Currency investment is a relatively simple money game when you are not really involved, but it becomes quite complex once you participate. If you want to survive for a long time and continue to make profits, you must fully understand the essence of trading and truly master a set of correct investment concepts and methods that suit yourself.
Investment trading is not about commodities, but about human nature.
What is the essence of investment trading? Why can't most investors still make a stable profit? And why are the investment results of different people using the same trading system so different?
The failure of most investors is not because they lack trading knowledge, but because they do not follow it. A good method will eventually be implemented by the carrier of the method - the person, the trader himself is the most important factor in determining the success or failure of the trade. Investment is actually a process of spiritual sublimation, a contest between oneself and oneself, and a process of continuous self-transcendence and overcoming human character flaws. In many cases, human nature often plays a decisive role in the investment results, and its importance even surpasses the combined force of knowledge and experience.
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For example, the psychology of wanting to win and fearing to lose in trading will ultimately lead to the complete deformation of the trade, failing to hold the positions that should be held, and hesitating to make decisions on the positions that should be entered. All these human weaknesses are the real obstacles affecting our trading success. Every investor who wants to engage in the financial industry must first overcome their own character weaknesses and improve their character in order to make a stable profit in the financial industry for a long time.
The essence of trading: using small losses to test and capture major market trends.
Investors should not always expect to make a profit every time, but to follow the market trend closely according to an excellent trading system, and use continuous small losses to test and capture major market trends. As long as you have the courage and keep repeating the above operations, you will definitely be able to defeat the market and accumulate wealth. This is the essence of trading.Trading itself is a continuous process of trial and error, exchanging smaller losses for larger profits. Currency trading is a way of strictly controlling the proportion of losses, closely following market trends, and using continuous small losses to test and capture major market movements in operational management.
Looking back at past transactions, whether the majority of your losses were caused by cycle confusion, not operating according to the trading system, or placing orders too early in the large cycle? In fact, as long as you fix the cycle and operate completely according to the trading system, you can reduce trading losses to a certain extent.
The key point of the trading system design is "simplicity and clarity".
For many novice traders, complex trading systems are simply impractical. In the eyes of experts, even a simple MACD indicator can be profitable. As long as you follow the MACD operation and strictly control the profit and loss ratio in the transaction, achieving a profit and loss ratio of 3:1 or greater, even a system with a correct rate of less than 50% is not so difficult to make money.
But the problem is that even if many people know this secret, they still can't make money, because of human nature. Human nature makes people always feel fear when there is a loss, and due to fear, they dare not follow the system signals for operation, and even start to doubt the trading system and stop trading. In fact, for a trading system that has been verified as successful, the most correct approach is to give up all kinds of messy thoughts, trade according to the system signals, and it is possible to achieve the maximum profit.
The key to making a lot of money: long-term trading, adding positions with the trend.
True investment experts only choose opportunities with low risk and high returns in trading. Moreover, they trade very few times, often only a dozen times a year. To succeed in investment, the first thing is to preserve your own strength, and on this basis, to earn profits for development. This requires us to do two things in investment:
First, reduce the number of transactions, frequent trading is the biggest reason for novices to lose money.
Second, use reasonable capital management to reduce losses and pursue the maximum return of funds. Long-term trading can effectively reduce the number of transactions, and adding positions with the trend can ensure small losses and large profits.
Some people always ignore the huge role of capital management in futures investment. Wall Street short-term expert Bill Williams said: Before you learn to use reasonable capital management, you are just an insignificant little speculator. Only when you have thoroughly mastered the skills of capital management will you become a true big winner. Long-term trading and adding positions with the trend are the keys to investment profits.
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