In the past few years, I have experienced the ups and downs of the market as a trader, from initial ignorance to gradually forming my own trading style. This journey is full of challenges and gains. Here are some insights I've gained during the trading process that I would like to share with you all.
1. Develop and strictly execute a trading plan
Trading is like a planned battle; detailed strategies and plans must be formulated in advance. The plan should include settings for entry points, stop-loss points, and take-profit points, as well as methods for capital management. Strictly executing the trading plan can effectively avoid losses caused by emotional trading. As a predecessor said, 'Plan your trades, trade your plans.'
2. Learn to control risks
Risk control is the key to trading success. Before each trade, consider the potential risk-to-reward ratio and set reasonable stop-loss points. Successful traders are not those who can always catch big market movements but are those who can control risks and preserve their strength. Remember, losses are the cost of profits; accept losses but do not get used to them.
3. Maintain patience and wait for opportunities
Opportunities in the market do not always exist; often, patience is required. Excellent traders are like hunters waiting for the right moment, knowing how to remain calm before the opportunity arises and waiting for the best timing. As Marty Schwartz said, 'When the green mountains remain, there is no fear of not having firewood.' Maintain strength and wait for the market to provide clear signals before taking action.
4. Do not predict the market, but follow the market
Any prediction carries subjectivity, and market trends are often unexpected. Traders should abandon preconceived notions about the market and act according to market trends. Do not fight against the market; when the market trend does not match expectations, decisively cut losses and exit. Do not try to catch every fluctuation, but focus on the opportunities you can grasp.
5. Control emotions and maintain rationality
Emotional management is crucial during trading. Do not impulsively increase positions or trade blindly when losing, and do not be greedy and lose control when profiting. Face each trading result rationally, and learn from the experiences. Patience, determination, and rationality are important factors for successful trading.
6. Establish and improve your trading system
A mature trading system can effectively enhance the consistency and success rate of trading. The trading system should include rules for entry and exit, capital management, and risk control. Stick to your trading system, accept losses calmly, and value the final results. As one trader said, 'Ignore the process, focus on the results.'
7. Constantly summarize and reflect
Summarize daily trading gains and losses, keep a trading journal, and analyze the reasons for success and failure. Through continuous summarization and reflection, optimize your trading strategies and methods. Successful trades can be replicated; do not repeat mistakes.
8. Maintain a learning and open mindset
The market is constantly changing, and traders need to continuously learn new knowledge and skills. Pay attention to market dynamics, learn from predecessors' experiences, but do not blindly follow. Maintain an open mind, accept new viewpoints and methods, and continuously improve your trading system.
Trading is a long-term battle, not a short-term game for getting rich quickly. Moving steadily in the market requires continuous learning, summarization, and reflection. By strictly executing trading plans, controlling risks, maintaining patience and rationality, and establishing and perfecting a trading system, we can remain undefeated in a volatile market.