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Based on our experience, professional traders tend to spend much longer at the same level compared to novice traders. A novice trader can complete their training and perform 3,000 model signal trades in about three months, whereas a professional trader may remain at this level for one to two years or even five to ten years. Although technical knowledge can be learned in a few months, self-awareness is not measurable within standard timeframes. Many traders reflect on their trading problems and often cite greed and fear as the cause, but such reflections without detailed information are meaningless. For instance, traders may say that they did not buy stocks when the market was at 1,000 points because they were afraid or that they bought stocks when the market was at 3,000 points because they were greedy. However, this type of reflection does not bring any substantial improvement and only provides temporary comfort.
True introspection requires a detailed and specific approach. For example, if your trading system sends a buy signal when the stock drops to a certain point, but you don't execute the trade because you lack trust in your own system, you may reflect and realize that the real reason for your hesitation is that you saw other traders aggressively shorting the stock and you lacked the courage to take a contrarian action. Similarly, when your trading system sends a sell signal as the stock price rises to a certain point, but you lack confidence due to previous losses from executing the same system, you may face a dilemma of whether to trust a system with consecutive losses or a friend with recent consecutive wins. True introspection requires honest reflection and a willingness to identify and address specific issues.
If you simply attribute your mistakes to a lack of execution power without analyzing the underlying factors that led to your behavior, you will inevitably repeat them, no matter how many times you review your errors. To truly comprehend your behavior, you must have a fundamental knowledge of psychology, not just the general behaviors of humans, but also individual personality traits. For instance, conformity, as mentioned earlier, is a prevalent human behavior issue. Most individuals prefer to make decisions in the same direction as the majority because the regret value of choosing a different decision from the majority is high. To understand this better, you can put yourself in a decision-making scenario, such as choosing between two paths, one that has been taken by many and another that no one has taken before. If you take the path that no one has taken and get bitten by a dog, you not only have to endure the pain but also the possibility of being ridiculed by the majority. However, if you take the path that everyone else has taken and something goes wrong, it's easier for you to accept it psychologically because everyone else made the same decision. Additionally, some well-meaning people may comfort you by saying, "Look at Johnny; he has lost the value of two houses since buying stocks at 3000 points. " Although this advice does not promote personal growth, it may make you feel comfortable. These are common characteristics of human behavior that are inherent in most individuals.
Learning psychology may seem unnecessary for mastering trading to some, as these skills may seem elusive and difficult to comprehend for those who lack logical thinking. However, the reality in the industry suggests otherwise. For example, Wang Yan, the China CEO of Bridgewater Associates, the world's largest fund, mentioned in his speech at Zhejiang University that the company rarely hires finance or business majors but instead prefers individuals from unconventional backgrounds, such as the US Marine Corps.
Sometimes, having excessive theoretical knowledge in finance can hinder one's growth as a trader. I would like to share a true story that happened in our trading room to illustrate this point. When we established our first trading room in Shenzhen, I had just been promoted from a trader to an assistant trader coach. As the assistant trader coach, my primary responsibilities were recruitment and file management for the traders. Despite the perception that these clerical/>/>/>/>