible To avoid losses, the trading system will gradually generate ideas. 8. Establish a trading system and strictly implement it It is difficult to build your own trading system, but it is not easy. Some people can do it in a few months, and some people can't complete it in a lifetime. Look at personal opportunity and understanding. Once you really build your own preliminary trading system, what you need to do later is to strictly implement and continuously improve your system. Make stable profits. Nine, flexible use Use it flexibly, with a system in mind, but without a system in mind. To put it simply, I can flexibly use different systems to deal with different market conditions. This level is my goal, and I haven't reached it myself. I'm still in the process of perfecting this stage, so I'm not qualified to make too many comments. The above is my summary of my own experience in foreign exchange trading. I feel that there are several processes that novices can refer to for advanced. They are not suitable for everyone and are for reference only. Here are some suggestions for newcomers: 1. Don't be greedy. Don't learn too many indicators. After all, you have to dilute these indicators later. 2. Instead of spending a lot of time reading books that are recommended by others and you have finished reading them, it is better to spend time on practice and research. Those books can only be gained after you have reached a certain level and read them. As for those books about technical analysis, it is a waste of time. 3. Believe me, you will definitely lose money in the future, so remember, you must take a light position and keep bullets for yourself before you can make stable profits. Don't wait until you feel that you can make a stable profit but you have no money. As for light positions, here is a standard. For newcomers, the account of 10,000 US dollars should not exceed 0.1 lot, and all accounts below 1,000 US dollars should use 0.01 lot. In the later stage, if you have a certain level, you need to increase your position, another thing to say. This process is a process of letting yourself learn, not a process of making money, so remember! 4. Those half a year is a threshold. If you can’t pass it, just stay away from this market completely. Not everyone is suitable. Don’t force it when you can’t do it. 5. If you have passed the threshold of half a year, congratulations, remember one sentence at this time: trading is not the whole of life, learn to return to life. Finally, I wish all newcomers and friends who have entered or plan to enter this industry can survive in this market longer .

The Investment Philosophy in Sun Tzu's Art of War

the god of wealth has a way

I will start with the article on military struggle. Due to time and space constraints, readers and friends may not be able to fully express the meaning of the text. Please forgive me. If you have any questions, please leave a message. I will answer you as soon as possible. Begin the discussion of the body part. Sun Tzu said: The method of using troops is to be ordered by the emperor, to unite the army and gather the masses, to join forces and give up, nothing is more difficult than armies fighting. Those who are in trouble in the military struggle, use detours as straightness, and take advantage of adversity. When we determine the trading variety, from the acquisition, screening, integration, market research and judgment of the entire transaction information to the synthesis of the trading plan, and then to the final transaction execution, I think the most difficult thing in the whole process is how to make the transaction before the transaction. Being able to use this information very efficiently and with high quality provides a winning opportunity for the success probability of the next transaction. If you want to gain a chance to win, the most difficult thing is how to turn the disadvantage into something that is beneficial to you. For example, we can't always find a better entry position and exit position. At this time, we can refer to the speculative sentiment of retail investors and institutions The position report and the trading strategy given by some intelligent trading signals. In addition, the shock indicator can also be used as a good emotional indicator for short-term trading. Finally, combined with your own thinking and comprehensive research and judgment, you can increase the profit probability of your trading strategy. After completing the transaction In your free time, you should strengthen your weak learning, which will help you better gain a preemptive advantage next time. Therefore, those who don't know the plans of the princes can't hesitate to make friends; those who don't know the mountains, forests, dangers, and depressions can't march; I think many traders come here because of the smell of high-yield foreign exchange, so many friends who enter this market start with high expectations or take a heavy position shortly after entering to win a "huge profit" and think that they are trading However, it turns out that many people are suffering from blood loss. We all know that in order to win, you must first understand: have you seriously understood the trading industry? Have you learned knowledge systematically? Know your strengths and weaknesses? Do you know what conditions are required to survive in this market and obtain good returns? Did you know your opponent before placing an order? Have you ever understood the difficulties faced in sticking to the road of trading? The last thing I want to emphasize is that I think it is very important that "you can't get benefits without a guide". It means that without a guide, you can't use the terrain effectively. Then, did you worship your teacher before starting the transaction? How about humbly seeking advice from teachers with real materials? Have you ever learned from experienced and capable teachers during the transaction process? Having good teachers and helpful friends before opening the way will help you get a head start. Military contention is for profit, and military contention is for danger. It is not enough to raise an army to fight for profits, and it is too much to donate if you entrust the army to fight for profits. That's why when you roll your armor and move forward, stay away day and night, double the road and go at the same time, if you fight for profit for a hundred miles, you will capture three generals. , the method is half to the end; if it is thirty li to fight for profit, then two-thirds is to the end. Therefore, if the army has no supplies, it will perish, if there is no food, it will perish, and if there is no accumulation, it will perish. Although trading can bring us huge returns, its risks are also the same. In trading, many of our novices and some friends who have been trading for a long time always like to trade heavily in the hope of earning a lot of money. In the end, most of them not only fail to achieve the expected return, but also end up in a mess, thus losing many better trading opportunities; Some traders friends are completely light-packed, there is no content or lack of content in their stomachs, so they also end up in tears; in addition, some traders friends always rush into the market and start without planning the whole transaction After placing an order, I felt a lot of painful tossing in my heart, and finally made the whole person depressed, and the vain dollars fell into other people's pockets; there are also some traders who always like to trade all the time, hoping to seize every trading opportunity and earn every dollar. Divide money, trade frequently in the market, and end up losing a lot of money and feeling disheartened. Therefore, before we make a transaction, we must have a wealth of knowledge and practice that can stand the test so that we can achieve better results in the transaction. Therefore, soldiers use deceit to establish, use profit to move, and use division and harmony as change. Therefore, it is as swift as the wind, as slow as the forest, as plundering as fire, as immovable as a mountain, as difficult to know as cloud, as moving as thunder. To plunder the villages and divide the masses, to distribute the profits broadly, and to move by hanging power. The prophet's straightforward plan wins, and this is the method of military struggle. In trading practice, we should grasp the side that can be seen clearly and is beneficial to ourselves. Before placing an order, we must evaluate the pros and cons of the entire transaction. For example, we should judge how we should allocate trading funds based on market research. It is better to distribute part of it and place it in the opposite variety or add another variety to reduce the risk. When we have made up our minds, we should lurk and wait for the opportunity when the market has not come. When the opportunity comes, we should attack decisively. If this transaction can bring us rich returns, then we should think about another question: These profit distributions maximize their interests and ultimately increase their wealth. I think this issue is worth pondering. "Military Administration" said: "If you don't hear each other, it's the golden drum; if you don't see each other, it's the banner." The golden drum is the eyes and ears of the people. Since the people are single-minded, the brave cannot advance alone, and the timid cannot retreat alone. This is the method of using the crowd. Therefore, there are many golden drums in night battles, and many banners in day battles, so people's eyes and ears are changed. In real trading, many traders and friends violate the consistency principle of trading, such as using the same take-profit and stop-loss points when trading in different frameworks, using the same strategy in different trading sessions, and the general command operations will be based on different Situations use different things to convey different operational instructions, we should also analyze the specific situation in detail, adapt measures to local conditions, and adapt measures to current conditions is the way to win. Finally, what I want to share with you here is that as a trader, we must learn how to take the initiative to grasp the disadvantages of information and turn it into benefits. We must be as decisive as the general in giving orders, and as brave as the soldiers in combat, so that we can survive in this market and live a better life.

