Real stable profits cannot be achieved through simple repetition. Every choice has its benefits and costs. The key is to clearly identify these benefits and costs.
After learning about various trading theories and methods from various experts, big names, and big Vs, many investors are eager to apply them to actual operations, only to find that this knowledge does not bring the expected results.
In fact, we are now in an era of knowledge overload. Everyone has a lot of knowledge, but the authenticity of this knowledge is often difficult to distinguish, yet we are still constantly pursuing more knowledge.
Learning is not simply the accumulation of knowledge, but a process of constantly negating wrong knowledge and removing the false from the true. If an investor does not have the ability to distinguish the true from the false, then this knowledge may be harmful to him.
Because wrong knowledge will not only fail to help him make a profit in the market, but may also become the reason for his loss. There are a hundred bearish conditions and evidences on this side, and there will be a hundred bullish conditions and judgments on the other side.
There are various trading theories and methods in the market, such as value investment and technical analysis. Although technical analysis such as volume and K-line pattern research is sometimes effective in short-term trading, the mythical parts of them are essentially just probability issues. This analysis method cannot guarantee long-term stable profits because the external conditions of the market are always changing.
There is no need to believe in many so-called "great gods" or "experts". For example, I once believed in some people who claimed that they had thoroughly studied things like trading volume and K-line patterns, and could read the actions of the so-called market makers and predict future rises and falls.
People who are involved in many superstitious things are often deeply involved in them and cannot extricate themselves. It is not that they are telling lies against their conscience, but that the lies have already convinced themselves. After all, no one likes to tell lies every day and live with a sense of guilt.
However, the mythologized part of the prediction is essentially just a probability. Under any external conditions, there will be some people who just happen to meet the external conditions at this stage. And claiming that one's own learning method or trading method is so great is nothing more than a quack pretending to be a wizard, nothing more.
In fact, the results of short-term transactions cannot determine the ultimate good or bad, right or wrong of long-term transactions.
Using the volume of certain K-lines to understand what is happening is the result of using induction, and the nature of induction is unreliable. Induction summarizes things and draws a conclusion. For example, we conclude through induction that all crows in the world are black, but this does not mean that white crows do not exist.
We do this by assuming a certain initial condition and then deriving the result. For example, if I assume that the trading volume is increasing, it means that the market makers are accumulating shares, and then we can deduce that the market will rise tomorrow.
Of course, it is not easy to achieve absolutely reliable initial conditions. If you mistakenly take some of your own unrealistic beliefs as initial conditions and then deduce the results, there is a high probability that it is just a wrong proposition.
In fact, short-term trading does not even require much knowledge. It only requires that the short-term external conditions just meet your trading strategy.
A friend of mine has a simple and crude method of doing short-term trading contracts. He counts on his fingers and talks a lot. I asked him for advice.
#高手技巧 He admitted that he would look at the weekly trend first, then the 3-day trend, then the 1-day trend, then the 12-hour trend, the 8-hour trend, the 4-hour trend, the 2-hour trend, and the 1-hour trend. I asked what about other trading volume depth charts?
Isn't there any news or anything like that that can be used as a reference for the auxiliary line RSI?
He replied: It is totally useless.
I asked again: How do you determine the trend? What is your interpretation and analysis of the candlestick chart and the market? Support line, average line, strong pressure line, points, etc.?
He replied: What the hell? What analysis, what interpretation? I only understand the basics. I am sure the trend is going up or down, so I control my position and do it. I don’t care about anything else. I leave when I make a little profit, and then wait and see. I only make 5 orders a day.
I was confused: Can that be done accurately?
He laughed: 85% I have a unique skill
I am humble: I didn't ask~~
He said seriously: Listen carefully, first look at the overall trend of the market, and compare it with today's trend. For example, if the current upward correction is not high, open more, control the position and add positions to lower the average opening price. As for what point to open, it doesn't matter, just add positions. As for how to verify whether your judgment is correct? Just look at the 30-minute line. You don't need to zoom in, zoom out a little, and you will know by taking a glance and counting?
Me: I am still confused. What are you counting?
He: There are not as many red ones as green ones~~~~
.......................................................................What a great God!
In fact, every trader makes profits dynamically in his investment. Unless you only trade once and then leave the market, your profits are dynamic.
