In trading, we often hear well-known sayings such as "go with the flow" and "cut losses and let profits run," which were once dismissed and not taken seriously. However, as I delve deeper into trading, I increasingly realize that these classics have been passed down for a long time because they often contain great value discoveries. They are the essence extracted by successful predecessors through countless trials and tribulations.
If you are also on the path to trading success, you will also feel that all your efforts will eventually gravitate towards this direction without realizing it.
There are various methods to achieve success, but they all involve deep cultivation in the right direction, after going through countless trials and tribulations. Trading is not a simple job at all. The so-called "great way to simplicity" is based on profound experiences and insights gained after pain and tribulation.
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When gradually entering the ranks of profitability, I suddenly exclaimed: Oh, trading is done like this. After going around a big circle, I returned to the simple words at the beginning. First of all, you must understand that this big circle is not in vain. Without going through this circle, it is impossible to achieve trading success. Secondly, only after going through this big circle, from trying various failures to trading success, can you know the reason and the reason. In the end, you will find that the simplicity and clarity at this time are definitely not the simplicity you thought at the beginning (brainless fantasy), but a kind of simplicity under a high level of cognition, a kind of wisdom.
In trading, how can we achieve the transition from "initial simplicity" to "simplicity of the great way"? I have also tried to summarize some necessary paths in trading, and I will make a simple statement here to strengthen my trading thinking, and also bring some thoughts to friends who see this article.
1. Learn to deal with losses. Trading has two sides: losses and profits. No one can be successful at the beginning, and no one can avoid losses. In the end, only a very few people succeed. The only way is to gradually move towards profitability after learning to deal with losses. If the loss issue is not well resolved, no matter how much profit, it will vanish into thin air, and even the principal will be devoured by the market. Traders must follow this order and must not think about how to make money first. No matter how much you earn, it's useless. Once the critical moment comes, the game is over.II. Identifying Opportunities. Only when the issue of dealing with losses is resolved can all remaining energy be devoted to embracing profits. The primary task is to identify where opportunities lie. To discover opportunities, one must first understand price fluctuations and then find the desired type of fluctuation. Whether it is intraday opportunities or daily trend opportunities, it is essential to choose the appropriate opportunities based on one's personality and preferences. More importantly, one must determine when and where these opportunities will appear, in what form they will present themselves, and what the necessary and sufficient conditions for these opportunities are, in order to truly understand where the opportunities are.
III. Capturing Opportunities. After identifying where opportunities lie, the next step is to find trading strategies to capture these opportunities. The situations that arise when opportunities are generated are complex and diverse, and trading strategies must also be flexible in their application. The entry points for positions in response to opportunities should be clear and visible.
IV. Profit-taking, Adding to Positions, and Reducing Positions. When profits are made, one should boldly hold on to the position under the premise of following through with stop losses. If a similar entry signal appears again, it is the time to add to the position. However, for situations that are not expected to be sustainable, one should reduce the position in a timely manner when the expected outcome is reached, or even close the position entirely.
V. Exiting and Re-entering the Market. Exiting a trade can be done naturally as the stop loss is triggered, or it can be done when the trend reverses, or when it is judged that the trend is about to reverse, allowing for a timely exit. If, after exiting, the market does not experience the so-called reversal and instead continues to move along the main trend, one must look for entry points again and re-enter the market to participate.
Trading is like a cycle, and it is important to smoothly connect the various nodes. If one link is not done well, the trade will have problems. It can be seen that trading is a very orderly systematic project. Although it may seem complex, successful traders have become accustomed to operating it, and it is nothing more than an upgraded form of "simplicity".
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