Only when wealth gathers can it be dispersed and wealth can be gathered

Knowledge Popularization: Dollar Circulation

起止点

In recent years, a new term has emerged --- dollar circulation. Many people do not have a clear understanding of the dollar circulation, and even the word gives people a very vague feeling. But the issue of dollar circulation has to be discussed, because the dollar circulation is a key to understanding many problems in the global economy. Why do the currencies of various countries depreciate relative to the dollar, the dollar has appreciated sharply, and why are the economies of various countries in recession? These are all related to the dollar circulation. Therefore, the establishment of a logical framework for dollar circulation can better understand problems and understand the market. Reasons for the formation of the dollar circulation We all know the ocean circulation. Similarly, there is also a currency circulation, which can be called the dollar circulation. Why do global currencies exist in the global economic circulation system in the form of US dollars? This is mainly due to the dominance of the US dollar in the post-war global monetary system. The main driving force of dollar circulation is the difference in investment yield. When talking about this point, two important knowledge modules have actually been involved. The first knowledge module, when did the U.S. dollar dominate after the war? It was during World War II that the Bretton Woods system that emerged in 1944 established the dominance of the U.S. dollar. The global currency is linked to the U.S. dollar, and the U.S. dollar is linked to the gold behind it, forming a currency mechanism centered around the U.S. dollar. The second knowledge module involves the history of the world reserve currency. What is the world reserve currency? What kind of currency can become the world's reserve currency? To sum up, there are three points. Conditions for becoming a world reserve currency This currency must have a high degree of liquidity, what is liquidity? When the assets in hand are sold in the market, everyone will scramble to grab them, and no one will refuse to accept them. The stronger this ability, the better the liquidity. Gold has historically had the highest liquidity. In addition, there is the most convenient exchangeability, which is to exchange any assets with it, and the cost is very low. The third element is that it has the highest international recognition, that is, everyone has formed a convention in history to recognize it as a reserve currency asset. For example, gold has the above three conditions at the same time. Now it's dollars. In the nearly 500 years of currency reserve history, Portugal, its currency was the first to become a reserve currency. From 1450 to 1530, it lasted for 80 years, then Spain, then the Netherlands, then France, and then the United Kingdom. After 1921, the position of the pound was gradually replaced by the dollar. With the above foreshadowing, we can better understand the dollar circulation. Dollar circulation continues When did the latest round of dollar circulation start? Year 2008. To be exact, after the outbreak of the financial crisis in 2008. Because the United States is facing the risk of bankruptcy of financial institutions (including some large banks). In order to save the banking system, the Federal Reserve launched the quantitative easing policy, hoping to push them back to profitability. This process starts a new round of thermal circulation of the dollar, and the dollar begins to flow from the United States to other countries. In the final analysis, thermal circulation flows from low-yield assets to high-yield assets, or from low-risk areas to high-risk areas. This is a problem that has emerged after 2009. Because after the United States carried out quantitative easing, the interest rate was gradually reduced to 0. In this case, a large number of dollars occupy the U.S. market, and the United States will face the dilemma of deteriorating yields. what to do? These funds have to go overseas to find assets with higher yields and higher risks for investment, which has caused a large flow of dollars from the United States to the world. After the dollar flocks to the world, it will inevitably lead to the expansion of the national currencies of various countries, which will induce asset price inflation in various countries. Many assets in the financial markets will rise sharply. For example, the current rate of return in the United States is 1%, while the rate of return in China is 8%, then the money will flow to China. The key is how? For some Chinese companies, the cost of borrowing and financing in China is too high. If they issue US dollar bonds internationally, or borrow from US banking institutions, the interest rate is very low (after all, the Federal Reserve tends to 0 interest rate), so A large number of Chinese companies will borrow U.S. dollars. After they borrow the money, they exist in the form of U.S. dollars and cannot be directly consumed or invested in China. How to do it? China has a foreign exchange settlement system, and these U.S. dollars are sold by companies to Chinese banks, and these banks get U.S. dollars, and finally sell them to the central bank, and finally form China's foreign exchange reserves. After the central bank had these foreign exchange reserves, it began to issue more RMB. For example, if you collect one dollar in US dollars, issue 6 yuan in renminbi, and then hand over the renminbi to these companies, and these companies can invest. In this process, China's foreign exchange reserves will definitely rise sharply, and at the same time, the domestic currency will also undergo a large-scale expansion. Pay attention to the process. When U.S. dollars flow into any country on a large scale, no matter what kind of settlement system the country’s central bank adopts, as long as the local currency does not want to appreciate sharply against the U.S. dollar, it will inevitably purchase U.S. dollars on a large scale and depress the value of the local currency. Therefore, this process will definitely lead to the over-issuance of national currencies in various countries. Like China, there are other emerging market countries have such a situation. What is the result of over-issuance of local currency? If there is more currency, the excess currency will definitely chase limited assets, which will cause asset prices to rise. So in this process, after 2009, various countries experienced asset price inflation. QE In fact, two important knowledge modules are involved. The first is the quantitative easing we are talking about, commonly known as QE. What is QE? If you don't understand the process of QE, you can't understand why the dollar was created and flowed to the world. To put it simply, the process of QE is that the central bank prints money and buys the two most important financial assets on a large scale in the financial market. For example, if the printed U.S. dollars are exchanged for treasury bonds and mortgage bonds held by some financial institutions, the U.S. dollars will flow out. These financial assets bought at the same time inflated the Fed's balance sheet, which means that the currency printed by the Fed to buy these assets is actually an exchange. Assets come in and money goes out, so the entire balance sheet will be inflated. swell. At the same time, a large amount of U.S. dollar cash will be injected into these financial institutions. After these financial institutions get the cash, the biggest dilemma is that the US treasury bonds or bonds held by the two companies in the past have some interest income, but now these financial assets are turned into This is a big hassle for financial institutions. There is interest income when holding assets, but no cash, what should I do? You must know that these financial institutions also borrow other people's money, and then earn their own money, playing a game of funds. Therefore, when it is not possible to hold assets with interest income, it is impossible to give investors a rate of return, which forces these financial institutions to look for assets with higher yields overseas. This is how they make money by taking the interest rate difference between the cost of financing and the rate of return. Functions of the bank In addition to this, there is also a knowledge module, how is the dollar created? This involves the fractional reserve system. A very important function of the banking system is to carry out monetary expansion. Many people may not understand that banks just collect people's savings and then lend them out? It's just a function of it. One of the most