1. The importance of trading philosophy in trading
What is the most important thing about trading? It can be said that the wise see wisdom, and the benevolent see benevolence. Some people think that technical analysis is the most important, some people think that fundamental analysis is important, some people think that money management is king, and some people think that mentality management is the most important. But I personally think that the decisive factor should be your trading philosophy, that is, your overall understanding and grasp of trading. What is the market, how to trade, the greatest weakness of human nature, the fundamental structure of the market and so on. In foreign exchange investment, do you follow Mr. Cai Zhenwu's investment philosophy of pursuing value return under extreme price and value distortions, or Mr. Zhang's simple trading philosophy that simplicity is the best and the market is the first? Systematic trading ideas from the Happy Dummies of the Champion Player of the Month. Because only after your trading philosophy is determined, can you find your own trading tools based on different ideas. For example, the judgment of currency value in fundamental analysis, the grasp of trends and daily fluctuations in technical analysis, or the determination of trading signals in system trading. Correspondingly, it will become the method of long-term investment, the skill of short-term speculation and the mode of mechanical operation. I remember what Mr. Cai Zhenwu said, "Tools can be changed, people can be changed. But your thoughts and the value of your thoughts will last forever." I believe what Mr. Cai expressed is the importance of thoughts and ideas.
2. Who is the most powerful opponent of investors
I believe that after a period of investment experience, most investors will feel a mysterious market force from their hearts. It is almost ubiquitous and omnipotent. Let's just look for the trend. When you see the New Zealand dollar rising, you consider entering the market to trade long positions on the New Zealand dollar, but at the beginning, you don't know whether the rise is a rebound or a reversal. So you wait on the sidelines. Finally, you feel that you can grasp the trend, but you find that you have not been able to find the right time to enter the market. Seeing that the price keeps rising, you cheer yourself up in your heart. As long as it pulls back, I will definitely buy it. But the market seems to know your thoughts, and he just doesn't pull back. Finally, after countless hesitations, waited. You decide not to wait and see and buy when you see the trend. Coincidentally, the market continued to rise, but in the end, the good times did not last long. Just when there was a little profit, the market took a sharp turn for the worse. The New Zealand dollar suddenly pulled back from above 0.50 to 0.48. You think this is just a normal pullback, so you buy more. But the market did not rise along the trend as you imagined, but fell all the way, 0.47, 0.46, 0. 45. Finally, you start to doubt your own judgment, and you also feel that if you stick to it all the way, what awaits you must be the double collapse of your body and funds. You have been physically and mentally exhausted for the past two months. Except for the occasional few days of joy that the market gives you, everything else is endless pain. You can't take it anymore. In the end, you gritted your teeth and broke your arms in tears. But the strange thing is that the market didn't continue to fall, it started to rise again. It seems that the market is only waiting for your broken arm. After learning from the pain, you start to ask investment consultants or friends around you. But it turns out that they are all amazing, and they all use this and that analysis method to make money. You finally realized that it was because of your lack of internal strength. You visit famous teachers and read all the books. You finally understand that some time ago, it was the dealer's strong washing, and the trend has not changed. You scrape together some funds and are ready to fight again. But strange things happened again. You set your stop loss. But every time the market seems to be targeting you. After hitting your stop loss, the price will ride on the blue sky. After you have done this many times, you will start to give up the stop loss. But just now you are glad that this method has made you money. But the market plays hide-and-seek and directly blows up your account at once. In February 2003, the pound fell by 1,200 points all of a sudden. But all trends at the time were firmly in favor of the pound rising. You continue to learn, and it seems that you have found the best way to beat the market all at once. You not only set a stop loss, but also a stop profit. But after a long time, you find that there is a problem again. Your target price is always 2-3 points away. Turn around and trigger your stop profit again. What could have been a profit of 100 points turned into a profit of 10 points to exit. You are still congratulating yourself on your brilliance, no matter what, I always make a profit. But before they had time to be happy, the market went all the way up again. Three days later, if you look again, if you hadn't set a stop win at that time, your capital would have doubled. You tried all kinds of methods, but in the end you found that you still couldn't beat the market. This banker is too powerful, the main institution is too powerful, it is really omniscient, omnipresent, and omnipotent. You start to ask around who is the main force and maker of the market, because you find that as long as you find it, you have the guarantee of success. You subscribe to various magazines, and you listen to various exchange reviews and lectures everywhere, hoping to find traces of dealers and institutions. Because although he can't see the end of