Someone asked me a question:
May I ask whether in the final analysis, what foreign exchange is doing is not technology but mentality? Does technology just give you a reason to get in and how to get out?
Just a simple answer and share it with you.
First of all, what technology is the technology mentioned in the question itself?
Is it foreign exchange trading technology, or foreign exchange technical analysis? The two are not the same.
Foreign exchange technical analysis refers to the analysis of market trends by using technical indicators and technical forms.
And foreign exchange trading technology refers to how you deal with risks and benefits after you enter the market. For example, what do you do when you lose money? Can't you get out when you make a profit? Whether to increase or decrease positions, whether to reduce or decrease positions, trade several varieties, etc.
The former belongs to analysis, while the latter belongs to real foreign exchange trading. You have to figure out the relationship between them.
Forex technical analysis is only a small part of foreign exchange trading technology. It belongs to the foreign exchange trading technology, a branch of the entry link. Parallel to it are: fundamental analysis, capital analysis, XX analysis and so on.
Therefore, it does not mean that if I draw a picture, look at the indicators, and then buy foreign exchange, it is foreign exchange technology. It is just that you have just entered the market. The real technology of foreign exchange is the process of handling positions later.
Then, about mentality.
If you let a person with a good mentality to do foreign exchange, it will be a dead end, because he has no foreign exchange trading skills. Please note that I am not talking about forex technical analysis, I am talking about forex trading techniques.
And a person with excellent foreign exchange trading skills, if he really understands foreign exchange trading, then he can make profits even if his mentality is not good. Because he understands trading, he understands how to control risks, he understands how to enter the market, he understands fund management, and he understands all the details of foreign exchange trading. In fact, his skills are mature, and there is no mentality problem at all.
The quality of mentality comes from the inner cognition of one's own foreign exchange trading.
So, in the final analysis, foreign exchange technical analysis just gives us a reason to enter the market, because foreign exchange trading is uncertain. What foreign exchange does is the foreign exchange trading technology to deal with risks, and the level of foreign exchange trading technology determines your foreign exchange trading mentality. This is the correct logic. In short, 80% of successful trading depends on psychology, and 20% is method.
1. Whether it is a fundamental analysis method or a technical analysis method, 80% of successful trading depends on psychology, and 20% is method. If you only have a general understanding of fundamental and technical information, but your psychological control is good, you can also make money. On the contrary, if you have a good system. You use this system to do a simulation test. In the long run, the performance of this system is very good, but your psychological control ability is not good, and you will become a loser.
2. Based on experience, good traders know that the number of trades they lose in the long run is more than the number of profitable trades. But through money management, careful risk analysis, and the protection of stop loss orders, they can avoid trouble and catch the "big" market, which is generally profitable. Money management consists of two key elements: psychological management and risk management. Risk management comes from psychology, and traders mentally consider risks in advance.
3. I would like to tell novices and market participants in particular that it is of course necessary to interpret and analyze your motives, but it is even more important to avoid frequent trading under pressure. Go slow at first and ask questions about every trade. What is my motivation for trading? How do I manage this transaction? Did the deal work out in the end? Why? Have you lost money? Why? Write your review and see your own reviews before making your next deal.
4. There must be some distinction between the few winners and the majority of losers. The difference is that traders who consistently make money weekly, monthly, and yearly trade with discipline. When others ask them the secret of their success, they all bluntly say that they lost money at the beginning, and it was not until they learned self-discipline, emotional control, and following the trend that they began to accumulate wealth consistently.
5. First of all, I would like to point out that self-discipline, emotional control and following the trend are all related to psychology, and are related to news service, consulting service, listening to news, technical trading system, fundamental trading system, computer trading system or other trading systems. It doesn't matter.
Second, based on my experience, observation and research, I have found that all traders, winners and losers alike, share certain common experiences. When starting out in trading, or early in their trading career, all traders experience the pain of confusion, frustration, anxiety, and failure. Only a few traders work through these psychological issues before they start accumulating wealth; even for the best traders, this process of change takes years.
