In our discussion today, we will reveal some fundamental truths in the world of trading. First of all, we need to recognize that the connection between actual trading and market analysis is not as strong as many people think. A lot of traders are keen to analyze the market, especially on various forums, and you will find many experts who like to draw trend lines and share their analysis. However, in the long run, these charts may not be very useful. Because successful traders often have similar trading logic and opening expectations.
The second truth is that trading is actually a game of anticipation. A trader opens a position only after the expectation is confirmed by the market. Many traders know that they should not open positions against the trend, but they often do so in real trading. This is because when the market is fast, they expect it to be next, but they rush to short without waiting for the market to be real. There is a conflict between two mindsets: you expect the market to be, but the market you see is. The strategy for resolving this contradiction is to find a way to confirm your expectations.
The third truth is that a breakout in trading is often the safest, it represents the release of energy and a change in momentum, and it also means that there is a trend movement in the market. This is the most critical and effective way to open a position.
The fourth truth is about structuring a trading plan. Although trading freedom is what many traders seek, the world of trading is not a free one. On the contrary, trading requires more self-discipline and restraint.
The fifth truth is the importance of stop-loss. Stop-loss is the most important part of the trading rules and a sign of a trader's maturity. There is no fixed reference indicator for a stop loss, but it is usually the right thing to do to limit the stop loss amount in the trading rules.
The sixth truth is that Stop Loss is controllable, while Profit is uncontrollable. Trading consists of two ends: one end is the stop loss and the other end is the profit. In trading, what we can really control is the stop loss end, and the profit side is always out of control. Therefore, we should focus on stop-loss and risk management. As long as we control the stop loss and risk, then success is not far away.
The seventh truth is that trading should be a simple matter. Don't overcomplicate it, real traders will find that trading is actually quite simple, just repeating the same process over and over again. Years of pursuit may make you realize that there is really nothing on the top of the mountain. As you descend the mountain, you will find that there are many others climbing, and you can tell them that the trade is actually quite simple and does not require much gear.
The eighth truth is that a trader should be looking at the money curve. The goal is to draw a steady upward curve, which is the ultimate goal of a trader. Those who are keen to analyze ** on the forum, will they be able to draw their own money curve? What does their funding curve look like? How much does the money curve correlate with these so-called analyses?
The ninth truth is that traders should pay attention to themselves. Which is more important between paying attention to the market or paying attention to yourself? This question can be difficult to answer because both are important. But if you have to choose, I think it's more important to focus on yourself, because you are controllable, and the market is not controllable. Being in control of ourselves means that we can choose how to respond to an unknowable market.
Finally, have a deep understanding of the process of trading. Trading is trading, and it includes the pattern of the market, expectations, confirmation of expectations, opening positions, setting stop losses, adding positions, reducing positions, and closing positions. The process of trading is actually a process of interaction between the trader and the behavior of the market. In this process, we are passive and the market behavior is proactive. We can only follow the market behavior and react most appropriately, such as stopping, adding, reducing or closing positions. The key is how to react most appropriately and rationally to market behavior. Our knowledge is always limited, but we can react appropriately and rationally by defining a set of trading rules or trading systems.