the dragon, he turns his hands into clouds and turns his hands into rain. You have to find him, the biggest enemy who makes your investment profitable. It becomes a profit 10 points of entry. You are still congratulating yourself on your brilliance, no matter what, I always make a profit. But before they had time to be happy, the market went all the way up again. Three days later, if you look again, if you hadn't set a stop win at that time, your capital would have doubled. You tried all kinds of methods, but in the end you found that you still couldn't beat the market. This banker is too powerful, the main institution is too powerful, it is really omniscient, omnipresent, and omnipotent. You start to ask around who is the main force and maker of the market, because you find that as long as you find it, you have the guarantee of success. You subscribe to various magazines, and you listen to various exchange reviews and lectures everywhere, hoping to find traces of dealers and institutions. Because although he can't see the end of the dragon, he turns his hands into clouds and turns his hands into rain. You have to find him, the biggest enemy who makes your investment profitable. It becomes a profit 10 points of entry. You are still congratulating yourself on your brilliance, no matter what, I always make a profit. But before they had time to be happy, the market went all the way up again. Three days later, if you look again, if you hadn't set a stop win at that time, your capital would have doubled. You tried all kinds of methods, but in the end you found that you still couldn't beat the market. This banker is too powerful, the main institution is too powerful, it is really omniscient, omnipresent, and omnipotent. You start to ask around who is the main force and maker of the market, because you find that as long as you find it, you have the guarantee of success. You subscribe to various magazines, and you listen to various exchange reviews and lectures everywhere, hoping to find traces of dealers and institutions. Because although he can't see the end of the dragon, he turns his hands into clouds and turns his hands into rain. You have to find him, the biggest enemy who makes your investment profitable.
3. Who is the banker and who am I
Is there a major institution in this market, and is there a banker. The answer is definitely "yes". In the foreign exchange market, there are indeed many financial tycoons and various economic entities, even national entities. Of course, the biggest market maker in the foreign exchange market is the US government. Therefore, it is absolutely necessary for us to study the attitude of the US government towards the trend of the dollar. Personally published articles such as "The New U.S. Treasury Secretary and the Future Trend of the Dollar", "National Interests Above All", "Americans' Abacus, Europeans' Account" hope to study the general trend of the US dollar from the national level. But experienced foreign exchange investors know that the government generally does not directly enter the foreign exchange market for transactions. They generally only use verbal remarks or some policies to intervene softly or simply turn a blind eye. The Japanese government is the government that likes to enter the market to intervene in foreign exchange trends. But history shows that there is no evidence that government intervention will necessarily succeed. On the contrary, it is often possible to achieve certain intervention effects in a short period of time. But it didn't take long for the market to retaliate in a more drastic way. This is not the case with the intervention of the national central bank, let alone other institutions and entities. Historical data and historical statistics show that the result of monopoly operations by bookmakers or institutions is far greater than success in failure. Just because of people's psychological preference for memory and the marketing and promotion of institutions and bankers, successful monopoly operations are enlarged intentionally or unintentionally, while failed operations are artificially reduced. Because in fact, from the fundamental structure of the market, because the financial market is not productive, it cannot create wealth, it can only transfer wealth. Therefore, it must be a zero-sum game market. It is also for this reason that the market will always be a pattern of 7 losses, 2 draws and 1 win. You want to be the 10% winner, in theory you can't be the majority of the market, Whether it is in terms of the number of participants or the participating funds; if you want to be a winner, you have to be a minority, but if you cannot become the majority, how can you conduct monopoly operations. Therefore, it is easy for all monopoly operations to obtain floating profits, but it is quite difficult to obtain actual profits. The clever way is to "squat a thousand catties in fours and twos", but without certain financial strength, "squatting a thousand cats in fours and twos" will always be just a dream. Therefore, the key to the success or failure of monopoly operations is the issue of monopoly degree control. However, when operators obtain a large amount of floating profits due to monopoly operations, it is difficult for operators to control their psychological desires, and it is difficult not to make themselves surpass The boundary of "degree" that distinguishes the majority and the minority, and finally moves towards its own opposite. When Soros blocked the British pound, he reasonably grasped the degree of monopoly and successfully used the technique of "four or two dials", but Soros only had one. Therefore, what I want to show is that the institutions and main forces in the market or the power of bookmakers or even the country are not terrible. They have no advantage over us in the huge market. The reason why everyone is afraid of