important functions is the issuance of bank currency. In fact, most of the currencies in the market are created by banks. Like bank checks, bank deposits, etc., exist in this form. The M2 we often talk about is actually created by banks. The asset prices of various countries are constantly rising due to the expansion of their currencies, and at the same time it has another effect, which is to make the debts of each country rise simultaneously, which involves another concept. Rising asset prices lead to rising liabilities Why does rising asset prices lead to rising liabilities? Let's take an example: Assuming that the house price at that time in 2009 was 20,000 per square meter, if you bought 100 square meters, it would cost 2 million. However, due to the rise in real estate prices, the house price has changed from 20,000 to 40,000, and the house price of 100 square meters will rise from 2 million to 4 million, doubling. But within the same period of time, it is impossible to double your income, what should you do? That means you have to take out more mortgages to be able to afford a house. For example, it was enough to borrow 1.5 million in the past, but now you may have to borrow 3 million. This doubling speed exceeds the speed of your income growth, so the debt ratio of your personal debt has risen sharply. This principle is the same for the whole country, because the country is composed of countless people. If every person or enterprise is in this situation, the total debt ratio of the whole country will rise sharply. What is the total debt in the world now? The average total debt is about 286%, but what is the ratio of China's total debt divided by GDP? It is 282%. In other words, the debt ratios of China and the whole world are similar, and these debt ratios are actually higher than before the financial crisis, which also makes all countries in a highly indebted situation. Under this kind of debt pressure, every country's economy has to bear heavy debts, so the development speed will be relatively slowed down. This is a basic manifestation of the new normal. Due to US dollar liabilities, companies in various countries will borrow US dollars on a large scale in the international market, which will form the accumulation of US dollar liabilities. Of course, this kind of dollar debt has formed local debt within each country, so the two kinds of debt exist at the same time, pushing up the debt ratio together. This raises a question, what problems will arise when the dollar debt is gradually expanding? When the interest rate in the United States is very low and quantitative easing continues to run, that is, when the Federal Reserve keeps printing new banknotes and injecting new dollars into the international market, everything is fine, because it is very convenient to borrow dollars and borrow new money. Debts are repaid, and the debt rollover can be maintained continuously. reversal of circulation But when the United States stops quantitative easing and no new dollars flood into the international market, it will become more and more difficult to obtain dollars, eventually forming what we call a dollar shortage. There will be a problem. When the US dollar debt expands to a certain extent, the US dollar debt will form an inverted pyramid, and the high degree of debt will oppress the limited liquidity (that is, limited cash). What will happen in the end? When the U.S. dollar cannot be found, the only option is to sell assets to obtain cash, and then exchange it with local currency. In this process, the dollar will automatically form a scarcity of dollars, and this scarcity will automatically push up the value of the dollar. Because there are too many U.S. dollar debts, once new U.S. dollars cannot be obtained to repay old debts, a strong U.S. dollar will inevitably occur. This has nothing to do with whether the U.S. economy is good or bad. If the U.S. economy grows by 2%, the dollar will be strong, and if the U.S. economy grows by 2%, it will also be strong. This is caused by the supply and demand formed by the global currency mechanism, and it is a logical necessity. From a data point of view, in September 2014, the Bank for International Settlements issued a report that the total US dollar liabilities outside the United States had reached 9.2 trillion at that time, a significant increase of 50% compared to 2009. This new debt is mainly from the Asian region and emerging market countries. The U.S. dollar liabilities of emerging market countries reached $5.7 trillion. Among the US$5.7 trillion in liabilities, most of them are US dollar loans, and some are US dollar bonds, which together constitute a huge US$5.7 trillion in US dollar liabilities. Among them, the total amount of debts borrowed by Chinese enterprises in US dollars is as high as 1.4 trillion US dollars. Borrowing so many U.S. dollars, and various countries have not effectively hedged the borrowing of U.S. dollars. This creates a problem: once the direction of the dollar circulation is reversed, and the hot circulation turns into a cold circulation, it will cause a major dollar solvency crisis. The dollar circulation is cooling, what does it mean? It means that the global dollar will gradually cool and shrink, and those people or institutions around the world who are locked up in dollar liabilities must find dollar cash in the market, otherwise they will not be able to repay their debts. With the dollar shrinking, it is difficult to find enough dollar cash, and the process becomes a vicious circle. Everyone is scrambling to sell their assets, to run on the dollar reserves of central banks of various countries, and to repay the debts in dollars, which will lead to the depreciation of the local currency, the central bank reserves will be run, and at the same time the financial markets of various countries will start to turmoil. These vicious circles will gradually bite each other. Together, in this process, they will jointly promote the continuous appreciation of the dollar. Cold circulation coming In July 2014, this was an important inflection point, because in this month the circulation of the US dollar began to cool, and the foreign exchange reserves of central banks around the world fell from the peak. This situation only appeared during the 2008 financial crisis. When the central bank's total reserves begin to shrink, it means that the local currencies of various countries will face strong contraction pressure. Because for each country (including China), foreign exchange reserves are basically an important basis for issuing local currency, and this phenomenon is especially obvious in China. Therefore, when the foreign exchange reserves begin to decrease, there will inevitably be a severe currency contraction. Under such circumstances, there will be problems in the economies of various countries. If you look at the main indicators in the figure below, you will find a very obvious similarity, that is, the time is highly focused on July 2014. For example, oil prices, it was in July 2014 that oil prices began to plummet; similarly, around July 2014, to be precise in May, many commodities other than oil began to plummet turning point. In July 2014, global trade began to shrink, and the total volume and value of global trade began to decline sharply. This is not an isolated phenomenon. It was also in July 2014 that the U.S. dollar began to strengthen. When the total global currency reserves began to shrink, when everyone faced the reduction of the Federal Reserve’s U.S. dollar liquidity, or stopped supplying the same amount of newly added U.S. dollars to the international market, 92,000 The reality of the huge US dollar debt problem has become increasingly prominent, exerting increasing pressure. Under this kind of pressure, the countries bearing dollar debts want to repay their debts as much as possible, so as to reduce this pressure, it counts as much as it can reduce. This is the fundamental reason why the US dollar began to strengthen sharply in July 2014. When the entire circulation system is known, there will be an overall understanding of the exchange rate of the US dollar, including the exchange rates of various countries relative to the US dollar. The currencies of various countries are depreciating against the US dollar. Why? In fact, the fundamental reason is that the dollar circulation began to reverse. (Of course, with the advent of the epidemic, the Federal Reserve and various central banks have loosened one after another, and the dollar circulation has once again turned into a thermal circulation, but how long it can last is a big question mark. It may be only temporary, or it may be completely reversed)

