The renowned financial speculator George Soros once said: "The financial world is turbulent, chaotic, and lacks order; only by discerning reason can one be invincible." Being in the financial market, one must understand the trading patterns and grasp the psychology of trading to be a consistent winner. However, there are few traders as successful as Soros, yet many aspire to be like him.
"Qihui-Soros" is a follower of Soros who has achieved a good result of weekly profit of $88,000 (approximately 618,000 RMB). So, how was he able to make a lot of profit in a short time? In this issue, the editor will listen to the story of "Qihui-Soros" with you.
I started doing stocks in 2013, and after two years, I first came into contact with trading in 2015. After the stock market bull market ended in 2015, I felt that there were certain risks in doing stocks, so I wanted to change the way of investment. Coincidentally, I saw my friends doing trading, so I invested about 2000 US dollars into the foreign exchange market. Soon after, I encountered losses, and I began to study continuously, read books, and browse forums, during which I absorbed a large amount of trading knowledge.
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Although when I first started, I only had 2000 US dollars, my current trading funds have reached 100,000 US dollars. I have gone through a lot during this period. In fact, in the early stage, when losses were greater than profits, I even doubted whether my personality was suitable for this. At that time, it seemed that there were two people fighting in my heart, one was an angel and the other was a devil. One side told you that you could do it, and the other side said forget it, this market is not suitable for you. All kinds of psychological conflicts, the whole person was in contradiction.
Lack of understanding of basic trading knowledge and pure technical analysis were the main reasons for my losses in those years. In fact, if the basic knowledge is not solid, there will be a big problem, and an accident at any time will make me lose and close the position. Fortunately, I did not give up, repeatedly watched the market, used a simulated account for practice, and finally got through that uncoordinated period.Follow the Market, Not Against It
I refer to both technical and fundamental analysis in my trading, using technical indicators as a support and the fundamental analysis as the overarching direction. I mainly trade GBPUSD and XAUUSD, and I formulate a trading strategy at least once a day to a maximum of once a week, finding suitable entry points to follow the major trend. Even if there are any mistakes, the problem is not too significant, as there is room for correction. However, usually, if I can find a very suitable entry point within a week, I will enter the market heavily, trying to follow the trend, and if something unexpected happens, I will stop the loss in time.
Although I am cautious, I have still had my accounts blown up. It is usually because I placed too large an order, did not execute the strategy, and failed to integrate knowledge and action. I remember that my highest loss was $50,000, and my biggest profit in one day was $80,000.
As the saying goes, "Failure is the mother of success." I have the deepest experience with past trading failures. When you fail, you need to summarize the experience so that you can find ways to avoid similar situations in the future, such as false or true breakouts. If you rely solely on technical analysis and depend too much on it, many short-term trades will face losses, like false breakouts.
In addition, trading based on feelings is the most risky. For example, guessing the top or bottom based on the feeling that the price has risen or fallen too much is particularly risky. But if you act after the direction is clear, the risk will be greatly reduced. We should always approach trading with the mindset of being in love, not with "I think," but with "it thinks" how it should be. Because the market is always right, and we cannot go against it.
Trading strategies are more reliable than feelings.
At the beginning of my trading, I was always watching the market and was too confident, so I did not set stop-loss or take-profit orders. At that time, my trading followed my feelings, and when I felt "it was about time," I would take action. This is actually very dangerous because thoughts are intangible and can mislead oneself. Now, when I trade, I generally set a stop-loss to avoid excessive losses that are impossible to make up for.
Whether to set a stop-loss or take-profit should be considered when making a strategy. It is the greatest responsibility to oneself to determine a trading tolerance range in advance, set a stop-loss, and trade with expectations. The work of trading is to review, analyze the fundamental and technical aspects, make a good trading strategy, wait patiently, follow your own trading strategy, and focus on choosing the right points to strike after seeing the big direction.
