Because each trader's ideological experience and operational level are different, I divide the cognition of loss into five steps. Everyone can sit in the right position, see their current position, realize and find ways and means to improve themselves.
The first level: refuse to face the loss
There are people in life who always turn a blind eye to their mistakes and always find such and such reasons to rationalize their mistakes after making them. In fact, it doesn't matter whether the reasons they are looking for are reasonable or not. What is important is that the so-called reason is found through "selective filtering" on the premise of "no mistakes". I didn't objectively analyze all the reasons, but finally came to the conclusion whether I made a mistake. People are like this: always believe what you want to believe. The problem is that such people will be convinced that they are right after repeated psychological hints.
What kind of people are there in life, what kind of investors will there be in the market. Maybe everyone has self-esteem. It seems that every investor's growth will go through such a stage. Similarly, they can't objectively analyze the reasons in the market. In fact, they don't use reasons to comprehensively analyze the results, but look for reasons on the basis of fixed and expected results. Simply put, they don't do more because they see more, but they look for reasons to see more because they do more. In this way, investors are constantly hypnotized by the hints in their hearts, and slowly let their beliefs go further and further with the objective reality of the market. If the final market trend is really consistent with the results they hope, it will not do them any good. This will swell their self-esteem and make it harder for them to face their losses next time. The motivation to compete with the market will be swept away by the awesome market sooner or later. Yes, it's only a matter of time.
The second level: try to avoid losses.
Such people should be regarded as "perfectionists" in life, and they don't allow themselves to make any mistakes at all. If they really make any mistakes, they will fall into repeated remorse. Maybe their goal is to try not to make mistakes in the future.
This kind of person in the market is much more advanced than the first kind. They understand that the rule of survival in the market is to keep the flexibility of trading by being afraid of the market. They understand that the market is always right, and it is foolish to "theory" with the market. But they still haven't jumped out of the strange circle of "right and wrong are completely related to gains and losses". They are too hard on themselves and leave everything they can't control to themselves. If the first person is competing with the market, then the second person is competing with himself. They think the loss is shameful and should be avoided, or they should take full responsibility for the loss. Such investors may fall into the pain of self-blame and eventually become victims of the "learning effect".
The third level: admit the rationality of the loss
If perfectionists in life are those who value avoiding mistakes more than gaining glory, then they are usually timid. If you do nothing, you won't do anything wrong, but you won't do anything right.
In the market, if you can admit the rationality of the loss and accept the loss-making transaction, it may happen. Then your trading behavior will not be timid, but you can be handy. Otherwise, the procrastination style of being afraid of wolves before and tigers after will only make us wait for the real wolves and tigers at last. But in any case, investors at this time still hope to avoid losses to the greatest extent. It's just that they regard profit as more important than avoiding losses.
The fourth level: realize that profit and loss are the same.
At this time, investors have realized that profit and loss are beyond our control. We can only look for the so-called probability advantage from the macro perspective, and the gain and loss from the micro perspective can only be determined by "God's will". At this time, investors have found that no matter whether we make money or lose money, we are constantly doing the same thing. When we avoid losses, we also avoid profits. If our trading skills have positive expected returns, it is not worth avoiding losses. Assuming that the trend tracking system is adopted, the correct rate must be lower than 50%. It seems not difficult to avoid losses at this time, but the problem is that it is not cost-effective in terms of odds. Perhaps investors at this time have begun to think about the nature of trading? What does human wisdom mean in front of the market?
The fifth realm: gains and losses follow fate, and the heart does not increase or decrease.
When investors have understood that there is nothing we can do about the market except looking for the macro probability advantage. They understand that profitable transactions come from our usual losses. Let's avoid loss is to avoid profit! If investors have been able to "love your losses" at this time, it may seem exaggerated. But at the very least, you should be able to "gain and loss, and your heart will not increase or decrease." Do you understand what this means? This has reached the highest level of trading I know: put down the transaction and jump out of the market. This is a sign of spiritual maturity, and it takes a long time to slowly hone. For the result of the transaction, investors have changed from "dependence" to "letting nature take its course". For trading beliefs, investors have changed from "confrontation and struggle" with the market to "tolerance and integration". This is the highest realm of harmony between man and nature in Taoist culture!
The secret of futures success lies in "contentment"
After talking about losses, let me talk about profits. Originally, in this article, I only intended to explain my views on losses, but I can't help talking about profits, so I will simply say a few words: many people want to make big money in a transaction, but it often backfires, and the original profits will turn into losses. Here's a suggestion for some small retail investors: If you operate an account with a principal of 200,000 yuan, you'd better bet that a single product does not exceed 50% of the principal position in the transaction. At the same time, no matter how many positions you have in a single product, you should immediately close your position and plan the next admission opportunity. If the profit of each single product reaches 6.5438+0.8 million yuan (200,000 yuan), you will stop making profits. We small retail investors must exchange time for the growth ability of our small funds without big funds. Those words of "letting profits run" are not suitable for small retail investors at all, so don't be misled, so remember to take profits early next time you make profits, because in futures trading, contentment can always make you happy. Cheerful and calm, life dances lightly.