Trading Psychology: Learn the Skills to Overcome Floating Loss Trading

a camel carries a thousand kilograms and an ant carries a grain

Floating losses, which often happen to traders of major currency pairs, are one of the trading situations we least want to see or face. Today we will talk about the topic of "floating loss". How did the floating loss arise? Here is the daily chart. Prices found support after a long bearish move, creating a bullish engulfing pattern. Using the daily H4 combo, traders should tune to the H4 chart for consolidation and get a bullish reversal candle well above the last swing high. At this point you may quickly take control measures. A huge bullish engulfing candle followed by an inside bearish candle may tempt you to go long on another bullish engulfing candle, at which point the chart may produce a signal candle at any time. But it does not generate signal candles immediately. After a while it produces a bullish engulfing candle that closes above the last swing high. This is an A+ trade setup as far as daily H4 chart combo trading is concerned. The price performs a deep consolidation and subsequently produces a signal candle. This is what breakout traders like to see. A long entry may be triggered after the last candle closes. This must be painful for us. The trade setup looked pretty good, but things didn't work out as expected. In this case, should we continue to let the market go or close the transaction manually? If you choose to close your trades manually, I personally think it's a bad decision. Once the transaction is floating on the loss, let it go according to your trading strategy to improve. If it hits the stop loss, let it stop the loss. This is the risk you should take. When encountering floating losses, we generally have the following psychology: 1. I set a stop loss. I am afraid that the market will sweep the losses, and I am even more afraid that the market will turn back after sweeping the stop loss! 2. If you don't set a stop loss, you will worry about what to do if the market continues like this? If the market outlook is unilateral, wouldn't the loss be more? 3. Always feel that the market may come back, wait and see! 4. I often hesitate, is the stop loss set now appropriate? Do you want to change it? 5. There are so many floating losses, just cut it off, in case of more losses, cut it off in advance before sweeping the stop loss! In fact, it is very normal to have these mentalities, and I often commit them. Now that we have found the problem, we have to solve it, so how to overcome the bad psychology of floating and losing? First analyze the reasons for floating losses. 1. Does the floating loss order follow the trend? Which cycle trend is it following? 2. Trading pays attention to following the trend, so should you pay attention to "following" or "doing"? 3. The trend is correct, what is the reason for the floating loss? 4. Is the stop loss setting reasonable? 5. How to set the stop loss if it is unreasonable? According to which period setting? Then fix it. 1. Determine the trend cycle and the order cycle The trend is irreversible, as long as the trend is correct, everything is easy to say. After determining the trend, it is very important to analyze what cycle to use when placing an order. For example: I use the daily chart to analyze the market, determine the trend, enter the market according to the hourly chart, and then the account is contrary to my analysis, and there is a floating loss. Looking back at the analysis, I found that the trend of the daily chart has not changed. The reason for the floating loss appears on the hourly chart, and the market just rebounded in the hour, so how do I deal with this problem? If the trend is correct, I will check the stop loss. If the stop loss setting is also reasonable, stick to my principle, and if the loss is swept, it means that I have not entered the market well and admit defeat. If it is found that there is no trend, it is just a rebound on the hourly chart, and the market returns to the trend of the daily chart, then decisively cut it off! This is the small trend conforming to the big trend. 2. Don't look at the cycle randomly, if there are too many, there will be chaos When there is a floating loss, it is very important to judge the market again. The K-line chart changes with time. Your technical analysis may only be suitable for placing an order. It does not mean that the market will follow your path. It is necessary to adjust your analysis appropriately. But a word of caution: don't look at this cycle, then look at that cycle! The time span of the large-cycle trend is large (less clutter), and there are many small trends (more clutter). There is an hourly trend in 1 hour, and a 4-hour trend in 4 hours. 1 and 4 are not necessarily the same, of course they are the same as the big cycle The trend is not necessarily the same, so when analyzing again, you must figure out the principles of your analysis. 3. Don’t put your eyes on the jumping float Floating and staring at that number is the dumbest thing to do. I used to do this often, in fact, it was creating pressure on myself. A general psychology: when you are in a good mood, your trading success rate will increase; when you are in a bad mood, the probability of making mistakes will increase. Your own strategy is correct, just look at the market trend. There should be other floating loss psychology and coping skills. I can only summarize so much for the time being. If you have a good method, you can share it. Let's discuss it together and make progress together.

