In the dead of night when all is quiet, one may experience a moment of clarity. Trading is like a labyrinth with many paths. If you don't view the maze from a higher perspective but enter it directly for some kind of benefit, you might find that you can make money. However, the longer you engage in it, the more you will realize that the market is increasingly complex, and you may become irretrievably lost within it.
In the high-risk market of trading, there are only winners and losers, no experts. The market is ever-changing, and the essence of investment philosophy, such as losing small and winning big, trend trading, and risk management, are eternal themes.
Trading, in fact, is a transaction of oneself, a transaction of one's own personality. It is said that personality determines destiny. If a person does not fully understand their strengths, weaknesses, and character traits in life, I believe it is very difficult to do well in trading. Why? Because the technical methods of buying and selling, as well as risk management in trading, can essentially be learned and imitated. But even if you have learned the methods of buying and selling and risk management, once you enter the market, you will find that the trading market is a place with a strong temptation. In reality, the actions you take will be very different from what you have learned, and you will become lost in the maze of trading.
Advertisement
Therefore, to be successful in trading, one must understand and surpass oneself. The cost of understanding oneself in the trading market can be very high; you can only understand yourself by losing money.How to find a way out of the maze?
After countless failures in the market, one must have the confidence to continue learning and thinking about trading. There is a psychologist abroad who mentioned the 10,000-hour rule, which I find very reasonable. He said that in any industry, if you want to reach the world's top level, you need to spend 10,000 hours learning and thinking. For example, in trading, if you average 5 hours a day, it will take many years. Take your time and be patient.
As a speculator, how to understand the market and what kind of trading method to adopt, I think the first step is to set a goal. Once the goal is set, you can control your mentality. After the goal is determined, you need to have a clear thought and method for judging market value, which is the issue of the trading system. This system is to serve the goal. The system is not omnipotent, and there are always times when it does not match the market. Behind the system, there should be trading strategies and risk management, which is the issue of trading techniques. Once these elements are constructed, then step by step, it will become clear.Step One: Aspiration—Long-Term and Medium-Term Perspective
Reflecting on the words from the "Aspiration" chapter by the Ming Dynasty's master of the School of Mind, Wang Yangming, "Without determination, there is nothing that can be accomplished in the world. Even the most skilled craftsmen and artisans all begin with a firm will." To have a clear goal means to set one's aspirations. Short-term? Medium-term? Trend? Volatility? Technical analysis or fundamental analysis? From the endless river, one only takes a ladleful. Setting one's aspirations is the first step to navigate out of the labyrinth of trading.
Jesse Livermore's ultimate realization can be summed up in one sentence: "Money is made by sitting and waiting." I translate this into operational terms as: "Resolutely base your trades on the long-term and medium-term moving averages."
This statement is the supreme and ultimate strategy in the financial market that encompasses all excellent tactics. Apart from this, most others are dross and distractions. Understanding this sentence requires extraordinary wisdom and a vast amount of practical experience. 99% of the failures, throughout their lives, will never comprehend this sentence. Regardless of the K-line cycle you trade, going against the long-term and medium-term moving averages is a path to nowhere.The phrase "Money comes to those who wait" is the cornerstone of the study of financial trading. This single sentence establishes the entire field of financial trading and encapsulates all the methods of making money in finance.
The golden rule of "Money comes to those who wait" is destined to accompany the life of every successful trader. Those who are confused about trading fail to understand this sentence.
Step Two: Waiting - Target Direction
Trading is about waiting, waiting for the medium to long-term moving averages you have chosen. Trading is about persistence, not being discouraged by temporary setbacks, and always adhering to the principles you have chosen. Trading is like a crocodile hunting, quietly waiting, patiently waiting, and obtaining the profits that belong to you. Those who are indecisive may succeed in other industries, but in the ruthless financial market, it is too difficult, even if you are extremely talented.
The popularization of candlestick theory will only accelerate the mutation of the theory itself. It can be foreseen that in the future, on the main varieties, the probability of K-line patterns from 15-minute K to daily K will change rapidly, and the deception of K-lines will greatly increase, especially the most mainstream daily K-line. The market has its own wisdom. In the end, most people will lose money.It can be anticipated that in the future, increasingly mature markets will be dominated by small candlestick charts and large moving averages. The study of candlestick charts itself will be mercilessly trampled by the mutated market. As the primary trend indicator, moving averages will always hold an unrivaled position in the financial market!
No matter how powerful your capital is, you can change the probability of candlestick charts, manipulate the probability of candlestick charts, and even manipulate small moving averages. However, the position of medium and long-term moving averages cannot be challenged by any powerful force, whether intentionally or unintentionally, and must be unconditionally accepted.
No matter which candlestick chart period you work with, only by accompanying the development of medium and long-term moving averages can you achieve the highest level of safety and profit. This is a mathematical philosophy that no one can challenge. I do not want to explain this statement any further. As long as human greed and fear still exist, this statement will never be outdated. The difference in stop-loss is only due to the different candlestick chart periods you choose.
Step Three: Loyalty to Systematic TradingTranslate the following passage into English:
Absolute loyalty to the medium and long-term moving averages you have chosen is the supreme and unparalleled ultimate gorgeous tactic in specific operations. Looking at a long cycle, this tactic is destined to be unsurpassable. It is the embodiment of the great way of trading. Only the paranoid of great success can understand this passage. Quietly wait for your moving average, and hold the inevitable path for the market to start. Trading is understanding the inevitable path of the market, and waiting for the inevitable path of the market.
In my view of stop loss, what I express is that if you can't afford to lose, you absolutely can't win.
In my view of operation, I want to express that if you don't have the supreme determination to be loyal to the medium and long-term moving averages you have chosen, it is difficult to succeed.
Short-term moving averages cannot carry the fluctuations you need. Choosing too small a moving average is as ridiculous as choosing to fall in love with an actor. You can stick to the principle of the medium and long-term moving average in your heart, which is the inevitable path for the market to start, and it is the key to continuously helping you make a large profit in the wave.
Profit requires time, profit requires stability. Profit cannot withstand repeated tossing, and even less can it withstand repeated stop losses. For your own trading rules, you need to guard them like guarding your own life.To gain, one must let go. Discard all the trends that you cannot understand, cannot afford to tinker with, and endure in solitude, waiting for the clear and executable macro perspective that you can understand.
The art of trading itself is imperfect, and perfectionists are doomed to suffer. Trading is a kind of imperfection. The philosophy of "great success seems to be incomplete" is the best description for trading.
The fluctuation between medium and long-term moving averages and market prices is much smaller, easier, and simpler than that of short-term moving averages. The philosophy of giving and taking needs to be slowly and carefully experienced.
Many times, to make a profit, one must be indifferent and open-minded. If you think about perfection, you will inevitably greatly increase the difficulty of operation. The great way is simple, not a joke. The more complex the indicator, the greater the difficulty of operation, and the higher the probability of failure.
Comment