Most people join the capital market not out of interest in economics and finance, but to make quick money. Stocks, futures, and foreign exchange are all high-risk financial tools. Although they can create a large number of people who get rich overnight in a short period of time, they can also wipe out the wealth of a group of people in a shorter period of time. Before trading in real time, novice traders must completely abandon the fantasy of getting rich overnight and think more about whether their mental and financial conditions can withstand losses.

1. Change profit thinking to risk thinking

Many people comfort themselves by saying: I am not greedy, I just want to make a little money, and there will be no problem. Is it really easy to make a little money? No, it is harder than climbing to the sky! I do not deny that many novice traders can make considerable profits in the experimental order placement stage by relying on luck, but when the luck runs out and they really rely on their strength to trade, many problems of novices will be completely exposed. Changing profit thinking to risk thinking, and changing the fantasy of making a little money to the reality of losing a little money, this is the shortcut for novice traders to mature quickly. It is difficult to make a little money, but it is easy to lose a little money, because the former is uncontrollable, while the latter is controllable.

Before placing an order each time, reduce your position and lower your stop loss. As long as you follow the principle of "orders must be accompanied by stop loss", the crocodile of the capital market will not be able to do anything to you. In the novice stage, it is important to experience your own psychological changes every time you place an order. The expectation, hope, disappointment, and pain must be deeply imprinted in your mind. This kind of light position operation should last at least half a year, with no upper limit, until you think you have no hope of "getting rich overnight".

Some people may question: such a conservative approach will not make money! I admit that a light position with a small stop loss does not make much money. A mature trading model must be to place a heavy position and increase the stop loss in the face of a big opportunity. However, novices cannot judge which one will be a big opportunity. They often regard all transactions as big opportunities and wish to trade with a full position every time. The result can only be crying without tears.

2. There is no need to trade a demo account, start with a small real account

Many seniors regard the operation of demo accounts as a necessary means of training for novices. Although I also started my trading career with a demo account, I do not agree with this training method. Novices cannot take demo accounts seriously from a conscious point of view. After all, losses or profits are false, and the psychological pressure is very small, or even no pressure.

The biggest difficulty in trading is that the market fluctuates silently, but the traders' hearts are always in turmoil. In the novice stage, you must endure all kinds of psychological torture, such as not being able to eat or sleep during the period of floating losses, and having wild thoughts all day long; for example, you are extremely excited during the period of floating profits, spend money lavishly, and brag to others.

The author advocates that novices trade with a small real account. This account can be a few hundred or a few thousand yuan, as long as it can make you feel "cared" psychologically. In the novice stage, profit and loss are not important, but the real psychological experience is crucial. If you can't stand the mental torture, leave the trading market as soon as possible.

3. Read more, think more, watch the market more, and place fewer orders

Books are the ladder of human progress. They can not only teach you knowledge, but also hone your ability to endure loneliness. I recommend this blue book (Technical Analysis of Futures Markets), written by John Murphy. The book lists the use of common technical analysis tools on the market. The advantage of this book is that it is very comprehensive, but the disadvantage is that it is not deep enough. Therefore, after studying this book, novices need to think deeply on their own.

As the saying goes, "Practice is the only criterion for testing truth", it is definitely not enough to just read books without watching the market. Use the time others spend drinking coffee to watch the market, imagine how you will react when facing a specific historical trend, and observe the results. Newbies will make the same mistake, that is, they can't wait to place orders, just like they are addicted to trading. You should know that 70% of the market conditions are volatile and there are no opportunities for operation. The more you trade, the more times you will misjudge the signals. Placing fewer orders and learning to restrain yourself will do more good than harm to everyone.

4. Start with the long term and don’t get too caught up in short-term trading

MT4 software provides short-term trading charts of one minute, five minutes, and fifteen minutes, but it does not mean that operating these short-term charts is correct. In my opinion, short-term trading is more difficult than medium-term trading, and medium-term trading is more difficult than long-term trading.

The shorter the trading cycle, the more you will fall into a vicious circle of probability statistics: the higher the winning rate, the lower the profit and loss ratio; the higher the profit and loss ratio, the lower the winning rate. The final result is always that the net profit and loss is not much, but the spread fee is huge. Short-term trading is suitable for entertainment, and it is necessary to do it but not often; long-term trading is suitable for profit, but most people lack sufficient wisdom, courage and patience. If you are a novice trader, if you value daily and above cycle trading from the beginning, then you have surpassed more than 90% of your competitors.

summary

There are also differences between novices. New college students and new white-collar workers have different views on the market; novices who are introduced to trading by friends are different from those who open accounts on their own; and novices who are wealthy and those who can barely make ends meet have very different understandings of trading. Everyone is unique, and everyone makes some common mistakes. When entering the capital market, forget your past achievements or regrets, and accept the baptism of cruel trading with a humble and cautious heart.