Forex Knowledge Encyclopedia

Detailed processing of data market

devil uncle k

When it comes to data market traders, nothing is more exciting than "non-agricultural data". The appearance of non-agricultural data directly shows that the economic environment of the United States also indirectly affects the trend of the US dollar index, gold and other commodities and currencies. The non-agricultural data is a double-edged sword. Most moderate traders will stay away from the announcement of this kind of data and choose to spend short positions. There is another group of traders who will lurk before the data is released and then attack at any time. And our topic today is to talk about the market trend performance and how to deal with it when the non-agricultural situation occurs. (This article will take EURUSD as an example) 1. Identify the market position of the variety. Before the data is released, it is necessary to observe where the current market is in the relative cycle, and then conduct a general analysis of the overall market trend. 1. Be clear about the long-short situation of the current market in the main cycle you are trading. 2. Pay attention to the daily volatility of the market of the day and whether the market is trending or oscillating. If the market is oscillating with small volatility, there is a high probability that there will be a wave of trending market when the non-agricultural situation occurs. 3. If the market of the day is a trending market, then you need to switch to the big cycle to find out how much room there is for the support pressure of the specific big cycle in the current market position, and compare these spaces with the volatility of the market that broke out in the day refer to. The key thing to pay attention to is whether there is a resonance position at the support pressure level of the large cycle, which is to prove whether the position is strong and effective. 2. Signal optimization based on statistical morphological characteristics does not have a great impact on the data market in the large cycle, because the stability of the large cycle will filter out a lot of noise in the small cycle, but the large fluctuations in the key positions of the small cycle are very important It may be the start of a small trend, so next I will mainly show some morphological statistics about EURUSD at 15 minutes and 5 minutes. Some of the above patterns are basically the patterns that appeared in EURUSD after the non-agricultural situation. how to deal with it. Scenario 1 : The market on the non-agricultural day has been fluctuating in a small range, so we should pay attention to whether there will be an explosive market when the non-agricultural news is announced. Case 2 handling method : the market on the non-agricultural day has already had a trend. When the non-agricultural news is announced, we need to pay attention to whether the market will reverse or continue to fluctuate slightly along the afternoon market. Case 3 handling method : When the non-agricultural data is released, there is no outbreak of the market. When the market noise is particularly loud, we use our own systematic fund management for risk control. Frequent trading in this situation is not recommended. 3. The fund management of the data market. Everyone's fund management is determined according to their own system. It can be defined according to their own single retracement or they can control their positions according to some retracement point ranges. When the market breaks out when the data occurs, traders can use the 38.2 position of the Fibonacci dividing line to make a hard stop loss. 1. There is a bottom order before the data is released : traders can use it to reserve a part of the non-agricultural position according to the specific situation of their account. If the market moves in the direction of your bottom order, then you can rest assured. If the sudden outbreak is in the opposite direction to your bottom order, my suggestion is that the profit of your bottom order should be relatively equal to your data loss order, so that it will not cause too much damage. Because everyone's system is different, money management is also different. 2. When there is no bottom order : You need to make statistics about the approximate range of the stop loss amount of your past data market, and then adjust your position according to these amount ranges. After all, the risk of the data market is relatively high, so it is not recommended for traders to gamble on the data, it is more important to survive in this market. The data market is a double-edged sword with advantages and disadvantages. In this article, we did not discuss the news of the fundamentals, but used the technical aspects to figure out how to deal with these more complicated trends based on the market trend. The appearance of non-agricultural data in the system of some traders is the breaking point of profit, but we must also bear in mind that risk is always the first in the process of trading, and history will not completely repeat itself, but when some key patterns appear, it is big Probability will follow a similar trend. The most important thing is to determine some risks in transactions according to your own risk control.

How to judge long and short when trading?

起止点

There should be no objection to my saying that one of the things that traders are doing all the time is identifying longs and shorts. We are bullish and bearish, what are we looking at? Whether you read the news or read transaction information (price, trading volume, positions, etc.), these data reflect the mainstream expectations of the market, or sentiment. This emotion is divided into two directions, one is more and the other is empty. The market rarely reaches a complete consensus. In most cases, the phased long and short are interchangeable, and they are relatively evenly matched. In most cases, the market is volatile rather than trendy. The same is true for any variety, including economic data. In most cases, it is relatively stable, with mutual conversion between long and short, and rarely produces continuous trend changes in a certain direction. In this case, we will find that in 70% of the cases, the price data of most varieties is volatile, and only in 30% of the cases, there will be a trending market. The so-called trend is generally when a consensus is formed, but this situation is relatively rare. Therefore, both bulls and bears in the market have their own logic. Traders should not have any opinions themselves, but analyze the opinions of both sides of the market. To gauge which of the bulls and bears is more tenable, and which one is likely to be confirmed or disproved, you can use their views. The logic of judging which side is long and short is untenable, and it must be reasoned from the perspective of system framework and variety variables. But the opponent's expectations are not necessarily completely wrong. This is what I just said. The ideas of both long and short sides are not necessarily right or wrong, because the facts are based on the future, and the future is changing. Yes, and at the same time, it will be confirmed and disproved by the data at that time in the future. What is the most common situation? It means that the matching cycle is different. What does that mean? For example, bulls think the economy is fine, while bears think the economy is broken. What is the most common situation in reality? In the long run, the economy is fine, but in the short term there are indeed blows, so the difference between long and short is formed. That is to say, the time period for bulls to look at is longer, and the period for bears to look at is shorter, so this kind of divergence has arisen. After clarifying this point, you will understand that there is a high probability that the market will form a downshoot first, and then continue to repair the upstroke. When you understand the logic of the long and short sides, you can reason about the mid-line and short-term situations. Therefore, it is necessary to distinguish under what circumstances, which data and which events will confirm and falsify the logic of both long and short sides. When the time for confirmation or falsification comes, the party that is falsified will change direction. For example, at this point, if the short position is falsified, he will turn around and close the short position. In fact, he will become a passive long position. At this time, the direction of the long position will strengthen, the long position will turn around, and the market will form. Consensus, the price will change direction. The degree of persistence after the transformation is based on the nature of the event, the length of the falsified expectation, and the degree to which the falsified expectation was previously accepted. These three points determine how long the bulls last after the bears are falsified, including how big the range is. In the figure below, the red line represents the price of the asset. It has a oscillating trend. What does this trend actually mean? The blue line above represents the logic of the bears, because at this point the bulls will stop following, and the bears will come down. The green line below, which is the connection of the low points, represents the logic of the bulls. Once here, the shorts will not be sold, and the bulls will start to enter the market. But as I said before, it will not last, and this expectation will definitely be confirmed or falsified at some point. As time goes by, for example, after passing the first four points and reaching the fifth point, when the market goes up again and reaches a simple critical point of confirmation and falsification, there are two situations here. Let me talk about the first case first, that one of the long or short sides has been falsified. Assuming that the short position is falsified, the short position will become empty, and the short position will become long when the short position is closed. After that, the long position will strengthen, and the consensus of the long position will be formed, and it will definitely break through upwards. This means that expected changes, confirmation and falsification are reflected in the price. Not to mention the other direction. If the short position is confirmed, the long position will be closed, and the short position will be broken down. Another situation is that when this time point is reached, instead of simply confirming or falsifying previous events or data, a new logical variable will be generated. New logical variables come from several aspects, such as the generation of a new data, a new policy or a new event, a new logical variable will be formed, and the new logical variable will generate new long and empty increments. If the line in the figure is the price curve of crude oil, when it reaches this position, if there is a geopolitical crisis in the Middle East and the supply of crude oil is tight, this situation will cause the price of crude oil to rise at least in the short term , It is to trigger the liquidation of the short position, and it will break through upwards. In two cases, the critical value will be reached. The first one is that the time for the confirmation or falsification of everyone's long and short expectations in the past has arrived, and the data has come out. The second is that new events, policies or data are generated and new logic is injected. Didn't figure it out? It doesn't matter. Let’s look at the example again. In the picture below, in the middle, the first picture is Amazon’s stock price, and the second picture is the new data of the US epidemic. It can be seen that with the intensification of the epidemic, the demand for e-commerce and online shopping has increased, which is why Amazon has reached a new high. We cannot simply say that it is completely printed by the Federal Reserve, it must be supported by fundamentals. As the epidemic reached its peak for the first time, Amazon’s stock price entered a stage of shocks. When the second epidemic emerged, it promoted e-commerce and online shopping again. So we need to understand what its long-short logic is. The long-short logic here is actually rational. Amazon is not rising randomly, that is, the bulls reasoned about the impact of the epidemic on the fundamentals of the Amazon company, and then made such an allocation and investment arrangement, but the bears did not realize this, and he might think it was printing money Too much printing, this is an irrational exuberance, which is not the case. Therefore, it can be seen that the new crown epidemic has actually accelerated the growth of e-commerce in the United States, and it has a continuous fundamental impact. This means that we must understand the fundamental logic and long-short logic through the disk and data. The picture on the left is the same. The first picture is the data of new cases, the second picture is the revenue of Burger King, and the third picture is the revenue of Disney, which we are more familiar with. It can be seen that the first outbreak of the epidemic will definitely hit the catering industry and the tourism industry, because people can no longer go to restaurants to eat, and they can no longer take their children to Disneyland. This is definitely a negative for their fundamentals Impact. As the first epidemic peaks, the expectations of these two companies will improve. After the first epidemic peaks, with the unblocking, the probability and frequency of people going to restaurants to take meals will at least increase. Correspondingly, catering Business revenue will increase. But why can't Disney's slope rise? Because the city is still closed due to the epidemic, the recovery of Disney is slower than that of the catering industry such as Burger King. Because after the unblocking, everyone can go to restaurants to eat and pack some food, but Disneyland is still closed. With the outbreak of the second epidemic, the opening date of Disneyland was pushed back again, the slope disappeared, and it began to go horizontal again, and even produced a downward trend. The three types of assets in this example, the first type of asset is Amazon, the second type of asset is Burger King, and the third type of asset is Disney, which are affected by the new crown epidemic from different angles. The impact of the epidemic on Amazon is positive, but it is negative on Burger King and Disney. What you need to know is that everything has positive or negative aspects, and there is nothing that cannot be used and can be used unless you do not understand it objectively. When you understand it objectively, you will understand that everything has positives and negatives, and you can see which types of positives occur and which types of negatives occur, and form corresponding strategies to configure them. By understanding the market, you can understand what the bulls and bears think, when a critical value will be reached, and when the bulls and bears will have a change.

