What do newbies need to know about foreign exchange? (five)

Thoughts from Trader Bo Wen
交易员博闻

Many novices enter the market for the first time, and it is easy to have unrealistic ideas about the investment market. I have been in the market for so long, and I am very clear that some ideas are very naive. I write it today, and you can compare it. If you also have , please give up early.

The first one: fantasy get rich overnight

This idea is the most common, fantasizing about yourself going from 10,000 to 100,000, from 100,000 to 1 million, to 10 million, to 100 million... and then marrying Bai Fumei and stepping into the pinnacle of life. And if we pay attention to the investment market, we will often see someone get rich by investing, such as Fu Haitang, from tens of thousands to billions... Then you think you can also copy Fu Haitang's experience.

Based on my years of experience, there are friends who have made some small money by investing, and only one of them has made more than 10 million yuan through investment (there is a certain element of luck, see my investor series 2), including myself. For more than ten years, the real net profit (deducting the loss) from the market is only a few million, which is not as much as the two houses I bought. It is better to buy a house and do nothing to earn more. It is really more important to choose a direction than to work hard. I remembered a joke: A certain person sold his house in Beijing to start a business. He made millions of dollars in starting a business, but when he came back, he found that he could no longer buy the original house.

Of course, I am by no means saying that investment cannot make money. Of course, investment can make money. After years of polishing, when your trading system is mature, in the long run, you can indeed make profits from the market, but please remember, Not profiteering. Don’t you see that Soros Buffett, the world’s best fund manager, only has 20%-30% compound interest in the long run? To be honest, for a relatively stable investor, long-term investment is actually equivalent to working for yourself (including me now), and what you earn is not a stable return. Some years are good, and you may earn more, and some years are poor. Then you earn less, and you may lose a little bit. If I work hard in the workplace wholeheartedly, I believe that I can earn almost the same amount of money from the workplace after more than ten years of hard work (when I left the job, my annual salary was more than 200,000 to 300,000), It's just that I chose a more difficult path.

So having said that, some people may say, isn’t it true that some people in the market have made huge profits? Are they all liars? Yes, I do believe they made hundreds of millions in profits. But what I want to say is that this kind of probability is extremely small, which not only requires them to have great strength, but also requires the timing of chance and coincidence. The right time, place and people are indispensable. Fu Haitang did earn more than one billion, but if you look at the books he wrote, how many times did he lose his position in the past ten years or so? How many times have you cried bitterly in the dark? And you look at his battle for fame: garlic, cotton, black, these are all super big markets that happen once in eleven, and he caught them. If he is doing precious metals, similar to the dick market from last year to the present, the gods will not be able to make a fortune. To be honest, apart from the fact that every successful person has cultivated their own trading skills to a high level, they are still the lucky ones of the times. Without this opportunity, you have nothing to do, and you are useless as a hero.

So I occasionally fantasize that it would be great if gold and silver repeat the magnificent bull market after 2008. If I follow my current trend trading method, maybe only one chance is enough.

The second: fantasy can accurately predict the market

When I was young, I watched "The Romance of the Three Kingdoms", and what I admired most were the counselors in the Three Kingdoms: such as Xu Shu, Zhuge Liang and so on. After Liu Bei invited Xu Shu to serve as his military adviser, Xu Shu saw the strong wind blowing to the flagpole, and made a calculation: Cao Cao must sneak attack and rob the camp tonight, and then arrange it like this. Of course, Zhuge Liang is even more of a god, he can watch the sky at night for everything, calculate with his fingers, and then everything is under control. I don't know if everyone will have this kind of unrealistic YY when doing transactions? Fantasizing that you can also be as clever as Zhuge Liang?

Let me tell you this, if there is an analyst who often makes similar predictions: on XX, XX, XX, XX, gold will fall to XX points, and then rebound to XX points, then he is a liar. Maybe his prediction is quite accurate for a certain period of time, but in the long run, he is definitely not Zhuge Liang, he can only be a magic stick. Because the reason is very simple, if someone can accurately predict the future market trend, sorry, the whole world belongs to him, what Bill Gates, Buffett, Ma Yun, all go to one side.

I have done analysis for so many years, until now, I absolutely dare not say that I can accurately predict the trend of the market. If I can vaguely see a general direction of the future trend, I already feel very amazing, let alone Accurately predict the market. I have lost money in trading for nearly six years in a row. The mistake I made in the first six years was to focus on market research and judgment. It wasn't until I lost all my money that I suddenly realized that I was on the wrong path: We don't rely on predictions to make money in investment, but what Soros said: I don't care about whether my judgment is right or wrong, what I care about is that my judgment is wrong After I get it, I will lose less, but after my judgment is right, I will earn enough.

In fact, trading techniques are much more important than market forecasts. Just like the recent gold shock market, if you have a problem with your trading technique, you may have lost money. Although I am in pain, judging from the results of the transaction, it is actually not bad.

I have written so much today, and finally, this series is going to write nine articles, but it may come to an end for the time being. Because maybe similar articles are not very popular (the number of clicks is very low, it is better for me to write gossip news), and I am quite exhausted to write articles. Well, finally I wish you all a happy weekend.

Copyright reserved to the author

Last updated: 08/19/2023 18:53

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