I would like to ask you a few questions. How many people are thinking hard about how to do transactions alone? Has anyone ever been trapped above 5,000 in stocks? Do you have this feeling - when you buy it, it falls, the point is very negative, and you can't stand the cut, and it rises as soon as you sell it. I am eager to invest, but I feel that it is difficult to start. I feel that I have no inside information when I am doing stocks, and I feel that the futures market is very complicated. , At 3 o'clock in the morning, we have to wait for the Fed's interest rate decision. In the Asian market, we look at the Japanese yen and the Australian dollar. In London, we trade in the British pound. In the US, we trade in gold and crude oil.
Many friends have been injured in this market, how long can your novice aura last? The halo of a novice is just entering the market and made a sum of money out of nowhere, but the good times didn’t last long. After making the money, the next few transactions quickly gave back the profits within a month or two. The reason is simple, what is most important now? Professionalism is the most important thing. For example, if you are not a doctor and have never learned how to operate, can you perform surgery on people? cannot. Then you are not a trader trained by a professional institution, why do you think you can make money?
What is the secret to long-term stable profitability? Let's take a look at it first. Every industry can be divided into laymen, apprentices, etc. After being instructed, they become teachers, and then become masters and masters. The most important process is the learning process. If you don't learn, you can't see the market clearly, and you can't use your knowledge to realize it in the market. What is the core of making money in investing? How can I make money? Buy low and sell high, it's simple. Here comes the question, how low is low, and how high is high? It's easy to say it orally, but it's hard to do it in practice.
Who is the counterparty behind your screen? Is it just the Goldman Sachs trader who is about to ship? He ships at a high position, and you just buy in. The investment market has no boundaries and is a game played by global investors. The question is, how many are professionals and how many are amateurs? Today I want to tell you that if you are not professional enough, don’t imagine yourself making money stably for a long time . You may take a gamble and make hundreds of thousands of dollars in full positions. After withdrawing money, you will never play again. As long as you continue to do it in the market, as long as you are not professional, you will definitely be eaten by professional people. This is the iron law.
The basic differences between professional traders and retail investors are:
The first is induction training.
Professional traders first train for 200 hours, and then do simulated trading after one or two months. A lot of training takes up 80% of the working time, and the elimination of the bottom, more than 100 people may leave only 10 people in the end, but retail investors have no induction training at all, and they don’t even count as occupations. Some people are introduced by friends or watch the news. I feel that foreign exchange is very profitable, so did you have a sound mind before entering? If the mind is not sound, then it will be miserable.
The second is wind control.
Strict risk control is not only the risk control of each order, but also the risk control of funds and trading strategies, as well as the risk control of the selection of investment products. For example, on Brexit, Aunt May had just finished two sentences and we were confident of reaching an agreement, but suddenly the cabinet resigned and the pound plummeted. At that time, the United Kingdom was always troubled by the news of Brexit, and the pound rose and fell sharply. Would professional traders touch the pound? Unless you have particularly strict risk control, you need to avoid this market.
Risk control should also be reflected in whether there was a reasonable reason to operate at the beginning. Professional traders have many levels of control over risk control. Retail investors have almost no risk control. They manage themselves and are prone to impulsiveness. I have made a lot of money in the short term, but I am still unwilling to reduce my position.
Once an individual investor has a floating loss, when it’s over, and buys/sells wrong again, wait and carry it again—the original loss of 100 US dollars, and suddenly another loss of 1,000 US dollars, thinking that if they leave, won’t they lose more? I started losing $2,000, what should I do? Many people choose to become ostriches, they don't look at their accounts anymore, and their minds are quiet when they are out of sight. It’s so worrying, don’t read it for three days, and check it after a month, why is there only 10% of the account left?
I have seen with my own eyes a $300,000 account, 20 lots of gold, and a position of $1,300. When I asked me, it was $1,260, and I lost $40. The total loss was $80,000, and there was still $220,000. Is there any help? I said that we should quickly cut the order and go short after the rebound. The customer says that the money is not bad, and if the margin is not enough, you can make up. You are absolutely not allowed to lose money, and you must make money. In the end, when the gold price was 1,200 US dollars, I lost a total of 100 US dollars, and the total loss was 200,000 US dollars. At this time, I became nervous, and asked if there was any help? The $1260 did not run away, but increased the position, and then it exploded. After that, I re-deposited 200,000 and continued to carry it, and kept carrying it. It was really gone when it reached 1,140 US dollars, and it was locked at 1,160 US dollars. Once locked, the price rebounded.
The conclusion is that many individual investors do not have the courage to face losses. Why do their floating losses range from thousands, to tens of thousands, to hundreds of thousands? During this period, I have been asking whether the floating loss will become a real loss if the position is closed. The underlying psychological reason for not wanting to face losses: Losing this money proves that one’s previous decision was wrong; the second proves that one is a fool ; Compared with the latter, the latter accounts for a larger proportion, and most retail investors have to save face because they want to brag.
During the bull market, Aunt Zhang and Aunt Li bought vegetables and chatted every day like winning lottery tickets. During the bear market, the market is not good recently, the stock is trapped, you bought it, and I was trapped. When you lose money, you need psychological comfort. If the whole world earns and you lose, you will feel too miserable. The first reaction of many people when they face a loss is not to cut it off at a very young age, and want to get out of the game/the loss is smaller before entering the market. Does this kind of thing happen to professional traders after you have to untangle it? Will they have the same mental processes? The answer is that professional traders don't have any chance to make this kind of mistake. Before each entry, they have two questions: 1. Where to buy/sell 2. How much do I want to buy, and what is the risk value I am willing to pay?
In this market, as long as there are a few conditions to make money? One is the ability to repeat infinitely . If you want to make money, you must keep opening and closing positions repeatedly. You can't just do one transaction, and you must have the ability to discover opportunities infinitely repeatedly. Second, the winning rate is slightly higher. The third and most important point that when investing, as a professional trader, I never thought of comparing the correct rate with others . I have analyzed so many markets, maybe half of them lost money, but my final profit is still Top 1, why?
Because half of the money I lost had a small stop loss, such as 30 points or 50 points, while the other half of the profitable orders had an average profit of 500 points per transaction. In other words, if each of your transactions has a 1:10 profit-loss ratio/odds, what kind of confidence does this give you? As long as you are not only right once out of 10 times, then you must be making money. As long as the winning rate is greater than 10%, you must be making money. As a result, your winning rate is 50%, then you must be making money.
So, is it important to look at the market and direction? Not the most important, but you can't get everything wrong. How much money you make when you are right, and how much money you lose when you are wrong, the ratio between the two is very important.
Therefore, the key is whether the winning rate is guaranteed to be 50%, and secondly, is the profit-loss ratio more than 1:2? If these two points can be guaranteed, then the money will be made more and more.
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