How to Go Against Human Nature in Trading? A Must-Read for Retail Investors!

As we all know, trading goes against human nature, but what exactly does it go against? And how should we go against it? I would like to share my trading experiences with everyone.

The vast majority of investors execute trades based on their feelings and emotions. For example, regarding taking profits, when there are profits generated, the fear of losing those profits makes most people choose to take profits. Taking profits is to eliminate the fear that retail investors have. Similarly, regarding stop-losses, the feeling of cutting losses is more painful than any pain in the world, so to avoid this pain, many retail investors choose not to stop-loss, which is also a result of following emotions. Another example is fund management; position management is an extremely complicated and tedious task that requires constant adjustment based on market conditions. This requires great execution power and patience. The most basic human nature is to seek benefits and avoid harm. Nowadays, people even lack the patience to watch a movie; who still has the patience to manage positions?

Because trading is very complex and painful, and human nature itself detests complexity and pain, the real way to go against human nature is whether you can manage your emotions and feelings, whether you can face each trade calmly. The method is to have your own stable trading system, using a standardized framework to understand our trading behavior. None of our trades should be blind.