"I am a successful person today because I was a miserable loser yesterday."
This is an unforgettable sentence for me. Every speculator who can enjoy a successful transaction has experienced painful failures, no matter whether this failure is big or small. Successful traders must have gone through the process from failure to learning to success. In this process, failure is undoubtedly the starting point. Only when you face painful losses can you truly think of key issues.
In this market, I see many traders who are frustrated by losses and they can’t cheer up. I even feel that trading has become a terrible thing. Loss is definitely not a nightmare, but the dawn of dawn. Successful traders always gain something from losses. They always ask themselves after the loss, what did I do in the market? Why did I fail? What can these failures teach me? What if I avoid them in the future? Only when you figure out these problems can you not make the same mistakes.
We must learn to control losses. We have seen in many books that we should avoid risks and avoid losses first, and we are even controlling losses ourselves. But losses always come on us, and the same losses even come more than once. What exactly is the reason? Because you don't know how to control your losses at all, you are still doing your own things after something terrible happens. You just think of the problem in your mind and don't try to solve it. For successful Western traders, losses have become an art, and they are avoiding losses as much as possible. If we want to be good traders, we have to master it.
There is a saying "If you don't know how to lose, you'd better pack your luggage because you have only a handful of days in the stock market."
A sentence from Lawrence: "If people have two kinds of study life: the first is to make mistakes that must be made, and the second is to benefit from these mistakes." How enlightening this sentence is for traders. We must learn to face failure. In fact, success or failure depends entirely on how you face failure.
Successful traders often pay more attention to two things: trading with the trend and strictly stop loss.
Trend tracking The most basic trading strategy: cut off losses and let profits run.
In the trading market, everyone knows that it should be "going with the trend" and knows that "going against the trend" is very dangerous, but when doing specific operations, they usually don't know how to go with the trend. Why is it so difficult to follow the trend? There are probably the following reasons.
(1) Since you don’t believe in trends, trends do not exist, but you don’t believe them very much.
(2) Because you always think about callbacks, you are afraid of callbacks, and don’t know how to deal with callbacks.
(3) Because you don’t have a set of rules to follow the trend.
Trend Tracking Trading System Five Core Questions: In what kind of market does
buy and sell?
I don’t know which market will have a big trend - so diversification is needed. How much should
be bought and sold?
The risk you take is too great, and you may go bankrupt; the risk you take is small, and you will lose more than you lose if you remove the transaction fees. Good fund management is finding a balance between the two. Conservative betting methods lead to conservative performance, but the greater the bet, the greater the risk. Bold gambling leads to destruction.
When did you buy it?
makes up for small losses with large profits. The rules for trend tracking traders to enter and exit are to use price technical indicators as reference. Technical indicators are only a small part of the transaction, not all. They are a set of tools in the toolbox, not the toolbox itself.
When will you clear your lost positions?
The faster the position you lose, the better. If a person realizes the mistake he has made and immediately gives up his losses, then if he does it 3 or 4 times in 10 times, he can bring him wealth.
When will you exit your profitable position?
allows unlimited profit growth. If you sell and cash out, those profits will become real.However, the trend is still upward. You just made a huge mistake because you limit profit growth. The trend is still upward, and it is not the time to exit the profitable position.
Trend Tracking Traders do not believe that buying at the bottom and escape from top is feasible, so they do not set profit targets. Profit targets limit profits. Set profit targets artificially just to make yourself feel at ease, but you may limit the potential of the big trend.
Double speculation method for trend trading
Through years of exploration and testing, we have found a reliable method for trend trading dual speculation.
This double speculation method is:
price is in a very broad horizontal consolidation period. You can conduct a game called counter-trend trading. When the price turns back to the bottom of the trading range, buy when it rebounds and sell when it rises above.
However, once the market jumps out of this horizontal consolidation, no matter which direction it is in, it is necessary to abandon the positions built on the counter-trend exchange and establish positions in the strong direction that occurs when the breakthrough occurs.
must consistently adhere to all trading signals as the big profits in the decline period in early January outweighed a series of small losses during the market sideways consolidation period.
market is locked in a very wide range. During this period, counter-trend trading can be done. Short near the top, cover and go long near the bottom. The counter-trend position will only be protected by the closing stop loss point , and the stop loss point is not far outside the range.
closing price no matter which direction the breakout is made, the counter-trend position must be cleared to establish a new trend position.
To implement this strategy, it is necessary to determine whether the price trend of each market is horizontal or there is a clear trend (up or down). So, how to determine whether the trend is horizontal or there is a clear trend?
(1) Daily, weekly and monthly charts are carefully studied and judged.
(2) A very objective way to confirm the trend is to use the dynamic trading system (DMI). Use the quantities of 0 to 100 to measure the degree to which a new market forms a trend. The larger the value, the stronger the trend, and the smaller the value, the closer it is to the horizontal consolidation without a trend.
(3) Moving average, volatility, oscillation and time period.
