Traders, we have crossed mountains, seas, and crowds of people, overcoming thorns and thorns, and finally sought stability and peace in trading. It is often said in the chicken soup article: I see the brilliance of successful people on the surface, but I don’t know how many hardships they have gone through behind them. The resumption of trading all night long, repeated losses and struggles, and the sharpening of the firm offer.
Trading is not easy, do you think this is the end? No, getting rid of these bad habits has only just begun. I will share my understanding of bad trading habits from three levels, please take a seat.
1. Analyze the bad habits in the market
There are two purposes of analyzing the market, one is to determine the current trend environment; the other is to find possible trading opportunities. Two simple aspects can make us traders fall into the quagmire.
①Looking for the trading bible, never tired of it
When I was young, I watched martial arts dramas. One of my favorite plots was that the male pig’s feet were abused in various ways in the early stage, and then he found a "martial arts cheat book". After his reappearance, his fame shook the world...
In the trading industry, there are not a few people who have such thoughts. I was imagining, and suddenly one day Apple hit my head and suddenly realized, and then found a magical indicator, and then used this indicator to make stable profits.
In fact, this idea is problematic from the logic of the transaction. First of all, we need to know that the essential factor driving the rise or fall of the market is the flow of funds, which is the imbalance of expectations between the long and short sides. When you are bullish at this point, but most people are short at this point, the price will naturally fall.
Second, the reason magic metrics can't be magic is because of popular expectations. If you are the only one using this indicator in the world, and the signal released by the indicator cannot be seen by other traders, then they will not take any action on the signal, and the price will naturally remain unmoved. This is also the essential logic of my belief that there is no trading bible.
Finally, the world is so big, there are all kinds of analysis methods, some use indicators, some use naked K, some use stars and astrology, and some use gossip for trading. What you can think of, others can think of, so there is no such thing as a unique trading bible.
Trading bibles do exist, and only for you. That is to combine your own actual situation and formulate a trading model that suits you. This is the trading bible we should be looking for.
②The search for precise points is one in a million
First of all, the support and resistance level is never a precise concept, it must be a variable. We must know that the K-line charts we see are all processed systematically. In principle, price quotation behavior does not exist in such K-line charts, but single-point undifferentiated quotations. This is a trading mechanism. For example, the K line we see in the chart, the opening price is 1.35000, the highest price is 1.35250, and the lowest price is 1.34850. This is a K line. But in the actual process, the price behavior is, 1.35000-1.35030-1.30050-... single-point quotation, there is no price in the middle. Therefore, support and resistance levels cannot be a definite concept.
At the same time, due to the differences in quotation providers, the prices we see are all prices processed by quotation providers, and cannot reflect the market situation with certainty. There will also be slight differences in prices between different quotations, etc. These non-controlling factors are also one of the basis for making the pressure level impossible to be determined.
Due to the randomness of traders, it is impossible for the trading crowd to look at the same position all over the world, so there is no precise point. If the traders all saw the same position, all buyers, then the trade wouldn't happen.
Therefore, please give up the search for precise points, because you will never find such a position, and it will only hurt your trading confidence.
③Deterministic thinking is harmful
I still remember that when I first started trading, I liked to talk about the market with others, and I often heard words like "gold must reach 1900 today". Now think about how ignorant I was at the time.
Everything in the trading market is unpredictable. Whether in life or in trading, we can only stand in the moment. I don’t know if you have such a feeling when you are doing transactions. When you draw the path of future prices in the process of analysis, but the market will not follow your expectations. This is not God abandoning you, because Even God doesn't know where the price will go.
Therefore, please use probabilistic thinking to think and arrange your own transactions. What to do if the price is supported at the pressure level, and what to do if it breaks through the pressure level. Soldiers, first sharpen their weapons, and then follow their actions.
2. Bad habits in the transaction process
Analyzing the market is just a rehearsal to make one's expectations match the market, and trading strategies are the foundation of turning expectations into profits.
