The contract is 70% mentality and 30% technology
How to cultivate a healthy trading mentality in the field of cryptocurrency? When trading contracts, almost everyone will be troubled by the trading mentality to a greater or lesser extent. The quality of a person's mentality directly affects whether the trading system and trading technology can be strictly implemented. Those who can control their emotions tend to be elegant, and those who can adjust their mentality are usually successful. Financial practitioners often say: "70% mentality, 30% technology", which shows that technology is only at the tactical level, while mentality has a higher strategic significance. Cultivating a good trading mentality has therefore become a goal that traders strive for.
1. Develop good living habits
Maintaining a good quality of life and getting enough sleep can ensure that traders have plenty of energy and sharp reaction ability when trading. Excellent traders usually choose to be accompanied by loneliness and challenges. Their seemingly alienated attitude towards life is actually a typical characteristic of successful traders.
2. Moderately control greed and fear
Greed and fear are human nature. It is unnecessary and impossible to completely suppress greed and fear. Moderate and reasonable greed helps improve technical level and profitability. Moderate fear helps to cultivate risk awareness and ensure timely stop loss. There is no clear boundary between greed and aggressiveness, and fear and self-protection are also difficult to define accurately. However, unfounded excessive greed and inexplicable fear caused by ignorance are both undesirable.
3. Avoid excessive attention to account equity and market price
Some people will unconsciously stare at their account equity when trading contracts, and their emotions will fluctuate with the fluctuation of equity, which will seriously interfere with their trading mentality and also affect their judgment of market conditions. Some people are used to staring at the buy and sell orders, which may help analyze price fluctuations in ultra-short-term transactions, but for slightly longer short-term transactions, it loses its meaning. Over-focusing on the market will also have a negative impact, just like over-focusing on account equity.
4. Correctly understand stop loss
Stop loss is part of the trading process and is often used by even the best traders. Normal losses are the price you have to pay to get the ultimate profit. Therefore, stop loss is a normal strategy in trading and should be faced calmly. Stop loss is not error correction. Success does not depend on the amount of profit or loss, but on whether the rules are followed. Treating stop loss as error correction will lead to an endless process of constantly improving the trading system and at the same time put yourself in a fear of market uncertainty. Therefore, as long as it fits your personal trading system, stop loss is always correct. Stop loss is not a mistake, and traders should face it calmly and execute it calmly. Remember that the profit or loss of any transaction, even the profit or loss of a day, cannot determine the fate of a contract.
5. Use appropriate funds and positions to participate in transactions:
Money management: Spreading your money across different assets or transactions to avoid being too concentrated in any one investment to reduce risk.
Position control: Determine the position size for each trade to control risk. Too small a position may make the trade insignificant, while too large a position may cause the loss to have too great an impact. Reasonable position planning helps to stay calm and enforce discipline.
6. Be patient and wait for opportunities:
Market opportunities: Not every market fluctuation is suitable for entry. You need to wait patiently for opportunities that suit your strategy and risk tolerance.
Frequent trading: Excessive frequent trading may increase costs, reduce efficiency, and confuse the mind. Patiently waiting for the right time can help increase the success rate and reduce losses.
Trading philosophy: Developing a good trading mentality requires continuous learning and practice, as well as understanding the thinking of the banker and the market mechanism.
Trading techniques and strategies: Mastering trading techniques and choosing a trading strategy that suits you is the key to success, which requires continuous learning and practice.
By applying these suggestions in combination, traders can gradually develop a healthy trading mentality, improve the accuracy and execution of their transactions, thereby better adapting to market changes and achieving long-term and stable trading results.
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