In trading, the fear of the uncertain future trend by novices leads to a psychological demand for the certainty of the trend analysis at any time, which is a manifestation of the infantile stage of speculative psychology lacking a sense of security. Some diligent individuals even demand a comprehensive analysis of the market. They analyze before making a trade, and continue to analyze while holding positions until they believe they have found a reason to exit, which they consider as stopping the analysis. Is this a matter where the more diligent one is, the better the effect?
In fact, this is the pursuit of superpowers and also the detour that traders are most likely to fall into at the beginning and middle stages of entering the market. Since newcomers need a reason to satisfy them on the psychological level as the basis for their actions, they feel that there is no reason and dare not act if they cannot meet this basic condition. Because they are in a non-professional stage, when people's demands exceed the scope of human or individual capabilities, they believe it is the result of insufficient effort, and do not consider that such demands are common sense errors that exceed human thinking and capabilities. People do not accommodate the market, and the result can only be taught a lesson by the market.
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In the trading industry, traders' efforts can only advance step by step. Both the pursuit that exceeds the current capabilities too much and the pursuit that is beyond human capabilities are difficult to have positive results. Of course, by luck, one can also have a good life, which sows the seeds of danger for future losses. The most urgent issue that newcomers need to understand in the first few years of entering the market is to clarify the laws of market operation and their own capabilities. What can be done and what cannot be done, not making futile wishful thinking efforts can avoid one-sided embarrassment and take fewer detours.
When analyzing details, the absolute requirement for precision is an immature idea. If you encounter someone who says they can see all the details correctly every time, it is possible that you have encountered a liar. The market trend is formed by the continuous accumulation of spikes, and there are a large number of random phenomena in the details of the trend. Attempting to precisely predict every detail in the context of the market trend is an idea beyond human capabilities. If there really is such a god, the exchange would not be able to continue. No one would dare to come! This requirement for superpowers is actually self-inflicted. Getting into the mess of details and trying to sort out every thread, straightening the curve is just a fairy tale wish. The key to winning in the trading field is to stand high and look far, to find opportunities in the laws that reflect the trend, so as not to be trapped and unable to extricate oneself. Of course, trading is a highly personalized profession, and it also requires leveraging strengths and avoiding weaknesses to play to one's strengths in order to achieve success.Why is it said that the market is in defense, not in prediction, and that constant analysis is not as good as guarding key positions to qualify the market trend?
During the process of holding positions, our actions must be based on a systematic approach and we cannot use our efforts arbitrarily, as it may backfire. The key focus should be on the possibility of the trend continuing. If the trend remains unchanged - hold; if the trend changes - leave. Everyone knows that if it is an uptrend, it must maintain the upward movement of high and low points, and the trend is healthy. Well, I will keep an eye on the recent obvious low point, and as long as it does not break, I will continue to hold my long positions. It's not too late to leave when it breaks the recent obvious low point (the basis for holding positions in a downtrend is the opposite of an uptrend). You can also use moving averages to guard. If you master the use of moving averages, you can get closer to the price movement. See which moving average the price has been supported by, and just guard that moving average. When it breaks this line, it's time to leave.
The commonality of the above two feasible methods is in "guarding", and few newcomers can realize this level at the beginning. Because people think that this is too clumsy, not to mention wasting human intelligence, maybe I can sell the bottom and buy the top to do more accurately. In fact, this idea also violates the limits of human ability. It may be possible occasionally, but you cannot often replicate this wish to straighten the curve.
The seemingly clumsy waiting is precisely the embodiment of following the trend and the principle of going with the trend, which is the characteristic of maturity. It is much more reliable than our constant analysis of the market and the possibility of the future. Because you are judging the trend based on important positions, and once the trend is formed, it will not end immediately! This is in line with the normal law of market development. It is much easier than constantly staring at the market to guess the future and scare yourself! Don't underestimate the importance of being simple and honest. The difference between being smart and being simple and honest is an important criterion for traders to advance to a mature stage and is the way of trading.I'm not discouraging everyone from improving their analytical skills; the accumulation of analytical skills is also necessary. However, the ultimate path should not be to get stuck in this rut! Here, I would like to remind you with the insights of an experienced person, which path is easier to achieve success. Beginners always worry that they are not diligent enough to understand the market trends, while veterans worry that they are too clever and ignore the implementation of trading principles. Skills are not achieved overnight. When people know the profitable methods and rules, they also need to deliberately train to apply these rules skillfully.
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