What is the necessary path for a successful trader? As a trader on the road and a fan of Forex Finance, I know that the road is winding and bumpy.
Failure, success, big failure, big success, just like the candlestick chart, there are countless peaks and valleys waiting for every trader.
The article I brought today is partly my own insights, and some dictation of overseas traders, hoping to help you view transactions rationally and identify what stage you are in. Due to the length of the article, it is divided into two parts.
No. 1: Start with no clue
No matter how good you are in other fields, you will be more or less confused at the beginning of the transaction.
Trading is a very easy thing to start, open an account, open the software, place an order, you have heard time and time again how others get rich quickly in the trading market, so you made this decision very easily.
Therefore, when we have an understanding of the basic rules, we will try to trade. Whether it is stop loss or technical chart analysis, we are familiar with it in the minds of traders, but in actual operation, it is always ignored and ignored. Fall into self-doubt.
Here's a case that you've all been through: Paul Tudor Jones, a super-aggressive trader, tells a scary early trading story about the moment he Impulsively buying long cotton futures (well, I've done this too many times and the results have mostly been negative). Then the predators in the cotton market immediately targeted him and reversed the transaction, and he lost 70% of the principal.
The market is so cruel, everyone thinks they are smarter than the market. Even though we know the rules of the market, are familiar with various technical indicators, and think we are different, most traders think in the same way.
Second: Don't overthink it, are you just one of the many traders who
thinks you can avoid making the same mistakes everyone else does?
Rest assured, you will, and you will make the same mistakes that everyone makes over and over again.
Even if we know the rules, read a few books, listen to some famous traders, or take some trading courses.
The problem is that we don't really understand what we're reading and hearing. This transactional knowledge cannot be passed on passively. It has to be acquired through personal experience.
What are the basic rules in trading?
1) Do not trade frequently.
2) Control the position.
3) Strict stop loss.
4) Trade after careful consideration.
5) Don't be influenced by your emotions.
These are basic guidelines that every trader will know.
But in the end, the road to trading was still much more difficult than expected.
Legendary forex trader Bruce Kovner tells a classic case about hedging. To reduce risk, Kovner would have opened short soybean contracts to hedge his long positions, but as soybeans soared to new highs in the 1970s, his brokers went into ecstasy and bid high. Shouted:
"Soybeans are about to be delivered . . . it would be stupid to open a short November contract. Let me unwind your November short contract for you, and when the market goes up the next few days, you'll be Make more money!"
He agreed. If the price does go up to the limit, the transaction will be locked and no one can close the position. This means you have the potential to make the most profit. But relatively, you also bear the risk of substantial losses. In extreme cases, there is no way for you to close your position without liquidity.
Kovner perfectly described the ecstasy every trader felt in the early days:
“It was a crazy time. Fifteen minutes later, my broker called me back, and he sounded even crazier.
"I don't know how to tell you, soybeans are down! I don't know if there is still a chance to close the position. "
Fortunately, the limit-down didn't last long, and he found the right time to get out before he suffered a huge loss.
"I made $45,000 at one point. The final profit was $22,000. "
Third: experience unprecedented heavy losses
Every trader ends up with catastrophic losses. Many of the best traders have gone broke more than once. Like the great speculator, Jesse Livermore.
Kovner's case teaches us that large losses are unpleasant.
"I was in shock. I couldn't believe how stupid I was, I still couldn't understand the market despite studying it for years. I couldn't eat for days. I thought I had lost the ability to trade." Michael
Ma The story of Michael Marcus, this time about sugar futures.
Q: By the time of liquidation, how much have you lost on the trade?
A: I lost my own $30,000 plus $12,000 of the $20,000 my mother lent me. "
Every trader has a similar story. For me it was NEO (a cryptocurrency in China). I entered in the middle of a bull market, betting a large long position. Just a few days later, my Assets doubled.
Then, cryptocurrencies started to be questioned. A banking expert in China said it was worthless and crazy. China began to crack down hard, and some countries even banned trading. The market quickly
sank In panic. And I watched the fruits of victory disappear within two days. In the end, I lost 68% of the principal.
I felt like I was dead and became muddled. I couldn't sleep for several days. Free yourself, exercise like crazy, get drunk, well, none of this will work.
Step 4: Reflect deeply and get stronger
Once you finally experience losses like never before (even in debt), slowly, you will realize that This is definitely the best experience in your trading life.
If you can just sit down and think rationally, then you start to look at all the things you are doing wrong. You question all your beliefs and ideas. You don't just look at the indications of things ...you want to know what works and what doesn't, so you end up getting real and serious about trading.
Frustrated as he reflects on his massive losses, Paul Tudor Jones doesn't want to trade anymore. But then he came to his senses:
“Why do those risky trades? Why not let yourself pursue happiness instead of pain?
” That’s when I first decided that I had to learn self-discipline and money management. For me, it was cathartic. In a sense, I went over the edge and questioned my ability as a trader. But in the end, the determination came back to fight. "
True loss equals real wisdom.
Without that loss, any theory, course, is meaningless to you. You'll think you're different, and the rules don't apply to you.
But there are no exceptions.
Add
