After years of trading in and out of the market, and countless ups and downs, I have a relatively satisfactory trading system. The current concept and logic are very different from those when we first entered the market. If our understanding is wrong at the beginning, it must be even more difficult to succeed in trading. If our ideas and logic are correct from the beginning, then we can achieve twice the result with half the effort.
It is a mistake to think that if you lose nine times and make one profit, you can make it back. In fact, profit is the process of offsetting less loss with more winning rate, which is not noticed by most people. Perhaps, it is true that sometimes you can earn back nine losses and one profit, but you will find that this is not the case in long-term professional trading.
Mistakenly thinking that opening a position is not important and closing a position is the key to determining the profit and loss of a transaction . On the surface, this is no problem, but if the timing and price of opening a transaction are wrong, no matter how good your closing skills are, how can you expect it to be profitable in the end! In fact, people who have stepped into this kind of misunderstanding have a method that can theoretically make a profit in the end, and keep increasing their positions without losing money until they make a profit. However, there is a prerequisite for the success of this method: that is, there must be enough money to add more, and the market must allow you to keep adding. But is it possible?
Mistakenly thinking that where the stop loss is well set, you can open a position against the trend by relying on support and resistance . It should be said that if the control is good, this is not a very bad method, at least it is better than blindly pursuing the ups and downs, but the profit-loss ratio of this method is not attractive. It is often a large but small profit, which cannot withstand a big loss. And it requires the operator to have rich experience and skilled cooperation, do you have it?
The misconception that risk management is at the heart of trading . In terms of trading skills, either think that there is no secret formula, or ignore its importance. And most people often know nothing about trading skills, or have been using wrong trading methods without knowing it. In fact, risk management is auxiliary, and trading methods are the core. Trading methods determine whether to make money or not, but risk management cannot make money, it is used to control risks. It is obviously not acceptable to place the expectation of making money on risk management that cannot make money. Just imagine if you start a company, whether the salesperson will help you make money or the accountant will help you make money.
Misunderstanding that a stop loss is safe . Don't you know that unreasonable stop loss settings or poor entry points will lead to frequent stop losses, which is fatal. I basically don't set a clear stop loss position now. Of course, the concept of stop loss must be in place, even in the heart.
Mistaking a stop loss can be harmful . Because the loss comes after the stop loss, in fact, most people's stop loss is caused by unreasonable stop loss setting or poor entry point. For masters, if there is no unexpected situation, the actual execution of stop loss is not common, and the market will always have unexpected times. If you think the stop loss is harmful and the stop loss plan is often not executed, even if you escape 99 times, you will be swept out by the market one time. This is the case when following a trader for many years in a group. Most of them can see his profitable account curve every day. It is common to turn over every week, but it always disappears on a sudden day. Later, he himself came out to say the explosion warehouse. I think this fatal liquidation is the reason why there is no stop loss.
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