institutions and dealers is only from two misunderstandings or illusions. The first is to equate the stalemate ability of funds with the ability to make money; the second is to equate the influence on prices with the actual ability to make profits. The strengths of large financial institutions lie in the investment and depth of market research, the speed and breadth of information collection, and the professionalism of information processing. In addition, it is the smoothness of the trading runway and the relatively low transaction costs. But in terms of profitability, market makers and large institutions have no obvious advantage over small funds. On the contrary, general large funds have profit goals and time limits for achieving the goals. As a result, "performance pressure" causes most of the large amount of funds to be "stressed funds". Therefore, due to the existence of profit pressure, the operator will have a greater disadvantage in terms of psychological control of fund operations than small amounts of funds. Therefore, in terms of stalemate ability, as long as it is reasonable fund management, the stalemate ability of small funds is no worse than that of large funds. In terms of influence on prices, big funds do have an advantage, but don't forget that the old Chinese saying "buy is an apprentice, sell is a master", just like a crocodile entering a pool, the water level rises because of its entry, but when it When leaving, the inevitable water level will drop. Therefore, market influence is a double-sided knife, which can hurt others as well as oneself. The Western investment community calls it "echo" and it refers to this price impact effect. If you have money, of course you can buy a lot, and it is enough to affect the price trend. But if the problem of selling cannot be solved, the actual profit will not be generated, and what you have will always be just a floating profit on the paper. No advantage over us. The reason why everyone is afraid of institutions and dealers is only from two misunderstandings or illusions. The first is to equate the stalemate ability of funds with the ability to make money; the second is to equate the influence on prices with the actual ability to make profits. The strengths of large financial institutions lie in the investment and depth of market research, the speed and breadth of information collection, and the professionalism of information processing. In addition, it is the smoothness of the trading runway and the relatively low transaction costs. But in terms of profitability, market makers and large institutions have no obvious advantage over small funds. On the contrary, general large funds have profit goals and time limits for achieving the goals. As a result, "performance pressure" causes most of the large amount of funds to be "stressed funds". Therefore, due to the existence of profit pressure, the operator will have a greater disadvantage in terms of psychological control of fund operations than small amounts of funds. Therefore, in terms of stalemate ability, as long as it is reasonable fund management, the stalemate ability of small funds is no worse than that of large funds. In terms of influence on prices, big funds do have an advantage, but don't forget that the old Chinese saying "buy is an apprentice, sell is a master", just like a crocodile entering a pool, the water level rises because of its entry, but when it When leaving, the inevitable water level will drop. Therefore, market influence is a double-sided knife, which can hurt others as well as oneself. The Western investment community calls it "echo" and it refers to this price impact effect. If you have money, of course you can buy a lot, and it is enough to affect the price trend. But if the problem of selling cannot be solved, the actual profit will not be generated, and what you have will always be just a floating profit on the paper. No advantage over us. The reason why everyone is afraid of institutions and dealers is only from two misunderstandings or illusions. The first is to equate the stalemate ability of funds with the ability to make money; the second is to equate the influence on prices with the actual ability to make profits. The strengths of large financial institutions lie in the investment and depth of market research, the speed and breadth of information collection, and the professionalism of information processing. In addition, it is the smoothness of the trading runway and the relatively low transaction costs. But in terms of profitability, market makers and large institutions have no obvious advantage over small funds. On the contrary, general large funds have profit goals and time limits for achieving the goals. As a result, "performance pressure" causes most of the large amount of funds to be "stressed funds". Therefore, due to the existence of profit pressure, the operator will have a greater disadvantage in terms of psychological control of fund operations than small amounts of funds. Therefore, in terms of stalemate ability, as long as it is reasonable fund management, the stalemate ability of small funds is no worse than that of large funds. In terms of influence on prices, big funds do have an advantage, but don't forget that the old Chinese saying "buy is an apprentice, sell is a master", just like a crocodile entering a pool, the water level rises because of its entry, but when it When leaving, the inevitable water level will drop. Therefore, market influence is a double-sided knife, which can hurt others as well as oneself. The Western investment community calls it "echo" and it refers to this price impact effect. If you have money, of course you can buy a lot, and it is enough to affect the price trend. But if the problem of selling cannot be solved, the actual profit will not be generated, and what you have will always be just a floating profit on the paper.