Short-term trading behavior often leads to three results due to frequent changes in external conditions: better profit feedback in the short term, occasional losses and profits, or short-term losses.
The experience in trading strategies includes cognition, thought, structure, trading knowledge and practical skills, including execution, mentality and experience. The trading system includes trading rules, fund management, risk control and many other elements. The actual external trend must also be added, and at the same time, each factor affects each other.
After making a profit, investors may mistakenly believe that their own judgment and experience are working, thus constantly strengthening their recognition of the current trading method. However, as external conditions change, this method may be difficult to continue to make a profit, and may even lead to huge losses. Investors tend to constantly adjust their strategies in an attempt to grasp the laws of the market.
In the pursuit of quick profits, many investors do not realize that quick profits and quick losses are actually the same thing. The root cause of both is the same, both are based on short-term market fluctuations, which can bring huge risks. Behind quick profits, there is often the possibility of quick losses.
In fact, there will inevitably be some users with extremely high profit feedback in the market at any stage. Therefore, I believe that there will always be a group of people whose trading methods just cater to short-term external conditions. Investors often continue to pursue so-called better short-term trading methods after making profits. The other two situations will also fall into this cycle.
I believe that at any time, in one area or in certain areas, some people can indeed find a trading method that best suits the market characteristics, and then in their long trading career, that kind of short-term profit is just like winning some small prizes in the lottery, and will eventually become painless and useless.
Anyone who enjoys it without knowing it may be setting a destructive trap for himself. Being obsessed with short-term trading profit feedback will lead to an extremely unstable state of the whole person, and will also cause an investor to constantly indulge in various factors of investment trading strategy indicators and data, and constantly doubt and analyze various elements. He hopes to master the market rules or some better trading methods, choose better trading objects, etc.
Take Buffett for example. If we look back at Buffett's profit feedback timeline, it is relatively stable. Then through today's comparative calculations, we can draw a conclusion.
During the period when Buffett was trading, the market just catered to his trading method, rather than Buffett's method beating the market. In other words, Buffett is the product of certain external conditions, rather than Buffett creating those external conditions.
Of course, this is just an example, and I don't mean to look down on Grandpa Buffett. There is a saying that heroes are made by the times, it's either you or him, heroes are just the product of the times.
In this big market, all kinds of teachers always seem to make profits very easily, appear confident in front of others, and like to give advice.
However, deep down in their hearts, they know very well that it is extremely difficult to maintain a 20% annual compound growth with various seemingly easy trading methods. Of course, these people will not publicize their failures or what they cannot achieve.
When we learn any trading method, we should remember that any trading method we choose should be able to adapt to changes in external conditions as long as possible. Otherwise, we will fall into the cycle of constantly adjusting various trading elements, and it will be difficult to truly and stably achieve profit feedback.
To do a good job in position management and risk control, you need to make correct trading judgments and experience. This can only be achieved by constantly proofreading and revising in the face of reality, and gradually mastering it through long-term practice and proofreading.
Trading is a practical behavior, not a theoretical discussion. Everyone entering the market is like a baby learning to walk. Without constant practice and correction, it cannot be achieved.
Find your own strength and position, don't be anxious, and don't envy others. Everyone has come this way step by step. If you earn a lot, you can still make 20 to 20 million, and if you lose a lot, you can still lose more.
The key is how much money you have and how big a thing you can do. Two people walk into the same store at the same time. He can win 5 million, but you have nothing. Don't try to replicate the illusion of 2,000 to 1 million. The steady compound interest growth is the reality to recognize after the loss.
Execution is a very exaggerated thing. It is not nonsense. If you see a trend correctly, you can control the risk of your position with 200 or 20,000 without using high leverage.
This is a standard of execution. Many people make money in the early stage but lose it later, back and forth.
The better ones neither made any profit nor loss, the bad ones paid tuition fees, and the worst ones lost all their money and were heavily in debt.
Even if you, me and him are all natives of Shenzhen, the compensation for demolition is different, and it is impossible to replicate the miracle of Fengkou.
Risk assessment and control are always the top priority for any financial institution. If you are greedy, you will do spot trading. If you are super greedy, you will do super spot trading. Pay enough tuition fees and do contracts when the price rises and falls in front of you without changing your expression. Never touch high leverage.