Early in my trading career, I had the opportunity to speak with a very successful investor. We discussed many aspects of trading, including the similarities and differences between long-term trading and short-term trading, because he believes in long-term investment and I pursue short-term trading. After all the chat, what inspired me the most was actually a question he asked. His question was, "How do you feel when you've made a good deal?" I'd never thought about that before, and I answered honestly, "I don't feel any different." He thought, I answered well. During our entire discussion, I found the most valuable point is that in a transaction, whether it is winning or losing, there must be no emotion.
Common pitfalls in trading No matter how different your trading style, analysis method, time dimension and market are, there are some common factors that will always interfere with your trading results. Not to say that all failed transactions are caused by the following factors, but most of them are hard to come by.
1. Impulsive trading tendency;
2. Missed the entry point, but intervened in pursuit of orders;
3. Refusing to accept floating losses within a certain percentage;
4. Can't take a break, and tends to be wary.
The above defects usually lead to "trading syndrome", which generally means that a trader may perform well until a critical point is reached. After reaching this point, there always seems to be an inexplicable force suppressing the funds in his account Continue to rise, this is the bottleneck period in the growth process of traders. Under this effect, no matter how much the trader makes, he will basically spit it out later, or make a large loss first, and then make up a small amount. Anyway, it is difficult for the account to continue to grow. However, in fact, this problem is not mysterious. The problem lies in the traders themselves, whether they admit it or not.
The first step to get out of this predicament is for traders to realize this. Knowing your emotions is the biggest drawback. Trading must put emotions aside. When you make a profit, you will be happier, you will feel happy and relaxed. Just imagine, if you care about or pursue this kind of psychological pleasure when trading, the negative effects will also be obvious, that is, if you think about the psychological feeling after you make a failed transaction, you may try to ignore it. Such a bad feeling, but when you ignore enough of these deals, you're probably broke. You feel powerful when you're happy - it's undeniable that joy is a good thing, but the problem is that just because one or a few of your trades are successful doesn't mean you have control over the market. Feeling in control can give you the illusion that your decisions are the right ones.
The failure of a transaction may not match your illusion of strong "control", but you will try to use your "power" to change this failed transaction, and it is a very regrettable fact that you do not study your own loss-making transactions. Sometimes you may even feel bored even if you trade profitably, this is normal. Trading is actually an emotional "roller coaster", you alternate between excitement and depression, and boredom is a middle point between the two extremes. Burnout is another emotion that a profitable trade can create. Because in real trading, you either make money or lose money, and the pressure is actually very high.
The indicators used in making trading decisions can be confusing at times, and getting them right requires a lot of concentration and dedication, which also leads to more stress. Sometimes you even find some other reason to refuse a deal because you are afraid or avoid these pressures. For example, if you choose to trade light positions, or close positions frequently and easily, if you do so in a conscious state, it may be okay, but if you do it subconsciously, the problem will be serious. Fatigue, boredom, agitation, and excitement are all signs that you are in emotional trading.
What is the solution?
When we talk about trading flaws and emotional trading, it's often about a lack of discipline in trading. For ordinary traders who are free and easy, it is very difficult to abide by the established and strict trading discipline. But that doesn't mean they can't create their own discipline and principles. The most important principle is that you have to remember that even the most perfect trading system will experience losses. Every transaction, whether it is profit or loss, needs to be carefully evaluated and lessons learned. In order to solve the problem of emotional trading, your goal now is to remove the emotional factor from your trading discipline. Impulse is a common trading trap. In fact, you also understand that you need more trading tips, such as clearer turning points and clearer trends. But for some reason you refuse to wait.
For example, you try to buy at the bottom, but being too impulsive will cause you to lose the initiative, and the result may not be ideal in the end. You have to learn to be patient, remembering that opportunities always come again. Patience helps preserve strength, so that in the decision-making process, you only need to wait for further signals to appear, which will not consume more energy on you, and will keep you focused while waiting. If you miss an entry point, you should sum up the reasons for the miss instead of chasing ups and downs. Poor execution is another important reason why many traders fail to follow their trading systems well. They don't really trust themselves or their trading rules. This requires you to carefully study the entry principle in your trading rules, not simply judge the point. If you don’t see any floating losses, you need to understand the importance of losses within a certain range to transactions. You need to summarize all past transaction records and judge the magnitude and direction of market changes at the beginning of opening a position.
Investors who aspire to become professional traders need to regard trading as a profession. If you have enough confidence and determination to do a good job in futures trading, then I hope you can let me help you, arm yourself with professional strategies and research reports, and form a complete trading system and a full understanding of the market. When you do all this, you will naturally be able to achieve stable profits!
Add