6. If self-discipline and emotional control are the keys to success, then unfortunately we are not born with these characteristics. Instead, we have to learn specific mental techniques to master these traits. Learning these mental techniques is a trial-and-error process that can be costly and easily painful. The biggest problem with trial and error in trading is that most people lose all their money early. Other traders, even if they didn't lose all their money, were so traumatized they couldn't get out of it that they couldn't learn to trade successfully consistently. As a result, only a few people can succeed.
7. In the past, emotions such as anger, nervousness, anxiety, and fear had a negative impact on them. At a certain stage, they will find that this impact disappears and they realize that they have changed. Since there is a direct correlation between confidence and negativity, they must have acquired some degree of confidence so they know how to properly respond to possible market conditions. Confidence and fear are both states of mind, similar in nature, and manifested to varying degrees. As a person's level of self-confidence increases, there is a corresponding decrease in his level of confusion, anxiety, and fear.
8. If I think there are risks in the market and I am afraid of losing money, it is not because the external environment is threatening me in some way. The reason I'm afraid is because I can't predict the future, or because I can't take the best course of action. My real fear is that I don't have the confidence to take the right steps.
In addition, I found that I was always trying to avoid losses; when I avoided losses, I was actually creating losses. Think of it this way: no one can predict the future. The environmental information we pay special attention to is the information we consider the most important. Because we think this information is very important, when we pay more and more attention to this information, it means that we automatically exclude other information. Because I tried to avoid losses as much as possible, I created losses instead.
9. The irony is that, on the surface, trading is very simple, but for most people, trading is actually the most difficult career. Success always seems within reach, but it is always out of reach. Only when traders learn a new way of thinking can they change this frustrating situation; this new way of thinking is incompatible with the traditional cultural and social environment.
10. Most traders do not know the difference between traditional culture and trading environment, and have not made corresponding adjustments, so they will make mistakes when trading. Mindset can help us avoid making mistakes by redefining market behavior; it can also manage most undisciplined emotional reactions.
11. Only a few reactions lead to failure, which should be good news for you. If you know which responses lead to failure, you can avoid mistakes and make quicker decisions.
The following are typical trading mistakes that need to be corrected.
(1) Refusing to define loss.
(2) Even if you realize that a certain transaction is a loss and there is no hope of getting back the money, you are unwilling to close the position.
(3) Dead long or dead short, from a psychological point of view, this is equivalent to wanting to control the market, which is equivalent to saying "I am right and the market is wrong".
(4) Don't know how to analyze the possible trend of the market according to the structure and behavior of the market, but stare at the price or the profit and loss of each transaction.
(5) Take revenge on the market after losses, trying to get back what you lost from the market.
(6) Even if you feel that the market direction has changed, you are unwilling to reverse your position.
(7) Failure to abide by the rules of the trading system.
(8) Feeling that there will be a trend in the market and making a plan, but when the trend appears, you don't do anything, and you miss the opportunity to make money in vain.
(9) Don't know how to trade according to your intuition.
(10) There is a pattern of making money continuously, but after one or two transactions, the profits are given back, and so on.
12. Any way of thinking includes ways to accomplish goals and solve problems. These methods are best called mental techniques, or they may be called techniques of the use of thought. For example, you can use certain techniques to prevent yourself from making mistakes in certain situations. Commonly used techniques are:
(1) Learn to focus on goals so that you are actively focusing on what you want, not what you fear.
(2) Learn how to identify and master techniques that are useful to traders, instead of focusing on money, money is just a by-product of technology.
(3) Learn to deal with changes in fundamentals.
(4) Confirm the risks you can accept, the loss figures you can accept within the range, and then learn to look at the market objectively and adopt corresponding stop losses.
(5) Learn to act immediately when you see an opportunity.
(6) Learn to let the market tell you whether it is the end, instead of using your own value system to judge whether it is the end.
(7) Learn to adopt appropriate beliefs and control your perception of market fluctuations.
