December 2, 2024

Today's Reading Sharing

23. The basic goal of a trader is to identify existing opportunities, not to perceive painful threats.

24. In a losing streak, you hold a negative mindset based on fear, thereby noticing the possibility of failure more and hesitating. In a winning streak, you hardly consider the risks, even thinking the market will make your dreams come true, making it easy to over-invest financially.

25. If traders are categorized based on their achievements, they can be divided into three main categories.

The smallest category among active traders, accounting for no more than 10%, consists of long-term profitable winners. Their asset curve rises steadily, with only occasional minor decreases. When assets decrease, it usually indicates normal losses that occur with any trading method or system they encounter. They have not only learned how to make money but are also no longer swayed by the psychological forces that trigger cycles of boom and bust.

The second largest category is long-term losers, who account for about 30% to 40% of active traders. Their asset curve reflects the long-term winners' asset curve but in the opposite direction. They have many losing trades, with only an occasional profitable trade. Regardless of their trading experience, there are still many things they have not learned. They either misunderstand the essence of trading or are trapped in this illusion, making it nearly impossible for them to become winners.

The largest category is the "booming yet declining" group, which accounts for 40% to 50% of active traders. Although they have learned how to make money, they do not know the trading skills to preserve profits. Therefore, their asset curve resembles a roller coaster, rising sharply and steadily before plummeting. This cycle continues to repeat.