"The closest way to market reality", this style is the basis of all trading types?

Guide:

A very successful trader once said: In trading, I will never go short above the 5-day moving average and go long below the 5-day moving average. Its upper and lower edges are traded.

Why? Because if you make a mistake in a volatile market, you will not lose money, but if you go against the market, you will lose everything even if you stop the loss again. This is the principle.

Four maxims that a master must abide by:

(1): Never lose patience with the market.

The trend has just begun, but many traders closed their positions prematurely due to lack of patience. There are many lessons to be caught and cut because of lack of patience to chase ups and downs. Impatience is a manifestation of no trading principles. You must have a set of scientific and effective The "trading system" allows you to have sufficient reasons for opening and closing positions.

Don't always try to make a lot of money as soon as you make a move, you must allow yourself to make mistakes, and you often make mistakes, you must leave yourself the opportunity and time to correct and learn and improve (will you still have heavy positions in the future, do not stop losses... ?)

90% of the time, you should participate in the market with light positions, aiming to improve your ability to judge the market and analyze trends through continuous learning and practice. Hone your mentality and improve your skills!" Sensing the pulse of the market, only in this way can you make progress.

Keep learning, practice and learn again, and you will see the truth of the market more and more clearly. If you feel that you are good enough and don’t need to study and study, it is just the beginning of your failure. This is the meaning of the "melting pot" of the market Maou!

(2): Never think that the market will definitely happen (don't predict the market).

The market is always right, and to say that you are against the market is courting death. This is what we often call contrarian operation.

The price trend is likely to be beyond the expectations of the trader. You must wear your seat belt (set a stop loss price), give up the mentality of gambling, and learn to make money when your judgment is wrong. Never get involved in your transaction Attempts, want to prove your status, dignity, ability, and you will succeed in the end only by being a student forever! We must have a mentality: that is, to adjust your mentality at any time as the market changes.

Sometimes we say that long orders enter the market, and we may let long orders come out after a while and go short. That's it, we are also fluctuating in our judgment on the market as the market fluctuates. When the price is hovering at the support level, we must have a bullish mentality, but if the price breaks through the support level, then we will immediately stop the loss and go short.

(3): Don't act rashly (don't place orders at will).

Especially when the market is still oscillating in a small range, it is a big taboo to say with certainty where to go after a breakthrough. You must wait until a variety feels that it has little risk and confirms that "this is a great profit opportunity" before selling.

Don't let nausea, anger, reluctance to admit defeat and other tempers interfere with your trading and principles, if you don't want to be eliminated by the market.

(4): The secret of success is: planning, discipline, judging the trend and following it.

In the foreign exchange market, no matter what kind of trading style, the premise is "you have to be able to trade". Without actual transactions, all predictions, projections, and analyzes are meaningless.

Therefore, regardless of the type of transaction, executing a transaction is essential. Short-term trading is the best way to train the basic skills of trading. Even if you don't adopt short-term style in the end, this ability is very beneficial.

Different from other methods that rely on analysis and forecasting, short-term most relies on the ability to carry out buying and selling operations. For a short-term trader, judging whether the market direction and range is correct is not the most important thing, but the most important thing is "the ability to deal with orders in real time".

You have to know under what circumstances, what method to use, at what speed and frequency, at what possible most favorable position and timing to buy and sell, when to enter the market, when to stay on the sidelines, How to effectively control losses, how to maintain and expand profits to the greatest extent, how to place pending orders to get the most favorable transaction point, how to quickly adjust your physical and mental state after encountering a blow...

These are important competencies that all types of trading require.

Compared with other methods, short-term is still a "closest method to market reality". From the perspective of ability configuration, short-term investors need the least ability configuration and are the simplest.

He doesn't need to learn a lot of knowledge (he doesn't even need to know what kind of product he is trading), nor does he need to have the superb information collection, which is almost impossible for those who rely on forecasts to trade. The ability to analyze and analyze and integrate (unfortunately, these people always overestimate themselves, consciously or unconsciously think that they know too many things that are impossible to know), and they do not need to have the industry with such deep related varieties as professional traders Knowledge and Insider Situation.

A short-term trader only trades based on immediate reality. He only grasps the present and only digests people's actions instead of digesting overwhelming information or estimating what others think.

All his job is to recognize reality and follow it or resonate with it. And recognizing reality and trading on it is the true essence of trading ability.

Unfortunately, the vast majority (almost all) of the people in the market trade based on their own thoughts, not reality itself.

Although they seem to be staring at the market, they always create another market in their minds and try to hope (and only hope) that the real market will follow the market in their minds ---

Anyone who knows this is impossible! But this knowingly impossible situation happens in the minds and wishes of countless traders every day, and what comes with it is that failure happens to countless people in similar ways every day.

(This article comes from WeChat public account: Forex Finance)