①Heavy position trading, either dead or disabled
My point of view on this issue may be quite extreme, because none of the traders I have met with heavy positions can survive in the end.
However, there are two ways to restock positions that are advisable. One is, on the basis of profit, increase the position to the state of heavy position. For example, your gold transaction has already made a profit of 10,000 US dollars. It is advisable to use this 10,000 profit space to increase the position. Even if there is a loss, it will not be lower than the cost price and will not cause losses to the account.
The second is, under the condition of clear stop loss space. For example, if the stop loss of this transaction is only 20 pips, and your normal trading stop loss space is 60 pips, then you can try to take a heavy position in this transaction. If the stop loss is also within a reasonable range.
In addition to these two situations, any heavy position carries great risks, and if you are a little careless, you will lose the whole game. Trading must rely on the accumulation of time and volume, rather than short-term sudden profits.
② Weak risk control, no stop loss
Stop loss is also a commonplace problem. Stop loss has two meanings. Stop the loss on the book and let the market tell you that the transaction layout failed; stop the loss in your heart and avoid the weakness of luck in human nature.
There may be many people who will adopt this method and choose not to set a stop loss. 10,000 US dollars account, 0.01 floating orders, extremely small positions, no stop loss, only profits are made, and losses are always held. Because in their view, the price fluctuates back and forth in shocks. As long as they don't enter the market, the floating loss will make a profit sooner or later. This method of operation, under normal circumstances, will not cause problems. There are only a few problems: first, there is a black swan event in the market, no matter how small the position is, unless your funds are large enough, such as the Swiss franc black swan event; Holding for a long time (several years); third, the utilization rate of funds is extremely low. In the process of carrying orders, floating losses + inventory fees + margins occupied + inflation pressure +... I thought I had no money to make money for milk powder, how could I If you want to get caught up in it, the funds will not be of practical use.
Therefore, the stop loss must be paid attention to, and the stop loss cannot be set because the stop loss is often hit. It is not the fault of the stop loss that the stop loss is hit.
③ indecision, indecisive
When there is a trading signal, we need to enter the market decisively without any hesitation. When I traded in the past, such a situation often occurred. When the market reached the signal area, I always wanted to wait for the market to give a "certain" signal, such as bullish engulfing, head and shoulders bottom, etc. before entering the market. When the price is really like this, the price is already very far away from the support level, and the stop loss space has become larger, and it is still hesitant. I want to wait for the price to continue to step back before entering the market, but when the price continues to step back, I feel that the decline is so strong that it may break through... again and again, the opportunity is missed.
In fact, the main problem of hesitation in trading is that you are not confident in your trading system, and you don't even have a fixed trading system. There is a signal, fear that it is a wrong signal, fear of entering the market early and missing a better point, and so on. These are all problems of the trading system.
Therefore, the trading system should not only exist in concept, but also in practice.
3. Bad habits after the transaction
Deal closed, rest easy? If a mistake is not corrected, then the mistake will continue endlessly.
①Emotional linkage
In theory, each transaction is an independent and repeated event, and the result of the previous transaction has no logical relationship with this transaction. But regardless of the profit or loss in the transaction, few people are indifferent, so we will all be affected by the results of the previous transaction.
When you make 20 consecutive profits, the 21st transaction will definitely be affected by the previous transaction results. When you lose 20 times in a row, you may give up the 21st trading opportunity, even if it is a good trading opportunity.
Therefore, the only way to avoid it is through long-term firm practice and empty-cup mentality. Force your mind to not be affected by other outcomes.
② Regardless of disregard, resign to fate
After the transaction, recording the transaction results is a very statistically significant job. Not only is it a comprehensive rehearsal of the transaction, but you can also examine the problems in this transaction from the perspective of God, and more importantly, it is a record of mentality, how to operate when you encounter a similar market next time.
If, let it go, don't do this job. Then the wrong transaction at the beginning will still continue. One wrong trade can cost you more.
In short, please face up to trading. If you choose, then treat trading as a career that you will strive for all your life.
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