Finance is originally a shura field, and trading is a zero-sum game. It must be a minority of people who can make stable profits in this battlefield without gunpowder. The trading market has always followed the 28th rule. Less than 20% of the people who can make stable profits in the trading market are just passers-by in the trading industry. out of the market.
"Using copper as a mirror, you can correct your clothes; using history as a mirror, you can know the ups and downs; using people as a mirror, you can understand the gains and losses." Since most people lose money, if you know the reason for their loss, can you make a profit more easily? Woolen cloth?
Specific trading methods for losses:
A. Heavy warehouse.
There is a saying in the industry that if you have a heavy position in the stock market, you will die (it is another matter for a fund manager to have a heavy position in the stock market). This is not alarmist. I have been trading foreign exchange for many years, and I have never seen anyone who can make a profit in the market by relying on the trading method of heavy positions. Occasional profits in the account are basically short-lived, let alone long-term stable profits. First of all, the position is too heavy, every transaction is a gamble, and the profit and loss of the transaction are all dependent on luck. A sentence in the movie "Flying Life": "With luck, you can win 100 meters but not 100 kilometers". Secondly, the position is too heavy, and more importantly, it will affect your trading mentality. Any fluctuations in the market will affect your emotions, thereby affecting your normal judgment on the market, and you cannot bear any floating losses.
As for how many positions belong to the scope of heavy positions, there is no fixed standard. Basically, a position of 10% of the account is considered a normal position, and a position higher than this ratio is more inclined to a heavy position. But there is a very important criterion for judging heavy positions, and that is to see your own limit of accepting losses.
B. Stop loss.
Trading without a stop loss is like a car without brakes, and the risks involved can be imagined. Some people may be lucky, "I am watching the market in real time, and I will exit the market when I reach the stop loss position." There are not a few people who have this kind of thinking. They just overestimate their own self-discipline and underestimate the temptation of finance. Stop loss is not only a problem of operating techniques, but also shows that traders ignore the risks of the financial market.
C. Carry the order.
Because I didn't stop the loss in time or didn't plan to stop the loss at all, I wanted to make a small profit in the range fluctuations, but accidentally encountered the trending market, and finally changed from the original intention to hold the position for an hour to a long-term position, and I couldn't extricate myself from it.
D. Lock position.
When carrying orders has reached the limit of the account and mentality, lock-up has become the last straw for traders. Losses are locked in name, but in essence it does not help. Locking positions is easy and difficult to unravel. In the end, it is very likely to leave the market sadly due to the failure of liquidation. Such examples abound.
E. Loss increase position.
This is also a trading method often adopted by loss-making traders. They use the pyramid or Martin-style principle of increasing positions in an attempt to even out their trading points. If they encounter a trending market, only the fate of liquidation awaits them.
F. Pursue a high winning rate, make a small profit and lose a lot.
Many traders pay too much attention to the winning rate, and even pursue a perfect transaction record, always thinking that there will be no trades that lose money in their accounts. But the market is inherently an uncertain market. There is no trading system that can make your trading 100% profitable. Behind the 100% winning rate of those so-called masters are mostly transactions that carry orders and make losses. The purpose of trading is to make a profit, not a near-perfect trading record.
G. Excessive trading, frequent trading.
From the perspective of probability, the more times you trade, the more likely you are to make a mistake. Frequent traders always want to grab all the profits in the market and don't want to miss a single opportunity. While wasting time and energy, it also keeps shrinking the account.
H. Betting on data.
The foreign exchange market will release important economic data every week, and the rapid price fluctuations at the time of the data release also make some traders want to make quick money. Little do they know that risks and benefits coexist.
K. There is no trading system.
In the process of trading, no trading system is formed, and there is no fixed trading method. For example, use the moving average to enter the market today, and use the trend line to enter the market tomorrow; the conflict in the execution of trading methods, such as the trend line reaching the support point, while the indicator MACD is overbought at a high level, and I don’t know how to choose, etc. Similar problems make traders Hesitation and missed opportunities when choosing to enter and exit will inevitably lead to losses in the long run.
Conclusion:
If the above mistakes can be effectively avoided during the transaction, although there is no guarantee that the transaction will be profitable, at least there will be no major losses. The main reason for similar problems is that there is no relatively perfect trading system.
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