At the beginning of trading, traders usually suffer losses soon after entering the market, even a series of major losses. I analyzed my own trading records and found that one or several of them caused great loss of principal, and then the capital curve would drop precipitously.
Therefore, traders must prevent large losses and stop losses decisively. Stop loss is the first practical course that traders contact and learn, which can protect traders' principal and support by going up one flight of stairs.
Second, follow the trend.
After learning to stop loss, after a period of operation, traders suddenly found that their principal was still reduced as usual, but the rate of reduction was much slower, that is, stop loss, and the more they stopped, the more they lost. After analyzing my own trading records, I found that the direction of many transactions was problematic and inconsistent with the general direction of the market. Therefore, many transactions are closed with stop loss, and the capital curve at this time shows a continuous step-by-step decline.
Third, light warehouse clearance
After the trader can stop the loss and take advantage of the trend, the trading performance has improved, and gradually win more and lose less. However, at this time, the desire to get rich quickly has expanded, the courage has increased, and the status has become heavier and heavier. Finally, one day, although traders set a stop loss, the market did not give them the opportunity to execute it, so the funds withdrew sharply and even suffered heavy losses. At this point, the capital curve shows an overall upward trend, but occasionally there will be a cliff-like decline again.
It's like a healthy person in a car accident, and the accident in the transaction always comes unexpectedly. Traders should be aware of the huge negative role of contingency in trading career and understand that they expect to get rich once, but the final result is often sudden death. To prevent this kind of accident, you can't hold a heavy position, otherwise there will be no room for manoeuvre in special circumstances. Traders should trade lightly and don't rush for success.
Fourth, choose the right time.
I learned to cut off the losses and let the profits run, but under the light warehouse operation, the speed of making money is slow after all, so traders can't wait to keep trading, and they can't wait to keep fluctuating. As soon as they saw the so-called "opportunity", they plunged into it. However, after a period of operation, it is found that although there is almost no big retreat on the capital curve, the capital curve fluctuates almost up and down, and there is no obvious growth. After analyzing the trading records, I found that I was constantly operating during the oscillation period of the market. Because there is no trend, or there is no market, even if I do more and better, I can't make much, but my transaction cost has risen a lot.
So there is no need to stay in the market every day. Sometimes it is better to have a rest. At this time, traders understand that relaxation is good, and they only need to seize those limited markets a year, so they don't have to trade from time to time.
V. System shutdown
If the first four levels have passed, then the main obstacles that can make traders die quickly, slowly and suddenly have been made clear, that is, the losses they should eat have been eaten and the lessons they should learn have been learned. At this point, a relatively perfect trading concept has taken shape. Even so, traders will make the mistakes listed above from time to time. For example, sometimes the stop loss is not firm, or the stop loss amount is relaxed again and again. Sometimes it's necessary to copy the bottom when the light flashes, sometimes it's heavy to indulge yourself, and sometimes it's urgent to turn over and over-trade. I always make mistakes unconsciously, change them and make them again, as if I could never change them.
Therefore, traders must transform the trading concept into specific operating rules and make it a discipline that can be observed. After hard attempts, traders finally built their own trading system on this basis, and realized that a perfect trading system must be a five-in-one system of initial funds, admission, stop loss, take profit and increase and decrease positions. It is impossible to solve one of them first and then the others. All joints must be opened at the same time.
Sixth, self-confidence
The trading system was successfully built and the historical data test was ideal. Traders think they can finally make money easily. However, after strictly following the signal operation, they suffered five or six losses in a row, and at the extreme, they lost nearly 20 times. At this time, traders began to doubt their own system and decided that the system must have important defects that they did not know.
People with perfectionism tendency and diligent learning spirit often fall into systematic tinkering. Unfortunately, this problem cannot be solved by hard work. It may take a long time for traders to understand that even if they make mistakes in losses, it is only a poor job, because the trading system is not suitable for the market at that time, and one of the functions of fund management is to survive in this market.
Seven, repeated customs clearance
After tempering, traders understand that losses are an inevitable part of trading, that profitable trading is not necessarily a good trading, and that losing money trading is not necessarily a bad trading. Rereading the classic works, I found that the mystery of the original transaction has been discussed by predecessors, but unfortunately it is difficult to understand the true meaning without personal experience. At this stage, traders have been able to make stable profits, but there is always a question in their hearts: Is there any other shortcut to success? In other words, although traders have their own trading systems, will others' trading systems be better? You can't give up the whole forest to keep a tree, so traders will devote themselves to the design and testing of other systems, and the results are not very clear.
In fact, traders will form their own trading ideas only after they have experienced many setbacks and learned many lessons of failure, and the system is to concretize this feasible idea. From this perspective, all trading systems have the same characteristics and remain unchanged. Therefore, traders should concentrate on operating according to the existing system signals and constantly repeat the profit model, so that funds can grow steadily.
Eight, at home.
Through the above exercises, traders' methods to prevent every mistake have been standardized, and the rules can be strictly enforced every time they trade. At this time, the capital curve is gradually rising, the slope is appropriate, and there is no big decline. Traders themselves will feel that trading is not so tiring. Although they are still doing marketing every day, the number of orders is getting smaller and smaller, but the success rate is getting higher and higher. At this time, traders believe in their trading system and understand that although the system has some shortcomings, it is inevitable to make money if you stick to it. At this time, the trader's determination is still insufficient, and he is easily disturbed by external information, such as the advice of the master he admired, the reports on the main force of the banker, and the specious fundamental information. And traders will make mistakes and suffer losses because of credulity.
At this stage, the most important thing for traders is to cultivate their concentration. With the continuous improvement of mentality and rich experience, traders have gradually reached the level of listening, and can easily distinguish the authenticity of information without interference from external information. At this time, when traders review their trading records, they will find that although they do not make many orders a year, they make a lot of money. In the long run, they will gradually reach the realm of financial freedom and relaxed mentality.