Therefore, in general, there are indeed mysterious forces in the market. But this mysterious force is not a banker or an institution, it is not a tangible entity, it should be the sum of an invisible force, the sum of the psychological weaknesses of many investors, and the sum of a market psychological force . Driven by common interests, the weaknesses of human nature are extremely easy to infect, transmit and strengthen each other. In an investment process, individual thinking can easily be replaced by group irrational thinking. It is precisely because it is a collection of individual irrational thinking that it feels omnipresent and omnipotent. Because it is both self and non-self. Therefore, you should understand that even if there is a dealer in the market, it is not the dealer who decides the market, but yourself who decides the market. The market has you, the market has me, you are the market, I am the market, and we are the market. So, in a way, the dealer is you and you are the dealer. The essence of defeating the market is not how to defeat the dealer, but how to defeat yourself.
4. Overcome yourself
Our previous analysis shows that you want to beat the market and invest profitably. You must have the courage and strength to overcome yourself. But the so-called country is easy to change, but nature is hard to change. It's not easy to defeat yourself. But isn't there just nothing to do? I said no.
For 99% of investors, the most important thing in investment decision-making is the correct analysis method. In this regard, the judgment of the buying point (entry point) is particularly emphasized. But in fact, judging the selling point is more important and more difficult than judging the buying point. If expressed in the form of a percentage, the judgment of buying point accounts for less than 1% of successful investment, while 9% is the judgment of accurate selling point, and the rest is risk management, fund management and psychological control, which are important in investment decision-making. The proportion may be 90%. Therefore, I am extremely opposed to over-emphasizing the power of technical analysis and its role in investment decision-making. If a person has poor psychological quality, even if he has the correct market analysis method, he will use subjectivity instead of objectivity in actual transactions. What we are most likely to see and hear are subjective opinions such as "I don't believe it, your New Zealand dollar can really rise above 0.60", or "The Canadian dollar fell 500 points last week, and it won't rebound this week". predict. Risk management and money management can be controlled through mathematical models, and it is beyond the scope of this article. I will mainly discuss the techniques and techniques of psychological control.
The greatest difficulty in overcoming yourself is overcoming the dark side of human nature, the unknown side, that is, the weakness in your human nature. In general group communication, you may look and sound perfect, but as soon as you open the transaction record, you will find that you are actually just the most ordinary ordinary person. Deep in your heart, you are not Not as perfect as your looks make it out to be, but what does it look like and sound like? One of my elder brothers often joked that "Forex trading profits are only a by-product, what is important is to temper your character." A friend of mine also said, "Successful trading is a reward for your perfect personality." This is probably the expression mean. You may not know how ugly and hideous the depths of your humanity are at ordinary times. But if you carefully analyze every single transaction of yours, you will find that your human nature is also so imperfect. The dark sides of human nature such as "laziness", "luck", "greed" and "fear" have become the biggest obstacles to your successful trading.
