The most fundamental reason is that frequent trading can easily over-consume your brain power and emotional self-control, and destroy the consistency of your trading system. This is the root cause.
Those who have worked in the US DT+, futures+ and foreign exchange+ markets should have a deep understanding of this. If you look for various trading opportunities at the 1-minute level, you may find that there seem to be many opportunities, whether it is shocks or breakthroughs, and there seems to be no shortage of various forms.
But after a day of trading, people are exhausted and the gains are very limited. . . .
Intraday trading of U.S. stocks, futures, foreign exchange, and cryptocurrency contracts are all two-way, with freedom for long and short positions.
Once a person starts high-frequency trading, it is very likely that he will want to do both long and short trades, and will do them. Then you will inevitably fall into this situation: you have to find reasons for your long orders, and you have to find reasons for your short orders.
If there is no reason, then it is just random trading. If solid reasons are needed, then can these conversions really stand up in the 1-minute chart or intraday time frame?
This is equivalent to a trader who is constantly in a state of competition between the left and right hands, constantly trying to "clear zero", and constantly overturning the original short-term assumptions about the market. . . But the market may simply be moving in a disorderly manner in the short term.
As a result, the traders’ brain power is consumed crazily, and adrenaline is continuously secreted at high levels. The mind and body are in a very high-pressure and exhausted state, which is also the most important reason why many high-frequency traders drink alcohol or smoke crazily or drink coffee.
So it is obvious that while the trader's brain power is being consumed crazily, the consistency of this person's trading system must have been severely damaged.
It is difficult for a mature trading system to send out frequent trading signals. How can there be so many markets that are really worth doing, especially trending markets?
Most of the market moves in a disorderly manner.
It is easy to get lost by going back and forth, thinking and working hard within a very short-term framework.
The trend at the 1-minute level may be just a correction of a larger trend within the day. It is very random and can be easily disturbed by external forces.
The most typical example is the intraday plug-in market +, which beats traders on both sides.
The same is true for false breakouts. The cost of creating false breakouts on lower time frames is very low.
An effective trading and investment decision requires multiple resonances of technical aspects +, fundamental aspects +, capital aspects +, and emotional aspects +. The more resonances, the higher the chance of winning. The odds need to be calculated separately.
If every trade required advance planning (even if not on paper),
All of them require your brain to intervene and the trading system to intervene too quickly, which will inevitably lead to a decrease in accuracy and a decrease in severity.
A sophisticated and excellent hunter will not act rashly. He will strike with lightning speed and a sure chance of winning. The so-called pattern that many people talk about is actually a high-level resonance. The higher the pattern, the more resonance elements involved in trading and investment, and the more invincible you are.
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