Regarding the profit target, this is a very sensitive topic that many investors are concerned about. It is also the core transaction issue that every trader must first solve. Ambiguity and mistakes on this issue will directly lead to the profit and loss of each transaction . This article also discusses the determination of profit targets as an important prerequisite for fund management.
The divide on the topic is most pronounced between veterans and novices.
Novices usually believe that huge profits can be obtained in the market, whether the profit is 3 times, 10 times or dozens of times the annual income, but most veterans scoff at such ideas, and more realistically believe that the most important thing in the market is survival. The second is the size of the profit. Whether the profit is 70% or 20%. But it is very interesting that this contradiction will form a unity when the novice becomes a veteran (not eliminated before becoming a veteran).
If you started buying the S&P in January 1989, and then completely forgot about investing, after 28 years to May 2017, when you log in again, you will find that the 1 yuan you invested at the beginning has become 16 yuan, with an annualized rate of return of nearly 9.5%. More importantly, you have only looked at the position once in 28 years, and you have gone through countless cycles, and you are not psychologically affected by the loss at all.
Our purpose is not to ask everyone to only look at positions once in their life, but to point out from experiments: the more times you look at positions, the more you will be affected by market fluctuations in your mind and emotions.
Checking it every month, every week, every day will have a very negative impact on your mental rewards, and after 28 years, your mental rewards will be negative even though the real rewards are positive.
This market is full of too many profiteering myths. Especially in 2015 and 2016, the entire investment market was filled with an investment boom. How many times did a certain person earn by operating a certain product through a certain platform? How many people earned the first million in their lives through a certain type of transaction and so on. These "classic cases" have attracted countless investors who are unfamiliar with risks but excited. So saying that it is a myth does not mean that there is no such fact. On the contrary, you may have such an experience after reading this article, but the question is whether such huge profits have been maintained or are they short-lived?
There are indeed very high levels of short-term operators in the market, and most of them are ultra-short-term investment types of intraday trading. After overcoming strong cost pressures, funds grow at an astonishing rate, and can show a certain degree of stability They are also the makers of the profiteering myth, and they have become the targets of countless investors to imitate. In my opinion, they do have some kind of talent, but the question is how many losers are behind a winner. I believe the number is the same. It is staggering. Another question is will this high-speed funding growth continue?
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The dialectical relationship between profit and risk in the market determines that when profit increases, risk also increases simultaneously, and no strategy can subvert this relationship.
Compared with the long-term trading type that focuses on trend trading, the profits created by this high success rate, large position, and ultra-short position period trading mode are far beyond the reach of long-term trading. Conversely speaking, the security and stability of long-term trading are not available in short-term trading, and violent positions are also special vocabulary for short-term heavy positions. An example of a warehouse being out is looking for a needle in a haystack.
At this time, two problems arise:
One is whether entering the futures market is to survive for a long time and continue to obtain profits from the market (no matter how big the profit is), or to take a big gamble, maybe "go to the sky" from now on, or have nothing, I believe no one would choose the latter. However, in the investment process, he chose the latter mode of operation, probably because he took "reaching the sky in one step" as his goal.
The second is whether to position yourself as an ordinary investor or think that you must be a market genius when you step into the gate of the futures market. There is no doubt that each of us will position ourselves more or less In the latter, otherwise there is simply no courage to enter the industry.
The result of the combined effect of these two problems is that he thinks that he is a genius who is one in a hundred, and can achieve rapid growth of his own capital through his ingenuity, and join the ranks of successful people from then on, but since he is a one in a hundred, the chance of success is 100%. First, in 99% of the cases, investors will quickly fade out of the investment market in various ways of loss. The wrong positioning of oneself directly leads to the wrong profit target, wrong courage, wrong idea, wrong operation, and finally add up, the result is the correct exit.
The most difficult thing in the market is not to multiply funds dozens of times in the short term, but to be able to obtain long-term and stable profit returns. But the vast majority of investors end up leaving the market quickly instead of making a quick profit. This is no different from losing dice, and it depends entirely on luck. And once the lucky few win the lottery, they will attribute the credit to their own skills and talents, and start dreaming of being rich. Luck is actually the short segment of the entire random sequence that is most beneficial to your continuous winning. When luck disappears, the result is that you have to spit out as much as you eat, and funds are limited, and by the way, it is easy to spit out your money , The short investment career is over. This is the reasonable result of not doing risk control and just wanting to make huge profits.
The most difficult thing in the market is to win in the long run, for which three conditions are necessary:
1. Excellent market judgment system (guarantee positive profit after multiple transactions)
2. Reasonable capital management system (to ensure that the risk is low enough to withstand the maximum capital withdrawal caused by the inevitable continuous losses)
3. Trading strategy (to ensure that the system matches the personality of the investor so that the established trading plan can be implemented smoothly)
These three conditions are exactly the three main components of the system.
You can self-reflect that these three conditions do not include the luck factor that generates huge profits, and luck plays a minimal role in it. From the reflection, it can be clearly seen that the difficulty of long-term winning is far higher than that of short-term profiteering. Seeking huge profits is equivalent to letting oneself leave the market faster. However, if you want to win in the market for a long time, you need to pay hard work, you need to face countless failures, you need to have an indomitable spirit, and what you need to do is continuous self-analysis and introspection. Successful investment The road is actually a process of constantly overcoming psychological obstacles until you find your true self.
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Last updated: 08/17/2023 16:00
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