As Soros said, "Successful trading means you need to be very patient and take the initiative to act when you know it's time to do so. In the capital market, the return rate is just a symbol, and what constitutes this symbol is not only wisdom and strength but, more importantly, courage and confidence."Maintain Your Own Thinking Logic and Trading Strategy
An excellent trader is not influenced by external factors and can always maintain their own viewpoints and trading strategies, possessing their own thinking logic. In trading, it is important to communicate with friends, learn from others' perspectives, and ultimately choose the viewpoints that suit oneself for application. Do not delude yourself into thinking you are the same as the person teaching you, as everyone has a different personality. First, learn and explore on your own, discover problems, and then seek guidance from others to receive valuable advice. By consistently following the correct path of investment, the road will become wider and wider.
Traders are inevitably affected by emotions, which can lead to unpleasant communication with family members. Psychology suggests that when you encounter something bad and react poorly, even worse things will follow. Therefore, it is essential to avoid letting emotions interfere with yourself. When feeling emotionally unstable, stop trading first, vent your frustrations through exercise, and then take a shower to start afresh. Read books, review trades, identify mistakes, and take notes to prevent repeating them in the future.
I've heard that many experts place few orders in a year, and often a single order can sustain them for a year. Therefore, to better balance life and trading, I am now considering trying medium to long-term investments. Recently, I have been reading "The Art of Valuation" and "Cycles," hoping to learn the logic behind trading and its true value.
Over the years of trading, I have changed a lot. Last year, I started running to exercise my willpower and have persisted in reading for half an hour every day, taking notes, which has made my mind clearer. Although trading is lonely, as long as you stick to doing one thing, you will feel that it is also a happy thing. Persistence is meaningful in itself, not just when there is hope.
Risk comes first, and making money comes second in the market.
There are many products in the foreign exchange market, but I still suggest focusing on familiar ones. Instead of scattering your energy by thinking about various things, it is better to concentrate on one or two. The trading market does not have the concept of bull or bear markets; you can trade on the right side or the left side. Often, dealing with your preferred products feels more comfortable. A friend once told me: no matter what you do, you must choose what you like. When you don't like it, everything you do is wrong. If this matter brings you pain, please leave the market and give yourself a relief.When choosing a broker, it is important that they are stable, reliable, and easy to communicate with, but the key to trading is still oneself. The most important thing about a broker is their ability to provide stable withdrawals, small spreads, and timely deposits, as this ultimately relates to personal financial security. If a trading strategy has been determined, being able to deposit funds in time when facing a small accident and the risk of a margin call, I feel, is more important than withdrawing funds.
Regarding trading strategies, they should be determined based on each person's personality. Different personalities have different tolerance levels, and views on short-term or medium-term trading will also differ. If a high probability is identified, one may place a large order; if the probability is not very clear, one may not place an order or place a small order to try. The focus should still be on personal characteristics and having a set of one's own plans.
Newcomers can also start by reading some professional books to understand the basic knowledge. Every company and every financial product has its own value, and we should view it from an investment perspective rather than speculation. The risks of speculation are often high, and the premise of trading should be to prioritize risk prevention rather than making money.
Trading Strategy Selection Under the Pandemic
The impact of the pandemic on the global economy is still expanding. In the current financial market, we cannot predict its top or bottom, and can only judge the general direction by relying on major events. Charlie Munger once said, "People calculate too much and think too little, which is why they keep losing." In summary, read more, think more, and find more opportunities.
Make daily and weekly trading plans, follow the trading strategy, and integrate knowledge and action. Technical aspects are more flexible and can be determined based on the situation, while the fundamental aspects mainly depend on personal understanding, and more information can be consulted to broaden one's thinking. For example, on July 9th of this year, the US dollar index experienced a "death cross," which has occurred 9 times in history, and 8 of those times were followed by a significant downtrend. Therefore, it is entirely possible to predict a downtrend in the US dollar index and an uptrend in non-US currencies at this time, and then decide whether there will be a rebound or reversal based on the later trend.
For those who do short-term or intraday trading, it is necessary to prepare trading strategies in advance, choose the right entry points, and set stop-loss and take-profit points. As for those who do medium to long-term trading, make a weekly trading strategy, wait for good entry points, and leave room for replenishment. If there is no downturn and there is an opportunity to replenish, at least you are profitable, and your mentality will never be too bad.
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