If and only if you regard trading as a serious mental work, you can succeed. Emotional trading is fatal. In order to ensure success, defensive fund management must be implemented. A good trader must look after his money, just as a professional diver looks after his oxygen supply.
To be a good trader, you should also keep your eyes open, recognize the real trend and reversal, and don't waste precious time and energy on fantasy, regret and wishful thinking.
You need to be self-disciplined and always close the deal at the right price. There are thousands of stocks and dozens of futures contracts on the market. If you miss a deal because of a limit order, there are countless other opportunities in the market. Don't pay more! I almost always use limit orders, and only use market orders when I stop losses. When a transaction is going to lose money, you have no time to haggle over it. When the stop loss line is touched, switch to the market order. Open the warehouse slowly and clear the warehouse quickly.
In order to reduce slippage, try to trade in markets with good liquidity and high turnover. Avoid trading quiet stocks, because the sliding point there is usually high. When the market is calm, use a limit order to trade at a specified price. Record the price of the order. If necessary, ask the broker to go to the venue to get you a better price.
The real problem of losers is not the amount of money, but excessive trading and poor fund management. No matter how much money he has, if the risk he takes is too great, no matter how perfect the trading system is, a period of wrong trading will always make him lose money.
Traders must control their losses if they want to survive and grow in the market. To do this, you can use only a small part of the principal in each transaction and learn from every small loss.
You must be aware of your shortcomings and try to change them. Keep a transaction log-record the reasons for each opening and closing, and look for your repeated patterns of success and failure. You should be soberly aware of your self-destructive tendency. Don't blame your loss on bad luck or others, you should be responsible for the final result. Start keeping a diary-record all your transactions, why you buy and sell, and look for repeated patterns of success and failure. Those who can't learn from history are doomed to repeat the same mistakes.
Traders learn some knowledge, make some money inexplicably, and then start to be emotionally unstable, leading to self-destruction. Most traders will eventually spit their profits back into the market. The market is full of stories of getting rich overnight and then being quickly turned back to its original shape. Successful traders, they have a prominent symbol, that is, they can make their own funds grow steadily instead of ups and downs.
You should learn to trade according to the rules of fund management as objectively as possible. Make a list and record every transaction, including commission and slippage. Record your "before and after purchase" form. At the beginning of your trading career, you should spend enough time analyzing yourself, at least as long as analyzing the market.
Profitability makes traders feel high and full of power. They tried to repeat this feeling, so they rushed into the market just to retreat from the loss of profits.
Do you keep your own transaction records? An obvious feature of stock market gamblers is that they never make qualified trading records. Good businessmen will keep their trading records completely. Your record must include the price and date of each transaction, slip point, commission, stop loss point, all adjustments to the stop loss point, reasons for buying, target price, maximum floating profit, maximum floating loss after reaching the stop loss point, and any data that needs to be recorded-for future reference.
As a trader, what you should do is to reduce the trading scale when you are completely crushed by the market. Remember, when you are still groping or feeling nervous, you must reduce the scale of the transaction.
Most individual traders waste this huge advantage because they trade too frequently. Individuals who want to defeat institutional traders must cultivate their patience and eliminate unnecessary greed. Remember, your goal is to profit from trading, not day trading.
Before trading, you need to prepare your own trading plan carefully to avoid emotional trading with the rapid change of price. It is best to write your own plan on paper, so that you can know more exactly under what conditions you should start trading or quit trading. Don't make a trading plan in the process of trading, otherwise it will be easily assimilated by group emotions.
Only by persisting in independent thinking and operation for a long time can you become a successful trader. No matter what kind of trading system, the most vulnerable part is the trader himself. Unplanned operations or operations that violate the original plan will eventually lead to the loss failure of the transaction. Trading plans must be drawn up by rational individuals, and it is likely that groups will formulate impulsive and emotional trading strategies.
In the process of trading, we must always pay attention to ourselves and pay attention to the changes in our mental state. Write down your own admission and exit conditions, including fund management rules. As long as there is a position in hand, we can't modify the plan.
The daily opening price often reflects the values of amateurs. A layman reads the morning paper every day to see what happened the day before. He may also ask his wife whether to buy or sell, and then place an order before driving to work. Amateurs are always very active at the beginning of each day and week.
The daily or weekly closing price often reflects the behavior of professional traders. They stare at market transactions all day, respond to market changes, and tend to dominate the last 1 hour transactions. Many of them cashed in profits during that time to avoid holding positions overnight.
When drawing support lines and resistance lines, let them pass through the edge of the transaction-intensive area, preferably the edge of the main body of many columnar lines, not the price limit. Transaction-intensive areas are places where a large number of traders change their minds, and the price limit is only a reflection of the panic of those traders with the most vulnerable psychology.
Our memory of the trend changes before the market will prompt us to buy and sell stocks at specific prices, and it is the public's buying and selling behavior at these prices that has produced resistance and support. Resistance level and support level depend on people's memory.
If traders remember the price of the latest rebound, they are likely to buy stocks again when the price approaches this point again. Similarly, if they remember that the price peaked at a certain price, they may sell it when the stock price is close to this price.
The longer the resistance zone or support zone lasts-the longer it lasts or the more times it is impacted-the stronger the resistance or support.
Successful trading requires making your own plan and carrying it out firmly. When pressure comes, people often trade or imitate others at will, which can easily lead to transaction failure. What I want to say is that you must keep a distance from the outside world when making and executing your own trading plan. When a transaction is still in progress, you can't tell others about your trading plan. You need to deal with your own transactions alone, learn what you can do, make decisions, record plans and execute them silently. After the transaction, you can discuss the past transactions with people you trust, but you must keep silent about the current transactions.
It's easy to discuss discipline after the close, but after the opening, you may have forgotten discipline. To succeed, we must make a good trading plan and carry it out firmly. Transaction record is the key to the success or failure of a transaction. If you keep a good record of the transaction, you may succeed. If the transaction records are not kept, the chances of success are slim.