#交易理论

Let's talk about the realm of trading

1. The first realm of trading, I call it "sponge".  The characteristic of this stage is that you absorb and learn various theories, knowledge, and principles crazily. From Dow Theory to Gann Theory, from K-line charts to curve charts, from financial analysis to industrial theory, from macro theory to trading psychology... In short, everything related to trading is absorbed crazily. This is the only way for everyone to grow in investment, and it is the process of laying the foundation. The more solid this foundation is, the further you can go in the future. It is not difficult to absorb like a sponge, but it is difficult to remove the coarse and retain the fine, difficult to digest, and difficult to integrate. However, many people unfortunately stay in the absorption stage. They are proud of how much they know and are complacent about it. And this stage is still a long way from stable profit.

2. The second realm of trading, I call it "lost".  The characteristics of this stage are: I understand the principles, but why don't I make money? The characteristics of the complex physiological system of human beings determine that there is a long circuit from understanding a certain principle to executing it. This circuit may be disturbed and damaged by many things. It is like the 25,000-mile Long March of the Red Army, which had to climb snow-capped mountains and cross grasslands, endure cold and hunger, and deal with the enemy in various ways, and survived many dangers. The difficulty of this circuit from understanding the principle to executing it is no less than the 25,000-mile Long March. Because on this road you will encounter an extremely powerful enemy, that is, your emotions, such as greed and fear. The power of emotions is so great that its power is 100 times that of your rational power. The most terrifying thing is that this emotion is a part of you. No matter how powerful the external enemy is, it is not terrible. But your emotions are not external enemies, they are of the same origin as you, they are a part of you, they are you. For example, when it is time to stop loss, you are reluctant to stop loss, and you hesitate to do it. This reluctant part is also a part of you. It is not an external enemy, but in your flesh and blood. No matter how powerful a person is, can he defeat himself? That is why the ancients said that it is so difficult to integrate knowledge and action.The difficulty lies here. Many people get lost in this long loop for the rest of their lives.

3. The third level of trading, I call it "ruthlessness". Since emotions always interfere with us, let's make ourselves ruthless. The opening of the Sunflower Manual says that if you want to practice magic, you have to cut off your own body with a knife. This is what it means. When making decisions, try not to let emotions get involved. For example, when stopping losses, practice being ruthless at the moment when your hand rises and the knife falls. In fact, this stage has entered the practice of "good protection of thoughts" mentioned in the Diamond Sutra. Only by focusing on the present and not being bothered by past trading successes or failures. You can be "ruthless". This stage is usually the beginning of profit.

4. The fourth level of trading, I call it "three good students". The characteristic of this stage is discipline, especially discipline. The ruthless stage shows that you still have emotions, but you try hard and forcefully block emotions out. But when you simply execute trading discipline, things become simpler. You will develop a habit of making trading plans for the next day after the market closes every day. The next day, no matter what happens, you will follow this plan. No matter what the cost, you are happy to follow the discipline. For example, your trading plan yesterday stated that you would stop loss if a certain token fell to 5.38 yuan. As a result, the lowest price today dropped to 5.38 yuan, you stopped loss as planned, and then it went up all the way. In terms of the transaction results, today's operation was very bad. But in terms of the transaction process, your execution of the transaction plan was perfect. At this stage, you begin to understand how to treat the transaction results and the transaction process separately, which is a very important step. The correct trading process is 100 times more important than a correct transaction result. Because the correct results of several transactions are short-term, and in the long run, they have little impact on your investment career. The correctness of the trading process proves that you have developed good habits, which is a long-term and important thing that can accompany you for a lifetime. In fact, the most terrible thing is that you use the wrong process to win the right result.For example, the plan states a stop loss of 5.38 yuan, but when the price reaches that point, you hesitate and do not execute it, and the price goes up later. On the surface, you have made a profit, but this is the most dangerous part. Because you have been "rewarded" by violating the trading plan. So next time you will further violate the trading plan. A thousand-mile dam is destroyed by an ant hole, and eventually your entire trading system will collapse.

5. The fifth level of trading, I call it "internalization".  You don't even need to write a trading plan every day (for 99.99% of people, it is still strongly recommended that you write one). Because all the disciplines and iron executions have been internalized. It's like a skilled driver, when to step on the accelerator and when to brake, it has been internalized. You have formed a trading system in your heart, and you subconsciously strictly follow this system to execute transactions.

6. The ninth level of trading, I call it "the great way is simple".  "The great way is simple, but it is only to pick and choose", this sentence comes from the "Faith Inscription" by Sengcan, the third ancestor of Zen Buddhism. I like this sentence very much. After you have tried thousands of methods and used countless formulas, you will finally find that the world is actually simple. What can remain effective over the long river of time are simple and plain things. Seeing this, you will definitely feel that the road to trading is really not easy. It is like thousands of troops crossing a single-plank bridge. Some trading masters finally came out after experiencing several liquidations and ups and downs in life, and finally achieved enlightenment. The taste of it, only you know the cold and warm.