Laziness is the mentality of getting something for nothing. There is no free lunch in the world, but most people hope that a miracle will happen. Whether foreign exchange investment is investment or gambling, maybe 90% of people don't think they are gambling, but may I ask how much time and energy you have spent on your investment. Look at how many people are seriously studying the market, most of them are keen on the opinions of experts and the opinions of others. Or just a momentary impulse or mood at the time. Mr. Cai Zhenwu of our company spent a year studying the U.S. dollar, and then conducted his actual foreign exchange investment. Finally, in less than a year, his investment funds soared from 130,000 Australian dollars to 400,000 Australian dollars. I don't know how many investors have really cared about the accidental and inevitable factors contained in the middle. Perhaps most people are amazed at Mr. Cai's extraordinary investment results, but they don't know Mr. Cai's huge efforts behind it. The energy and time most people spend on an investment worth one hundred thousand is not as good as choosing a piece of clothing. The results of such an investment are not expected to be known. I look forward to miracles every day, but if miracles really happen every day, is it still called a miracle?
And the so-called fluke is easier to find. Unfortunately, today I was caught up. Instead of seriously studying the real market reasons, investors kept hoping that the market might have news that would be beneficial to you tomorrow. If this knife goes on, if the market picks up immediately, I will lose money. After making a profit, I am even more worried that if the market continues to rise, it will be too much. I always worry about what happens in my heart, don't you know that if there is an event every day, it is still called "what if". Especially if you can make a profit and get out of the game after a dead end, you will be lucky. This happens every time.
Greed is more obvious. Everyone will say that there is only a small difference between poverty and greed, but how many people can get rid of greed? Wanting to win more after winning is one of the most important manifestations. The other is to hope to get rich overnight. Margin trading is inherently a highly leveraged market. 20 times magnification is not a small number. However, we can find that many investors have enlarged their funds by more than 50 times in transactions, and are still tirelessly looking for a trading platform with a higher ratio. We hope that it is best to enlarge by more than 500 times. In this way, as long as my judgment is correct, so will be. In addition to the problem of magnification, another manifestation of greed is too frequent transactions. Trade every day, trade all the time, trade for trade's sake. If you don't make dishes for two days, you will feel restless, and you won't even think about tea or food. In fact, this is the external manifestation of your greed in human nature. Take a look at why the trading records of ordinary investors are that the profit orders are very small. But one or two losses were huge, and the most important thing was the greed in my heart. "Two birds in the bush are worse than one bird in the hand", eager to take profits, but when losing, wishful thinking that a fluke must happen, until the end is really scared, and has no choice but to close the position and exit the market. It is strange that the loss is not large!
Even seasoned investors have fears. It's just that their fears are different from ordinary people's. They are afraid of the market, but they are not afraid of themselves, as Mr. Xiao Xiaolan, the fund manager of our company, said, "I have always worshiped the market, and it will always be my best teacher." But ordinary people are different. They are not afraid of the market. When the market rises again and again, they are afraid that they will miss work, but they are not afraid that the market is already very fragile. When the market fell to its lowest point again and again, they were afraid of the end of the world and were eager to get out and run away. Moreover, this kind of fear is very easy to be infected, thus showing a strong group nature. When people's emotions are contagious, reason ceases to exist.
It is impossible to completely overcome these human weaknesses. Because they are the external manifestations of human nature and are innate things. But with the help of the trading system for systematic trading, they can be controlled within a moderate range, so that they will not affect your normal investment judgment.