Is the Puzzle Harder or Trading Learning Is Harder?

邵悦华

Self-taught trading is like playing a jigsaw puzzle game. There are various technical indicators, various trading theories and trading tips in the market, just like scattered pieces of a jigsaw puzzle. You have to pick them out and put together a stable Ideal piece for profit. But the difficulty of self-study trading is much more difficult than playing puzzles, just like you have to choose hundreds of suitable elements from the tens of thousands of small fragments in the market, and finally build a set of ideal puzzles of your own. The process of various trials and errors and adjustments is more difficult and frightening because each trial and error and adjustment will be accompanied by the loss of funds and the passage of time. It is true that puzzles are not simple. Many people think that puzzles are difficult because people who lack logic and spatial ability do not know where to start in the messy local graphics. But for anyone, trading is still difficult when they cannot analyze and judge. Buying and selling operations can be carried out by feeling and luck. The simplicity of operation behavior does not mean that trading is really simpler than puzzles. Trading is actually harder than a puzzle. One is that a deal failure would result in a double whammy When you fail to succeed in the jigsaw puzzle game, you will not face other negative losses, and once you fail to trade successfully, you will face a high probability of loss of wealth and reduction of funds. That is to say, the failure of the puzzle is only a blow to the spiritual level of self-ability, while the failure of the transaction will not only impact the confidence of the trader, but also lead to the loss of wealth. The second is that trading is more a test of people's psychological quality than puzzles In addition to logical space ability, jigsaw puzzles test people's psychological level more about patience, while trading tests people more comprehensively, including not only patience, but also the balance of temptation and fear. At the same time, under the amplification effect of trading funds , this test will be multiplied. Third, the trading system is more complex With the help of logic and spatial ability, the trading puzzle is more like linear thinking, while the trading system is more complicated. First of all, it is faced with hundreds of indicators. Traders need to choose several indicators among hundreds of indicators, and these choices are not It is not random, but needs to be selected according to a certain concept. After selection, these indicators are organically combined to form a decision-making system. How to do a good deal? We believe that transactions are far more complicated than puzzles, so how can we do a good deal? One is not to trade with the mentality of playing games Jigsaw puzzle is a kind of game, it doesn’t matter if you can’t solve it, you can try it randomly, and it’s only natural to play puzzles with the mentality of a game. But you must not have the mentality of playing games when doing transactions. If you treat trading as a game and do whatever you want, it will bring you significant financial losses. The mentality of trading should be prudent and prudent, not with a gamble mentality, and risk control should be put in the first place, and every trading action is justified. The second is to learn from others to form a self-trading system No one has to invent a set of characters before learning, and no one has to study how to produce cars before learning to drive. The reason why human beings continue to progress is to improve and innovate on the basis of learning and absorbing the excellent achievements of predecessors. For trading, the trading system is the core, but it is not recommended for traders to learn hundreds of trading indicators one by one, and then think about how to build a system. You can learn the trading systems of different excellent traders, and then adjust according to your own personality. Adjust your own system with the actual situation. Learn to stand on the shoulders of giants. The third is to be patient Whether it is a puzzle or a transaction, patience is always the most important psychological quality. If you are not patient, you will have a little bit of it, and you will never be able to go deep to achieve true proficiency. Trading requires patience. Traders need to wait patiently for trading opportunities, patiently hold positions, and patiently wait for the opportunity to close positions. The trading learning stage requires more patience. It is very simple to understand the basic idea of a trading system, and it is also easy to know the framework of a system, but to truly master the essence and details of a system requires long-term patient study and thinking.

