In fact, everyone has some very bad trading habits when trading, which results in the ultimate inability to make profits.
Habit 1: Perfectionism Many friends always like to put “what if” in their mouths when making transactions:
"If I hadn't closed the position, I would have made xxx profit by now."
"If I stop the loss in advance, there will be no subsequent losses."
"If I were more courageous and added more positions, I could make xxx money this time."
All traders have said this, and all of it is said after the fact. And all the transactions we make face the future, and the future means unknown. Therefore, there is no perfect trade, and there is no such thing as buying at the lowest point or selling at the highest point.
The market fluctuates: a decision that seems correct on Monday may turn out to be wrong on Tuesday as the market fluctuates, and the next day it may be a different result on Wednesday.
From the perspective of the timeline, looking at the past from the present, everything in the past is imperfect. Therefore, never use the useless word "what if" in trading.
How to overcome it?
Focus on the process of trading rather than just the results.
The essence of trading is a game of probability, which shifts the focus from the right or wrong of a transaction to the success rate and profit-loss ratio of the overall transaction.
What we have to consider is that after 100, 200, or 300 transactions, the capital curve of our account will rise, and each transaction is just a point in the capital curve, and the effect of one point cannot be over-amplified.
I set stop loss and take profit after entering the market, and leave it to the market whether I am right or wrong. I never worry about whether I am right or wrong once or at the moment, because it is meaningless.
Habit 2: Excessive pursuit of technical indicators. Throughout the process, we are pursuing perfect technical indicators that can accurately predict the market. Even if we cannot accurately predict the market, we can still predict the market trend with a high probability.
But the reality is: No matter how hard I try, no matter what technical indicators I use, no matter how many indicators resonate, I cannot predict the market trend.
The real and stable profit from trading is precisely because I gave up the pursuit of perfect technical indicators and agreed that trends cannot be predicted, indicators are standards, and there is no essential difference between different indicators.
How to overcome it?
"More sorrow is greater than a broken heart." Perfectionists will set too high standards. Once a technical indicator cannot meet the standard, they will throw it away and replace it with a new indicator. However, no technical indicator can reach the perfect standard, so many people lose themselves on the way to find indicators.
The purpose of our trading is to make profits. Can only perfect indicators make profits? of course not.
A less-than-perfect indicator, but profitable; and a perfect indicator, unprofitable. How do you choose between the two?
Results-oriented, pragmatic traders will choose a technical indicator that is profitable but not perfect.
Habit 3: Choose Phobia There are dozens of trading varieties on the foreign exchange trading software, including direct trading, cross trading, gold, crude oil, stock index, etc. There are so many, which one should I choose?
In recent months:
It is a good opportunity for U.S. stocks to start falling from a 10-year high; it is also a good opportunity for gold to rise to a 7-year high; crude oil has fallen below 20 US dollars, a good opportunity that has not been seen in more than ten years; Bitcoin has fallen to 4,000 US dollars, and bargain hunters good chance.
There is never a shortage of opportunities in the financial market. Every opportunity is so tempting. Every opportunity means money, and big money. Many traders switch from US stocks to gold, from gold to crude oil, and from crude oil to Bitcoin; After struggling for a long time, there were many good opportunities but I failed to seize them.
It is said that the daily trading volume of the foreign exchange market is trillions of dollars. It can be said that there is endless money for us to make. We have special skills to earn the money we should make. The profit in the foreign exchange market is like fine sand in our hands. The more we can hold it, the more we can make it. I can't hold it tight anymore.
The core and oldest philosophical thought left by our Chinese ancestors is the word "letting go". Everyone should appreciate it.
How to overcome it?
Every trader's energy is limited. Do the products you are most familiar with and good at, and do them well. Don't miss your own profit opportunities, and don't envy or dream about opportunities that don't belong to you.
You must not jump around and try to seize any opportunity, but in the end you will fail to seize anything.
In the actual practice of foreign exchange, I do 10 varieties in the hourly band. I don’t do or look at other varieties. No matter how good the opportunity is, it has nothing to do with me. There are 4 varieties in futures trading, and we only look at 4 varieties.
What we want to do is make money in the market, not make all the money, right?
Traders should think with probabilistic thinking. There is no deterministic result for every transaction, and change from "certain" to "possible" thinking.
Are we pursuing trading profits, or are we pursuing some perfection, indicators, and varieties of trading? If you want to make a profit, you must give up some obsessions.
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