5. Forecasting and trading
Many people may not be able to distinguish the difference between forecasting and trading well, thinking that being able to predict the market well is the key to successful trading. But in fact, forecasting and trading are two completely different fields. The required technologies, knowledge and skills as well as the corresponding services that can be provided and the pursuit of the realm are very different. The focus of forecasting is past prices and future prices Most of the use of subjective analysis techniques, such as shape, wave, trend line, K-line combination research, etc., hope to find the law of price changes from past price changes in order to accurately predict future prices and price levels Changes; in the financial field, consulting services are generally provided, and related companies also use commission collection as the main way for corporate profits; the realm of forecasting pursuit is as correct as possible. But in terms of trading, traders study the distribution characteristics of prices, and their goal is to study the statistical characteristics of the non-random part of the price distribution and use them to establish a trading system with positive expectations. According to the random and non-random part of the price distribution The variation of the statistical characteristics of the random part optimizes the trading system and at the same time firmly implements it. Therefore, for traders, the pursuit of risk and return and control of risk and return are the focus of their work. In the eyes of traders, it is impossible to avoid market risk, and investment without risk is impossible to exist. The important thing is to make as few mistakes as possible, small mistakes. The tools used by traders are a large number of mathematical statistics and mathematical models in order to be more objective and fair. In the financial field, it generally provides direct investment services such as wealth management on behalf of customers, while related companies generally use performance fees as the main profit path, pursuing a win-win model for customers and companies. The realm pursued by the exchange is to make as few mistakes and minor mistakes as possible. Although, literally, the difference between forecasting and trading is only in "right" and "wrong", but in fact, if you can experience it carefully, you will find that the two are completely different. I don’t know if you have such an experience. When you come to a financial company, the investment consultants who receive you may be different, but generally speaking, those who can speak eloquently about "market trends" and can deliver "incisive analysis" are usually Trading is very bad, and often they are always silent. When asked what they think of the market, they always answer: "I don't know how it will go." Investment consultants who always talk about conceptual topics such as homeopathy, fund management, and psychological control, if you have the opportunity to look at their transaction records, You'd be surprised how often their deals are pretty good. It is really the so-called "what can be said will not be done, and what can be done will not be said". In fact, the reason behind this is the difference between "prediction" and "transaction". It can be said that most investors have laid the foundation for future failure on the first day of entering the financial market. Because everyone regards "analyzing the market" as their method of entering the market and the basis of trading. Almost all the analysis techniques learned are highly subjective technical analysis methods. To use a sentence that often describes wave analysts to describe it is "ten wave experts may have eleven different wave number methods". Using such a subjective analysis method coupled with the influence of some dark sides in human nature, investors may be influenced by their own emotions in front of any market. Therefore, excellent traders seldom predict the market, they will only execute system trading signals to enter the market, and try to avoid the subjective influence of human nature on transactions. In fact, the so-called bottom-hunting and top-finding that we often hear come from blind predictions on the market, but the real situation is that the market will never stop going up because of what you think is high, nor will it stop because of what you think low and end the downtrend. Some people are complacent because of their accidental prediction success, and finally develop the prediction of the top and bottom of the market into the goal they pursue tirelessly in their investment career. This is actually a fundamental misunderstanding of the market. As a result of this operation, fortunately, the stop loss continued, but unfortunately, it was ruthlessly eliminated by the market in one market. Some investors have already been able to deeply understand the most important means of survival in the capital market, but due to the doomed mistakes at the beginning, they cannot go beyond the ordinary and enter the realm and realm of masters in their entire lives. The so-called bottom-hunting and finding the top that we often hear come from blind predictions of the market, but the real situation is that the market will never stop going up because of what you think is high, nor will it stop because of what you think is low. Stop the downtrend. Some people are complacent because of their accidental prediction success, and finally develop the prediction of the top and bottom of the market into the goal they pursue tirelessly in their investment career. This is actually a fundamental misunderstanding of the market. As a result of this operation, fortunately, the stop loss continued, but unfortunately, it was ruthlessly eliminated by the market in one market. Some investors have already been able to deeply understand the most important means of survival in the capital market, but due to the doomed mistakes at the beginning, they cannot go beyond the ordinary and enter the realm and realm of masters in their entire lives. The so-called bottom-hunting and top-finding that we often hear come from blind predictions of the market, but the real situation is that the market will never stop going up because of what you think is high, nor will it stop because of what you think is low. Stop the downtrend. Some people are complacent because of their accidental prediction success, and finally develop the prediction of the top and bottom of the market into the goal they pursue tirelessly in their investment career. This is actually a fundamental misunderstanding of the market. As a result of this operation, fortunately, the stop loss continued, but unfortunately, it was ruthlessly eliminated by the market in one market. Some investors have already been able to deeply understand the most important means of survival in the capital market, but due to the doomed mistakes at the beginning, they cannot go beyond the ordinary and enter the realm and realm of masters in their entire lives.