Exchange circle for high-probability trading crypto enthusiasts

The secret to profitable trading is here...

forex expert

01 Many people think that discipline and mentality control are more important than anything else in trading. However, I point out unceremoniously that the premise of all this is that you must have a complete and market-tested trading system, otherwise, there will be flow. The danger of empty talk. Most people lose because of stop loss, you stop loss randomly, you stop the loss of orders that do not need stop loss, because stop loss, when faced with orders that need stop loss, you don’t stop loss, carry dead weight, and increase positions If you die, you will lose a lot. A set of trend ordering system, a proven and stable profitable system, plus trading rules, plus fund management, multiple varieties, and risk diversification... Take advantage of probability, and stick to it for a long time. 02From "Enlightenment" to "Great Accomplishment" The process of building a system, in simple terms, is divided into three steps: Opening a position is your first step, because opening a position is either missed or too early, or you will face stop loss after opening a position, and face a loss, you will be afraid, you will be afraid, you will be timid, and you will not dare to enter To be single, you must overcome your fear. The second step is to stop loss Stop loss is more difficult, because it is possible to stop the loss and the price will come back, or it is possible to continue to lose without stopping the loss, and it is impossible to do the best. Stop loss is not only a loss, but more importantly, a blow to you, a psychological blow. Can you be very rational and not trade retaliatoryly? Do you still have the courage to open a position when you face the opportunity to open a position again? If the stop loss can be done well, basically no loss can be achieved, which is also a sign of entry. Stop loss, once a mature system is in place, the stop loss becomes clearly visible: when to stop the loss, when the loss is temporary, and when to chase the order after the stop loss is required. Here comes the question, what if you are not given a chance to stop the loss? For example, institutions take extreme measures, opening sharply higher or lower, or diving sharply, leaving you too late to stop losses. Once a person stops losing control, there will be a kind of gamble, let it go, let the loss continue to expand, and finally the amount of emotional breakdown. You start to regret that you didn't stop the loss in time. Stop loss has become more important in your mind, so if there is a price rebound, you will stop loss. This is the result that other organizations want, washing dishes. The problem comes again, that is, the stop loss back and forth, which is also a problem for many people. As soon as the loss is stopped, the price returns; Stop loss is inevitable, because no one can be right. If you want to make money, you can only rely on less stop loss and more stop profit, or small stop loss and big profit. Finally, when encountering extreme market conditions, there must be means to deal with them. Therefore, once the problem of stop loss is solved, it proves that your system has also been improved, and the stop loss can be achieved and implemented, and you will not lose money, which also means getting started. As long as you have gone through the first and second steps, you will find, "Hey, you can basically make no losses", and you will gradually become confident. When you lose money, you are equally confident, and you can even lose money. Turn stop loss into profit. The third is that you have patience You can be patient without opening a single order for several days. Once you seize the opportunity, you can attack continuously. You have found the so-called rhythm. You can wait for the opportunity to open a position with the smallest stop loss. Cut it off without hesitation, not only will you not feel sad, but you will be very happy. These are fragments of the process of psychological maturity, and also my true psychological feelings and process. However, after establishing the system, you may not have a big profit, let alone great success, and you may even fail to execute it in the middle, because there are still some steps that have not been resolved, and that is the problem of belief. From enlightenment to great success, it can be roughly divided into six steps, from enlightenment to system, to rules, to self-confidence, to belief, to great success. Take my trading life of more than ten years and the traders I know around me as examples, let’s see: Enlightenment: I realized that the market has a trend. Simply put, it means following the trend and stopping losses. System: Find a way to divide the trend, simply put, you can identify the market. Rules: To make the system concrete, the simple point is to find the opening and stop loss points. Confidence: The confidence brought to you by system execution and review. To put it simply, your system can make money. Belief: communicate with the heart, form belief in the brain, religious belief, simply put, is that you absolutely believe in your system and rules. Dacheng: Of course I don’t dare to say, and I can’t say that I have achieved great success, but I think I am satisfied and my life is satisfied. This is my belief! 03 After going through it, do it based on feeling, find the system to mess around, and finally continue to accumulate, form your own trend order system, continue to sharpen and accumulate, and now you can wait, dare to chase, and the order is becoming more and more mature. I constantly reflect on my psychological changes in making orders, communicate with myself, subtly guide my psychology, and constantly tell myself what is right and what is wrong. It is like being brainwashed, brainwashed by myself, and slowly formed religion. It is a process to establish a correct trend trading concept, to form a trading system, and then to specify rules, and then put it into practice, constantly restrain one's human nature, and fight against oneself. This is a process of learning, a process of experience, a process from complex to simple, a process of human experience, a process of constantly improving system rules and reshaping oneself. 04 Comprehension after getting started: After getting started, you have to face human nature and execution, fear and greed, and yourself. You will find that there are two selves fighting with yourself. After getting started, you have your own system and rules, and you have a framework for ordering. However, due to insufficient cultivation of my own human nature, due to the uncertainty of the trading market, the nature of pursuing perfection, the complexity of human nature, and the fluctuation of the market. Therefore, even if there is a system, it will not be implemented, and the implementation will not be thorough, so you should: First, continue to practice human nature, give yourself enough time, let yourself believe in yourself, and use time to let yourself do it. Second, the non-executive nature of pursuing perfection will make you give up the system you have worked so hard to build, continue to pursue a more perfect system, and walk out of the gate. In the end of the transaction, the more you will understand the importance of human nature. When you realize the transaction, you will find it very difficult to execute. If the problem of human nature is not solved, it is very difficult to make money. Generally, it is seen after the market. Money is so close to you, you can’t do it, and you don’t do it thoroughly. Becoming a phase problem that haunts itself. The method of profit is against human nature, against the human nature of most people. So this is also one of the reasons why trading is difficult, and the attitude towards the market: How is the market going? You are at a loss. I thought in my heart that I really don’t know, and at this time you will be. You give up your subjective thinking and completely listen to the market. Because you have jumped out of the market guessing stage. You don't care how the market goes, you don't know, you really don't know. But you know it in your heart, and I know how to do it. You don't care about external disks, news, news, main positions, and other things. You don't care too much, which only adds to the chaos. You don't care about how the market will go tomorrow, and you don't have to stay up late at night to watch the external market, so you can sleep peacefully. Looking back over the past ten years, the process of trading learning is a process of becoming simple, one is technically simple, and the other is mentally simple. Only by doing these two things can the transaction be truly simplified. If you look at the market too complicated, then the market is complicated. If you look at the market simply, then the market is simple. The market is simpler, nothing more than rising and falling, 2 directions. In fact, you don't have to know the essence of speculation. Behind the price fluctuations, you only need to know whether the price has risen or fallen. If you have to be complicated. The price has risen, do you have to figure out why it has risen? Fundamentals? policy? funds? Or did you buy it? Still empty. The more you think about it, the more complicated it gets. The more references you have, the more complicated it becomes. Feelings about one's own humanity in trading: It is a habit to lose money steadily, how to do it and how to lose money. 