Yesterday I talked with some traders about the "gambling nature" of trading. Many people have their own different opinions. Trading requires a certain degree of gambling, but it should not be completely "gambling". This sentence sounds a bit confusing. But it is indeed the same thing, how to make other bets properly? Then this involves self-discipline and self-control. Today I will talk about how to self-discipline and self-control, and whether they are important in trading.
Every trader will encounter various problems in his trading career. Only by facing the problems bravely and finding solutions can he realize his own growth and the beauty of trading. Self-discipline is an important tool to help traders solve trading problems and eliminate trading confusion.
Self-discipline first manifests itself in following the rules. If a mistake is made in the transaction, it may cause heavy losses, even disastrous ones. In the market, everything is a rule, and only compliance will last long.
Don't indulge, don't sink, those who have strong self-control ability will eventually achieve extraordinary achievements in the field they are good at, and this achievement comes from self-discipline.
Even more so in trading. Control yourself through one thing, hone yourself, and demand yourself with a strict schedule, so that you can achieve your desired goal step by step.
The core of trading is self-discipline
As a self-disciplined trader, you must first develop a good habit of self-discipline in your life. After that, when we apply it to market trading, we will find that our trading will change dramatically.
There are many manifestations of traders' lack of self-discipline, such as:
You placed an order impulsively, but the unexpected market went in the opposite direction; you were timid, and finally lost the opportunity to enter the market; you knew you were wrong, but you stubbornly believed that the market would reverse, and you were eventually wiped out; As soon as there is a profit, I think about floating, thinking that I am omnipotent, and working hard, the result is naturally miserable...
Although trading is not gambling, if you don't control yourself like a red-eyed gambler, you will end up losing.
Therefore, self-discipline refers to strictly abiding by trading rules, conducting detailed analysis on each transaction, and conducting transactions in strict accordance with the plan. Understand the antecedents of the success or failure of the last transaction, and then make a detailed plan for the next transaction.
In fact, good traders generally know that the number of accumulated losses may be more likely than the number of profits. But they are good at grasping some "big market trends", minimize mistakes at important moments, and finally make a profit overall.
Self-discipline, emotional control, and following the trend are often the classic mottos of these excellent traders. Many people can't grasp the big market and often make mistakes. The biggest reason is that they can't control themselves and can't be self-disciplined.
So how can traders make themselves self-disciplined? Mark Douglas mentioned some methods in the book "The Self-Disciplined Trader". First, we must overcome the following mistakes:
(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.
Many traders make the above mistakes, and they make it harder to be disciplined. Only after the above-mentioned problems are overcome, is the question of what to do next discussed. When you master the following techniques, the success of the transaction will be twice the result with half the effort:
(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 risk you can accept-the loss figure within the acceptable range-then learn to look at the market objectively and adopt the corresponding stop loss.
(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.
A self-disciplined trader must abide by four principles
To achieve self-discipline in trading, traders must abide by four principles:
1. Understand delayed gratification
Most traders expect that there will be no floating losses in their accounts after entering the market, but this is very difficult. Therefore, we must correctly view floating losses and delayed gratification. Floating rhinitis on the account can make people feel painful. Sometimes, we need to look down on the troubles of short-term floating losses and resolutely execute transactions according to the plan. This is the most sensible trading method.
2. Face your own problems bravely
When faced with trading mistakes, many traders will comfort themselves, telling themselves that the mistakes are caused by uncontrollable factors, such as market problems, news problems, etc., but they have not discovered their own problems.
If traders cannot recognize their own problems in trading in a timely manner, these problems will lie in our hearts, hindering the improvement of traders' abilities and the maturity of their mentality. Therefore, when facing failure in trading, you need to accept the facts and recognize your own problems, so as to avoid repeated mistakes and become a victim of market fluctuations.
3. The transaction should be logical
What is logical? Simply put, it is to be loyal to the market trend. If you want to pursue long-term profits, you must firmly follow the direction of the trend.
Seek truth from facts, understand the characteristics of the market and the differences between different trading varieties, and do not speculate on the market trend based on your own subjective assumptions. This requires continuous learning and summarization, and a lot of time and energy.
When your trading strategy conflicts with the actual market, you need to re-correct your trading strategy and logic. To overcome the pain of starting all over again, traders need to be very disciplined.
Fourth, the transaction must be properly handled
Finally, self-disciplined trading also requires traders to control properly and maintain a balance in the transaction, which can not only effectively control the transaction risk, but also have the possibility of profit. This requires traders to maintain a delicate balance between decision-making, entry and holding orders. Don't close positions in advance because of short-term floating profits or losses. In addition, traders also need to know how to give up at the right time, and when they are in the wrong direction, they must decisively stop the loss and leave the market. Properly handled transactions will help traders survive the crisis smoothly and enter the next stage of trading smoothly.
In the market, we need to be fully responsible for ourselves, and we cannot think that the market will go according to our wishes. It is impossible for you to control the market, you can only learn to control yourself. Whether it is a profit or a loss, it is all caused by what you do.
Moreover, why do you want to do this, why do you want to do that, such rules are also made by yourself. If you lose money, find the wrong place in what you think and do, and correct yourself! We just need self-control, self-discipline, timely update the correct rules that suit us, and internalize them into our own trading system.
Trading is inherently a high-risk and high-profit industry, and everyone must follow the same market rules. If you want to go further than others on the road of trading, hard work is not enough, you have to be more self-disciplined than others.
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