Investors who have the opportunity to understand Gann, the great investor of the last century, should know that Mr. Gann's forecasting methods are quite complicated, such as Gann Angle, Gann Quartet, Gann Regression, Gann Time Window and so on. But Mr. Gann's trading system is quite simple. Gann's attitude towards forecasting and trading is that he will never interfere with trading because of forecasting. In actual trading, he will always trade only following trading signals. Gann's twenty-one transactions mentioned in "Forty-five Years of Wall Street" published by Mr. Gann in his later years should be regarded as the prototype of the most basic trading system.
6. Trading system
Investors who want to make long-term stable profits in the foreign exchange market must successfully solve two major problems. 1) How to find the non-random part in highly random price fluctuations; 2) How to effectively control one's own psychological weakness so that it will not affect one's psychological decision-making. The practice of many investors has proved that the trading system is a powerful assistant for investors in the above two aspects.
Because as an effective trading system, first, it must have at least been tested by historical data, and it must have relatively good trading performance, which shows that this system may have the ability to trade at highly random prices at least in the past Find non-random components in fluctuations and use them in transactions to generate a certain profit rate. The second is that the system can help you answer the following at any time:
Trade direction, entry point, exit point, and stop loss issues. Help you overcome the influence of the dark side of human nature.
For any transaction, if you know when to enter and when to exit in advance, what is the maximum loss of a transaction error? If you can control the weaknesses of "greed, fear, and luck" in your human nature to the maximum extent, and your trading system is completed, you can roughly know the approximate winning rate and success rate of the trading system based on history, even in the short term Its trading performance is not the best, but from a long-term performance, you should have full confidence in it. We say that Sampras has been ranked No. 1 in the world men's tennis for several consecutive years, but it does not mean that he can win every round and every ball. But his overall winning percentage must be the highest. The principle of the trading system is exactly the same. As long as your system works reasonably well, your job in the future is to optimize and personalize your system and execute it resolutely. In practice, the establishment of a trading system may not be the most difficult, but often the most difficult is the implementation of the system. As the company's fund manager Li Huage said, the trading system and trading signals must be executed with military discipline. I believe this is the key to his long-term stable profitability.
In addition, many experienced investors know that the most painful decision at the time often turns out to be the most successful decision afterwards. The key factor in its connotation is that the pain threshold is approximate for most investors. Therefore, whoever can overcome this threshold puts him ahead of other investors. The reason why you choose to cut your position when you are in the most pain, but the market miraculously reverses is because other investors are in the same situation. And finally made the same choice. But in fact, at this most difficult moment, if you endure it again, the result may be different. It does take strength of will of steel. But the trading system makes it much easier to execute. Investors can completely transform the selection process from the fuzzy state dominated by emotions into a quantitative and numerical selection process, that is, simply judge the qualification of the signal system and make up their minds to implement the signal system.
Without the help of a trading system, investors may need many years of exploration to bring their own psychological quality to the level required for successful investment. But with the help of a trading system, it is possible to shorten and speed up the process considerably. Investors can judge the soundness of their own psychological quality according to the degree of implementation of the signal system. When the investor can accurately and comprehensively execute all the operating signals of the trading system for a long time, it can be said that the investor has really opened the door to the palace of success. Whether the system is a success or a failure. The exercise of the investor's psychological quality obtained through accurate and correct operation will make him no longer have any insurmountable obstacles in front of him. This ability to bravely face oneself will enable investors to eliminate the influence of many unfavorable aspects of human nature, and simplify investment success into a purely technical problem.
Many famous investors in history and contemporary times rely on mechanical trading systems for investment operations. Some have been quite successful. Therefore, for ordinary investors who are not yet very successful in psychological quality and investment methods, using and adopting trading systems for systematic trading will be a shortcut to investment success.
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