There are two situations: one is that they are really lucky and happen to encounter a bull market in stocks, and then they make a lot of money by going long with a full position. However, this is actually a tragedy, because they have not gone through a complete bull and bear market cycle, and the money-making effect makes them one-sidedly think that making money is easy, and they become blindly optimistic. Gamblers will not leave even if they make money, but their luck will run out. Yes, once the bull market ends, they will still lose all their money during the long bear market years.

Another situation is that they encountered Waterloo not long after trading, especially in the margin market, the direct result of leveraged operations is liquidation.

After experiencing a complete bull and bear market baptism, both situations ended up with a lot of losses and tragic losses.

But in fact, this type of traders only account for less than 10% of the trading population. Why are there so few? Because to put it bluntly, as long as the IQ is normal, the experience after suffering a huge loss will be very profound. You will soon realize your own shortcomings and start to become cautious about the market.

This type of people began to differentiate. Some people went from greed to the other extreme - fear. They felt that this market was ruthless and they were not suitable for trading. They were not as stable as working honestly, so Simply give up on the market and never step into it again. In fact, this way of ending can be regarded as the end of life for such people who have no trading talent. The most important thing for people is to understand their own abilities.

Other people were unwilling and unconvinced. They felt that something must have gone wrong and that trading was not that simple, so they began to analyze the reasons for failure and began to prepare to enter the learning stage, which is the primary school student stage.

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2. Primary school student stage: thirsty for knowledge

After realizing the risks of the market and the insufficient knowledge reserve, I graduated from kindergarten. Entered the primary school stage, which is the stage of hard study. Various technical indicators on the market and books on trading concepts are prepared for them. They are thirsty for knowledge, buy various technical books, learn the trading techniques of various celebrities, watch videos, listen to lectures, apprentice with teachers everywhere, and even blindly believe in various so-called "teachers" who recommend stocks over the phone, hoping for guidance.

Then various so-called trading concepts tell them that they must understand technical indicators and stop losses, so there are all kinds of Gann theory, wave theory, KDJ, MACD, Bollinger Bands, moving average system, K line A lot of morphological theories were constantly taught to them, and they also learned how to stop losses. Although it was still distressing at first, they gradually got used to it after stopping losses ten or eight times.

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(This book is introduced in the previous article).

Slowly they begin to become complacent. They naively think that trading is just a bunch of mathematical indicator formulas. They show off everywhere, talk endlessly, and talk logically, fooling kindergarten-level traders and those who don’t do trading. No problem for newbies at all.

But after one year, they found that their accounts were still not profitable. Constant stop losses made their accounts thinner and thinner. They felt that they had fallen into a black hole and were doing useless work day after day. , even if you can occasionally make a few profits, the profits will be slowly wiped out by the next several stop losses.

Traders at this level are the majority, accounting for more than 80%. As time goes by, they become "veterans", but not "masters". The characteristic of veterans is that they focus on trading indicators. I can talk about ideas and ideas for hours, but I don’t make any money trading. Most of the so-called "teachers" or "analysts" who guide you are at this level.

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(This book is introduced in the previous article).

And many people at this elementary school level cannot even graduate in more than ten years. I know a "veteran" who claims to have been doing futures for 18 years. His WeChat official account is full of articles written by himself, which is very interesting. Level, the talk is clear and logical, and the chicken soup is also very heart-warming, but when I chatted with him, he actually lost 6 million in 2018 and has not yet achieved stable profits. He comforted himself by saying that "trader is a late bloomer industry" and he has not given up yet. . I'm speechless. . . . . .

When traders at this level have been trading in confusion for several years, they begin to doubt the various knowledge they have mastered.

(1) Trading indicators will be contradictory. MACD is golden cross, but KDJ is dead cross, and the moving average is golden cross again. How to trade, which one is right?

The future market situation is nothing more than three situations: either rising, falling, or oscillating. Judging any one of them has a winning rate of 33%, but every time a technical indicator is superimposed, the number of permutations and combinations is doubled. There are 2 types of judgments by MACD, 4 with KDJ, and 8 with moving average. . . . . .

(2) The trading indicators will be blunted. In the oscillating trend for several consecutive months, it will be a pleasure to eliminate the golden cross and dead cross of KDJ, sell high and buy low, and then the market will change from shock to shock. The trend enters an upward trend, and KDJ crosses at high levels. As a result, you still go short based on past experience. As a result, the market continues to rise for a month. KDJ crosses at high levels repeatedly, which is passivated for a month. Your loss is much greater than that of a shock. The meager profits made by the trend ended up "after decades of hard work, I suddenly returned to before liberation."

(3) Trading indicators will lag. For relatively small band increases or decreases, trading indicators will often lag, that is, after the rising market is over, KDJ will appear golden cross, waiting for you to enter the market. After going long, the market begins to fall. You are hung on the top of a mountain, suffering from the cold at a high place. Then you stand guard waiting for the market to rise back. You torture yourself every day because you cannot eat well or sleep well.

Some people say that it is not enough to regard technical indicators as reverse indicators? Haha, I'm sorry, if the market is not in a slight upward trend, but is in a sharp upward trend, and you go short against the market, you will die faster. The rapidly rising market will quickly liquidate your position. You You will beat your chest and say: "I have been waiting for such a big bull market for so long, but I went short and my position was blown up!" You want to smash your computer, and you can't forgive yourself for a long time.

This situation is likely to stay with you for many years, or even be impossible to get out of for life, because most people are trapped in this level and lose themselves. This kind of people are also the perpetual motion machines of the financial market, constantly contributing fresh blood to the market. The profits earned by profit makers at the top of the pyramid mainly come from them.

Suddenly one day, you realize that technical indicators and fixed trading rules will only confuse your judgment. You even suspect that the people who write technical indicators are just looking at pictures to tell stories. He picked out situations that fit his theory from the market data and took screenshots to write a book. The inventor of the fixed trading rules also wrote a book after discovering that the rules failed, and then promoted his own theory to deceive consumers and earn money. Generous copyright fees eventually leave the market, which is not uncommon on Wall Street.