(8) Learn to adopt an objective attitude.
(9) Learn to recognize "true" intuitions and learn to adopt real intuitions consistently.
13. When a person fails, especially when the goal is too high, there will be three main psychological obstacles. We must first overcome these three psychological obstacles before we can succeed.
The first hurdle is feelings of helplessness, guilt or shame, from which you learn how to get out;
The second obstacle is that painful experiences will create a sense of fear. You have to learn to recognize your own psychological trauma and self-heal;
The third hurdle is improper trading habits. You need to learn proper techniques to accumulate wealth through trading.
The above three hurdles may seem like daunting tasks, but I don't want to underestimate them. Even if you haven't experienced emotional trauma, learning to employ appropriate techniques can be difficult. Remember, as long as you overcome these obstacles, the rewards will be extremely rich. Compared with the huge potential gains in foreign exchange, stocks or futures, which business can exceed the income of foreign exchange, stocks or futures?
14. What reason do you have to change your heart? My three reasons are as follows:
First, because you decide to learn a new technique, or a new way of expressing yourself.
Second, because certain beliefs you already have hold you back from learning new techniques.
Third, talk about it later.
15. You either follow the market or continue to suffer. Here's a hint: the more pain you have, the more you need to change your trading in order to stop being afraid and achieve consistent success.
16. Certain beliefs of most people can affect a trader's success. You are aware of some of these beliefs, and most of them you are not aware of at all. These beliefs have a great influence on your trading behavior and cannot be ignored.
Many traders believe that as long as they do a good job of market analysis, they can avoid the influence of these beliefs. No matter how good your analytical skills are, if you cannot get rid of the influence of these beliefs, these beliefs will continue to affect your psychological system, and you will not be successful. Many market gurus can accurately predict various market conditions, but they cannot make money when they trade themselves. They are either ignorant of the nature of their beliefs, their influence on behavior, or they simply do not want to face the problems these beliefs pose. You have to deal with beliefs, otherwise there will be no progress. If you are not willing to deal with belief issues, you will be repeatedly affected by negative experiences, and eventually you will either find a way to deal with them, or give up after the liquidation.
17. If your technology cannot cope with the market environment, then you need some rules and restrictions to guide your behavior. When you were a kid. You couldn't cross the street alone. Your parents certainly wouldn't let you cross the street alone. When you understand the nature of traffic, they let you cross the road alone.
18. Every trader defines opportunities and trades for his own reasons. Maybe you think others are wrong, but if the collective action of all traders pushes the price in a direction that is not good for your position, then you are wrong, others are right, and you are the one who loses money.
The market is never wrong, the market is always right. Therefore, when you interact with the market as an individual trader, you first have to look for opportunities and then trade. Your trading behavior promotes market fluctuations. In the environment you are facing now, you are always wrong, and the environment will never be wrong. wrong. As a trader, you have to judge which is more important, whether you are right or making money is more important, sometimes you can't have both.
19. There are several psychological factors that can accurately assess the possible direction of market fluctuations. One of those factors is letting go of the idea that every trade has the potential to fulfill your dreams. This illusion can prevent you from viewing market fluctuations objectively. Otherwise, if you are always sifting through market information to back up your beliefs, sooner or later you will blow up and never have to think about being objective again.
20. "How much is reasonable to earn, and how much is reasonable to lose?" For such a question, because your money values, your needs, your emphasis on money, your perception of risks, and your sense of security are all different. Different, so the answer will be different. Because of the existence of other factors, you may think that earning so much money is enough yesterday, but today you may feel that it is not enough. There are no specific answers to similar questions, and the answers will vary with the changing environment. Variety. Because the factors mentioned above have nothing to do with market conditions, if you bring personal problems into the transaction, then you will not be able to observe the market objectively. That's why successful traders always say categorically, "Only trade with money you can afford to lose," which means you should only trade with spare money, which is money that has little value in life. If you trade with spare cash, the question of "to make more, or to make less" will not affect your perception of market volatility.
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