05 From simple to complex, then from complex to simple The learning process of trading is from simple to complex, and then from complex to simple. Most people only achieve technical simplicity. How simple is it technically? Find a set of your own basis for order making, a basis for order making that can be stable and profitable. It has been tested and tested in actual combat. Some people call it a system and others call it a rule. In short, it is your own basis for order making. Then convince yourself to trust him and rely on him. Don't believe those mysterious tactics and secret indicators, they are just the basis for making orders. You can name your system and indicators "God-like indicators or God's hand". But the mentality is complicated, and most people lose money because the mentality is too complicated. Everyone has this experience. When you first start trading, you might still make money, make money in a daze, and even make a lot of money. After a period of time, after being taught a few times by the market, I realized my ignorance, so I found books by myself and went to the forum to learn. The result is that the more you learn, the more you lose money, and you will lose money no matter what you do. Losing money has become a normal state until you lose all your funds. Stable loss is a habit. The more you do it, the more you lose. The market is as good as you are right, as if the dealer looks at your own list and kills your own list. What caused the steady loss? Human nature, human nature, human instinct. A normal thing becomes your speculative weakness in speculation, as well as your inertial thinking and behavior, a series of factors, causing you stable losses, how to do what you lose. Human nature is like the gravitational force of the earth, which catches you and prevents your speculative dreams from taking off. It seems that this period of time is a dark period, a period of time when there is no hope and no light. Most people are in this stage was wiped out. How can the problems of human nature be solved? Relying on the system and rules, when you have a system, you will find mentality problems. How to solve mentality problems and self-regulation? Waiting for a series of problems, you need to continue to solve. The longing for happy trading, easy trading, and confident trading is a manifestation of a person's maturity, stability and profitability. Trading is simple and easy to say, but difficult to say. If you have been trading for more than 5 years, you ask him, what is the main reason for your loss? No one said it was because of technology, they all said it was mentality and execution. Everyone has their own favorite indicator or signal. Technology is not difficult, what is difficult is to go one step further. In the face of losses and stop losses, everyone has fluctuations and emotions in their hearts. You have to learn to adjust your mentality to make losing money a happy thing, lose money happily, and place orders with confidence. 06 A mature, stable and profitable person, open-minded, calm, and humble to people and things. Some people say that a trader has to go through a few more cycles than most people, because he has walked the path he should go, and experienced the test of life after death. Therefore, his mentality has improved and his heart has grown. The secret of profit lies in those nonsense, among those correct nonsense, because you don't have sword skills, even if you tell you the sword formula, you can't use the sword. When you make stable profits, you will find that many people have the same profit concept It's even the same, just in a different way. You must have an effective price tracking system, and more importantly, a good fund management and risk control mechanism, treat transactions with a "dispersed" and "persistent" perspective, and have a long-term probability advantage in the speculative market, rather than putting all your eggs in one basket. That's what financial transactions are all about. For most and normal people. Only after about 5 years of experience can you form your own system and rules before you get started. If you want to really make money, it will take about 2 years to transform the system into behavior. Therefore, most people, ordinary people, want to make money from the market, and it takes about 7 years. It does not rule out that there are people who are lucky or extremely smart, or people who have expert guidance, or people who have sufficient funds and are not afraid of losing money. , breaking this time frame. With the guidance of an expert, the road is the fastest shortcut, which is equivalent to the fastest way you have traveled for more than ten years, but the biggest problem is that such an expert is hard to come by, depending on fate. Don’t believe those people who say they can make stable profits within a few months. If so, call your wife out to see the genius, or ask your wife to come out to see Li Gang’s son. His father is Li Gang, and he is not short of money. Don't believe what those trading analysts say, if you can really make a lot of money, trading is such a beautiful and profitable thing, who will be under the control of others? 07 Follow the trend that you can do, follow the trend that you can lose . For more than ten years, like a monkey breaking corn, I have tried various technologies and methods on the market. The first 5 years were a process of "finding rules and forming a system". We experienced stable losses, small losses, no losses, and small wins. It was a step-by-step process; In the end, continuous precipitation formed its own trend order system. Five years later, after you have your own system and rules, you will find that you still can't really make money because you can't do it yourself. At this time, I was faced with the implementation barrier, and I was very confused at first. Most of them failed to pass their own psychological barriers of stop loss; secondly, the psychological barrier of holding positions, facing the ups and downs of the market, they always change themselves at will; It is harder than stop loss. So I went to various forums to see how other people passed this level, and I also read a lot of books. Later you will be relieved, it also takes time, these psychological barriers, as your technology continues to refine, the rules continue to improve, the system continues to improve, time will change you, from the beginning of the single hand trembling, overnight single can not sleep , I don’t need to look at it for several days after the final order is placed. From knowing to doing, you need to reshape your trading behavior, which also requires a process. Since it is a process, it is inevitable to fail and make mistakes in the middle. From consciously controlling myself to finally unconsciously controlling myself, as long as I place an order that does not conform to my own rule system, I will feel very uncomfortable. The process of implementing the rules is also a process of persuading one's heart, constantly convincing oneself, and making oneself better and better; the cultivation of human nature begins with stop loss and stop profit, willing to lose, and confident to win, trading is a solution that speculation brings to you The process of various psychological barriers is also the process of reshaping one's own behavior. For most people and ordinary people, only after at least 5 years of experience can they form their own system and rules before getting started. If you want to really make money, it will take about 2 years to transform the system into behavior. So, most people, normal people. It takes about 7 years to make money from the trading market. It does not rule out that there are people who are lucky and smart, or people who are guided, or people who have sufficient funds and are not afraid of losing money. Breaking this time frame. After so many years, I now feel that the technology is getting simpler and simpler, and the mentality is gradually becoming simpler. Now I can wait, dare to chase, dare to stop losses, can make profits, and the order is becoming more and more mature. It is a process to establish a correct trend trading concept, to form a trading system, to make specific rules, and then to put it into practice, to constantly restrain one's human nature, and to fight against oneself. This is a process of learning and experience The process is also a process from complex to simple, a process of human experience. A process of constantly improving the rules of the system and reshaping itself. I hope this article can help traders get out of the confusion when they are in confusion. Old rules, if you haven’t understood it, please bookmark it first!

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