The longer you stay in this market, the more you will understand that "the experience of making big money is often highly non-replicable and bears the imprint of history." What can be summarized are often just some mental methods, not how to do it specifically.
“Winning is random, but losing is not random” - this is the only secret that can keep you in this market for a long time.
If you lose randomly, you are doomed. There are new reasons every time, and you may even fail to make a conclusion after falling into the same pit several times. This is the reason why you die quickly.
It is reasonable to constantly draw boundaries, constantly test out safe zones, and ultimately control "big losses" within your bottom line.
In other words, a wrong trade means that you do not follow the rules, but try your luck outside the safe zone, which leads to a huge loss that breaks the bottom line. This is something you must review carefully and is not tolerable.
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Continuous profitability is based on the “replicability” of trading experience;
The “replicability” of trading experience includes both the experience of making money and the experience of losing money;
The experience of “making a lot of money” is often not replicable;
Therefore, you must ensure that there can be many reasons for making money, but you must be able to control the reason for losing money to "one". Remember every experience of losing a lot of money to avoid repeating the same mistakes.
Since there is no way to summarize "how to win big", you can control "avoiding big losses". Plug all the loopholes that may cause you to "lose a lot". Note that it is not "no loss allowed", but "no loss below the bottom line".
Such hard constraints will make your previously seemingly numerous choices become relatively limited and more purposeful, rather than blindly relying on luck. This is like "relying on luck with a safety rope tied to it."
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"Making a lot of money and efficiency" are definitely contradictory. Wealth accumulation ultimately depends on the compound interest effect.
Losing a little money within the rules and within the bottom line is a "reasonable loss" and a loss you can afford. There is nothing to worry about. Betting depends on the result. It is normal to win or lose. If you are soft-handed, it means that you have not calculated well and misjudged your tolerance. This requires modifying the running-in rules.
Since a single transaction is random, just like flipping a coin, there is no absolute certainty. So, if you want to win in this game, you must rely on the advantages of probability and experience accumulation.
Simply put, games where you're kicked out if you lose should definitely be ruled out, even if you're expected to win a lot.
As the saying goes, "one hand determines the outcome", the most reasonable choice is to "not participate".
If you can’t afford to lose, you can’t win. In other words, if you can’t afford to lose, don’t play.
This is a subjective choice, and it is a choice made when you know your bottom line. People are different, and their bottom lines are definitely different, so "self-knowledge is important." Don't think that you and others are at the same starting line when facing the same market. The starting lines are not the same at all.
If you force yourself to choose a game that is not suitable for your style, without considering the bottom line beforehand, or not knowing whether you can bear the risks brought by this game, then as long as you keep playing, you will definitely be a loser, and the result is doomed. Because good luck will eventually run out.
Therefore, to establish a rule system is to be able to select the target and participation method that suits you in a simple way. No one knows you better than yourself, and the losses you have suffered and the money you have made can help you establish this rule system.
Why is it impossible for beginners to build a system that suits them? Because they don’t know how much money they can make and where their blind spots are. It’s like your expectation of “what others think of you”, which is difficult to match with the real you. Therefore, there are many places in the system you build that need to be adjusted in practice, and it takes time to go through enough changes to test it.
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It is easy for beginners to tend to summarize their most proud trades and try to "replicate success".
This is a misunderstanding, and many people never get out of it.
This is like looking at the K-line to do a pure price pattern comparison. Due to the single perspective, you cannot fully grasp the winning rate. In other words, your summary often does not lead to a high winning rate, especially when the sample is insufficient, which does not conform to the principles of statistics.
If profits and losses are random, this is a game that relies purely on luck. If you blindly summarize successful experiences, you will find that there are "too many" that seem to be right, but also wrong. As long as one detail does not match, your summary will lead to an error.
This is why some people can make money by luck when they know nothing, but when they learn to a certain level and understand something, they start to lose money steadily. This is because they are deliberately pursuing certainty, and this "artificial" certainty is actually imagined and does not conform to the basic principles of the objective world.
If you can understand what I said before, it is no exaggeration to say that your whole way of thinking will be overturned.
