Why are many people unable to make stable profits in trading?
Trading is a very in-depth knowledge, and most traders probably have their own trading system. As mentioned in the previous article, most of these trading systems are statistical and probabilistic systems, which often fail to achieve stable profits and affect traders' trading confidence. Therefore, in trading, what everyone discusses most is the issue of trading psychology-mentality.
How to prevent your mentality from being affected by the disk, and how to build confidence in your own trading system, this is what this article will teach you.
01
trading crowd
Today's ordinary traders are roughly divided into two types in trading preferences: one is aggressive, and the other is conservative or timid.
Aggressive traders: they are always uncontrollable, and think that this is a trading opportunity at any time, and the trading must be very frequent. And often in trading, in addition to rational analysis, it is more the result of impulsiveness, and the stop loss will also be irregular, often because the mentality cannot bear it, and the final result is a stop loss, or it ends with a liquidation.
Timid traders: This kind of traders are afraid of the market. During the slow movement of prices, they always have a calm mind. Don't dare to operate. There are very obvious problems in the process of holding positions. For example, before opening a position, the original plan is to stop the loss at 50 points, but the price after opening the position is opposite to the expected direction. Often the stop loss is exited early, and the price after exiting the market is in the original expected direction. gone. Or in the process of holding positions, if the market encounters a slight pullback, you will rush out of the market, but you will not get the expected profit.
The above two situations are a long-standing malady for most traders. For such malady, we must find the cause and prescribe the right medicine.
right deal
First of all, let's use logical reasoning to discuss what the correct trading process should look like.
Only when you have the desire to trade will you want to operate. Then before the operation, you must have a complete trading plan. This plan should be your entry, stop loss, take profit, position holding process, etc., and how to deal with any risks you encounter.
The risk I am referring to is a treatment method in your trading rules, not the risk caused by normal market fluctuations. For example, during your position holding process, a very important focus event occurs, such as: interest rate, non-agricultural , Presidential elections and other political factors.
When the market goes according to your original plan, and the risk point in the middle does not have a substantial impact on your position, then you should implement the plan to the end.
If there is a major risk, you should have a plan to control what kind of control at the node before the risk, which is all part of the plan. Now that you have a plan first, you must have a stable trading system before the plan.
This trading system must have a long-term stability rule, you only need to implement this rule instead of artificially intervening.
So you will find that a stable trading system is what you really need; with a stable system, you will have confidence in yourself when trading; with a stable trading system, you only need to do three things: The word "execution". At the same time, execution power can only be achieved based on a complete and stable trading system.
03
Trading System
Now I will tell you a simple and practical trading system:
First: First find out that there is a good capital inflow on the disk.
Second: After the inflow of funds, there is a full long-short game process.
Third: After the game, the price has a good consistent behavior, and this consistent behavior is currently the strongest consistent behavior.
Fourth: The price returns to the place where the money flows into the game or the place where the consensus first occurred.
As shown below: Gold 2019.2.1 trend
Then this is a very certain trading opportunity. For this kind of trading opportunity, we can be sure that the winning rate is more than 90%. Of course, after this kind of opportunity is optimized, the winning rate can be further improved as a deterministic trading principle.
Don't think about it for the time being, whether the winning rate I mentioned can be achieved. Let's make a hypothesis first. Under this rule, what should your transaction look like?
We should find this kind of trading opportunity on the disk, or we can say that we should wait for this kind of trading opportunity. When the disk does not fall under this kind of trading rules, you don’t care about him. You can admit that you don’t understand the disk. It doesn’t matter. What you need now is to find the part you understand There is only this rule, you only need to implement this rule, and all other fluctuations in the market have nothing to do with you.
When you find that there is a transaction on the board that meets this rule, you execute it. This is the execution power. When the trading system can be stabilized at more than 90%, you have absolute execution power. You must It is a stable and profitable state.
If a worker wants to do a good job, he must first sharpen his tools
This world has its own rules in any environment, such as the laws of a country, the system of a company, these are all rules.
When you implement within this rule, there must be no problem. But as long as you violate the rules, you will definitely pay the corresponding price, and it is the same in the trading market. In this trading market, we must first have deterministic and stable trading rules,
You only need to implement this rule, and only do things within the rules, and profit will be so simple.
The trading system mentioned in this article, Mulai Trading Academy will explain it to you in detail in the follow-up, so stay tuned!
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