My understanding of trading: be patient with short positions, patient with positions

Trading requires patience and is indispensable. My patience in trading is summarized as follows:

1. Patiently short positions, waiting for trends and opportunities

Wait patiently for a truly perfect trend in the market, and don't make predictive interventions; "timing is everything", buy at the right time, and sell at the right time. Trading is not something to be done every day. Those who think that trading should be done at any time ignore one condition, that is, trading needs a reason, and it is an objective and appropriate reason.

If you can avoid the turbulent waves of the "big wash", you can take home huge profits. Only when the market exhibits strong trend characteristics, or your analysis shows that the market is brewing and forming a trend, can you let it go.

The above are all the theories of the predecessors. My understanding is that there are two reasons for admission:

1. A very definite trend (a trend that can be understood) that can be judged by one's own analysis method;　　

2. A "positive" entry timing signal that has been fully tested and verified.　　

Some people say that there is some truth in the saying "it is the ancestor who knows how to be short". However, I personally feel that short positions do not have such a high status.

2. Hold positions patiently and wait for the end of the trend

Trends are sustainable. My "ideas" never made me a lot of money, it was always my "holding on" that made me a lot of money, get it? It's me who insists on not moving! What you do in a bull market is to buy and hold until you believe the bull market is coming to an end. It is rare to be able to judge correctly and hold on to it at the same time, and I find it one of the hardest things to learn. The position of "following the trend" may have great profits, so don't "abandon ship" easily.

"Cut the loss and let the profit run" The purpose of patient position holding is to maximize profits, and its key is how to close the position. Solving how to close positions can solve the problem of patient holding positions. After more than a year of repeated exploration, a method has been found. Just don't want to buy and sell to the highest and lowest point, use the narrow time period, and enter the market on the right side. Although a part of the profit is lost, the position can be held until the end of the trend. The consistency of closing positions can also be achieved. If the big-cycle support and pressure point is effective, set it as the exit target and sell at the best point.

3. Accumulate patiently, compound interest is king

There is a story about a chessboard and wheat. Sita invented chess and made the king very happy. The king promised him a reward and put the wheat on the chessboard in multiples. how many?

For example, if you build a warehouse to store the wheat, the warehouse is 4 meters high and 10 meters wide, then the length of the warehouse is twice the distance from the earth to the sun. And it would take the whole world two thousand years to produce so much wheat. This story shows that even a small fund, as long as it can make a stable profit, can eventually roll into astronomical figures. Therefore, small funds need not be too impatient. The opportunity of a little heavy warehouse, survive in the market, accumulate patiently, and one day there will be plenty of wheat in the warehouse. The real transaction requires safety, making as few big mistakes as possible, and being patient, and it is formed by the continuous accumulation of wealth year after year.

4. Study patiently, only after thick accumulation can thin hair

Personally, I think there are some key points for learning:

1. The trend of a single cycle.

2. Conversion of time period.　

3. Stop loss and position management.　

4. A comprehensive knowledge system, that is, trading philosophy.　

5. Simplify into enforceable rules.

1 and 2 are analysis methods, buying, selling, etc., are all traded according to the rules summarized by the analysis method.

The third is the two aspects that affect the size of the loss. As long as the stop loss and position management are reasonable, the loss is controllable and the loss is not terrible at all.

The fourth is the logic of the transaction. There is a whole set of logic behind short positions, plans, opening positions, stop losses, positions, increase positions, holding positions, closing positions, etc. The transaction process is also interlocking. Without this logic, transactions would be fragmented and irregular.

5. After the rules are established, subjective judgments can be reduced, and it is enough to execute the rules of the transaction. If it does not conform to the rules, do not do it. The complete rules are the trading system.

It is really difficult to learn this thing. The knowledge points of trading are like the planks of a wooden barrel. If there is a shortage of any piece, you cannot make a steady profit. Every time you learn a knowledge point, you still fail. After repeated failures, you lose confidence in the transaction. And now we are in an era of knowledge explosion, which has both advantages and disadvantages. The disadvantage is that there is too much and too complicated knowledge, which leads to too much incomprehensible knowledge being put into the mind in advance, resulting in too much misleading. If there is no step-by-step guidance from a master, if you choose excellent books and articles, you will basically get lost in the ocean of knowledge.

It is not until we have a framework of knowledge that we can know what is useful and what is useless. What if not? So how many people can establish a framework for trading knowledge?

It is bitter to write here, what a painful realization! Moreover, many excellent books and articles need to be read again after a period of time before they can be understood slowly. It is the so-called "knowing the new by reviewing the past"!