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Strong trading confidence is a prerequisite for long-term profitability
"Having confidence is half the battle". If you want to have confidence in trading, the first step is to put aside your pride, humbly observe, respect and follow the movement of the market. Among the many failed transactions, a considerable part is caused by the so-called unyielding pride: because of the unyielding, you will not leave even if you lose, and you will open another order even if you stop loss, believing that you will get up where you fell. It is undeniable that this is indeed a tenacious quality, but in trading it can only be called stubbornness.
The process of formally building trading confidence will rely heavily on relatively objective data. This probability based on statistics will make the overall trading model more reliable. On this basis, traders will choose trading decisions that meet the definition of advantage, thereby avoiding strong subjective factors such as "I think, I believe".
Secondly, a lot of real-time and replay training is conducted on this model to obtain more personal practice data. This step will increase your confidence the most and most firmly, because it has already positively confirmed the fact of profitability from the results.
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Every transaction requires clearing your mind
The most ideal trading state is to have a "nothing" mentality in every transaction: no expectations for trading results, no emotions for ups and downs, no predictions for trends, no need to be right, and no so-called self-esteem.
The trading holy grail we are pursuing only exists in our own hearts, not in the market, nor in a certain trading technique. Each technique has its own advantages. You can use whatever technique you like. The important thing is to control your attitude towards trading.
I have previously shared tips such as loss-based quantitative trading and personal trading circuit breakers with you, which can allow traders to stop trading in time when they make mistakes to avoid excessive losses and imbalanced mentality. What few people know is that circuit breakers may also be needed when there are continuous profits: when traders start to make continuous profits and seem to be able to make money without much discipline, their inflated confidence will make them think "I am the sky", that is, they are floating. Once a loss occurs after this, the blow will be far greater than before, and traders are likely to be unable to recover from this state, so continuous profits also need to be timely circuit broken.
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The market is a mirror
The best way to control your mentality is to observe the market and your own behavior in the market. It will amplify all your psychological activities and reflect them back to you. Traders should learn to receive this information instead of ignoring it. How to stop loss and take profit? When is it necessary to use a circuit breaker? The answers to these key questions can be found in the market. For example, if the price movement stagnates at a certain key resistance level, this may be a signal to remind you to take profit; or if the past few orders in the trading records have no logic on the chart, that is the reason why the circuit breaker should be used.
Only by letting go of self-righteousness can you get closer to success; otherwise you will be closer to failure.