For each horizontal consolidation market, support points and resistance points must be found. If the closing price is lower than the indicated support point, the trend will reverse downward; if the closing price is higher than the indicated resistance point, the trend will reverse upward.
When will the upward trend market reverse to sideways (closing price is lower than the indicated support point), and when will the downward trend market reverse to sideways (closing price is higher than the indicated resistance point). For each horizontal sorting disk, you must find the following.
(1) above and below the consolidation area.
(2) From the closing price, where does the price level (market operation point) change from sideways to upwards (breakups) or from sideways to downwards (breakdowns).
stop loss point points out that the counter-trend position should be cleared and the place where the trend position should be established is outside the horizontal consolidation range. The buy stop loss point for exiting the counter-trend short position is above the trading range. The sell stop loss point for exiting the counter-trend long position is below the trading range.
When setting a stop loss point, you must first consider how much loss you are willing to bear in the position you are building, and then look at where your entry point is. The stop loss point is set at the place where the loss amount is equal to the total loss you are willing to bear.
not only treats the stop loss point as a clearance point, but also operates in reverse here. If the market close price reaches my buy or sell stop loss point, it will change to a trend position.
stop loss point and position building point each account for half of the margins of the trading range.
Although trading is against the trend, once the market reaches your stop loss point, you must stop the original practice and trade with the trend instead. Again, this is only done when the closing price reaches the stop loss point.
As for how to exit the position that follows the trend?
or use the stop loss point, whether it is making money or losing money, exit as soon as it reaches the stop loss point. The initial stop loss point of the trend position is set at the loss you can accept.
If the market is beneficial to you, you still have to face the problem of exiting your money-making position. Experience shows that you will never find a feasible and reliable way to sell to the highest point and buy to the lowest point. Set up an "efficient" stop loss point and wait for the market to automatically bring you out. As the market is in favor of you, keep moving forward and moving forward until you finally encounter a stop loss and exit.
takes the trend and stop loss and exits (when we are talking about the stop loss point during the trading session, rather than stop loss and exit at the closing), it does not necessarily mean that the trend has reversed, it is likely that you have reached the limit of pain. It is best to cut off your arm, accept the loss and exit, and save part of the profit. It is best to use a simple clearance to stop loss, and do not learn to use any reversal stop loss from others. If the general trend has not changed, you will definitely have the opportunity to enter the market again at a favorable time.
Reduce the scale and transaction times of the positions you have built so often, and do not buy high and sell low in a wide sideways trading.
If the trend and counter-trend trading strategies are used properly and can maintain an objective and disciplined attitude, they should greatly improve your overall trading performance.
Regarding fund control: stop loss and stop profit; increase and reduce code; risk and profit
The applicable principles of fund management vary from person to person, rather than "all-purpose", only relatively reasonable or appropriate. Referring to the evaluation method of the fund, the following principles of capital management are summarized in the risk coefficient, volatility, and return expectations, and combined with the author's operating habits and mentality characteristics.
safe entry rule: the process of establishing each part must be adjusted to positive.
The rule of least worry: After the operation, it is better to be relaxed and relaxed.
Minimum regret rule: face the three possible things that are top and bottom.
volatility reduction rule: stable returns and better volatility in equity value.
The rule of moderate development: it is acceptable to balance the benefits and risks.
Of course, investors can also summarize different fund management principles by themselves. Note that the above principles are not "maximizing returns" or "seeking results as soon as possible", but strive for stable development. In addition, the relevant principles include not comparing with others the "net worth growth rate" (the risk is different), and "who is more correct than who is better" (only the main force knows).
The general principle is: 1/3 of the account funds are used for transactions, 1/2 of the account funds are used for rear wing funds, and the remaining funds are held in the form of interest-bearing reserve assets.
Whether it is a retail investor, a fund or a large trading investor, the maximum entry funds cannot exceed 30% of all funds when operating transactions. It is a basic important concept of risk control to maintain unblocking and reverse trading of funds at any time. Let me give you an example. When you use 30% of your funds to go long, once the market reversal, the remaining funds will not only help you unwind, but also take advantage of the victory and shorting. The fund management of
trading is the most important part of the trading process and is the threshold that every trader who wants to succeed must cross. Many traders with great speculative talent have had huge profits in their trading accounts, but they later gave up significantly. What is the reason? That must be improper fund management. Of course, entry and exit technology, stop loss execution, and emotional factors are also the reasons for book losses. However, the biggest problem must be fund management and risk control.
Most people define capital management as the concept of risk control (stop loss). In fact, capital management includes two parts: "position management" and "risk control". In capital management, position management includes the combination of capital varieties, the size of funds used in each transaction, and the amount of additional investment, etc. These factors will ultimately affect your entire trading performance.
In short, money management is the skill of managing your trading funds. Some people call it an art, or science, and in fact it is a combination of the two, in which science holds a leading position. The goal of money management is to accumulate funds by reducing losses in failed transactions and maximizing gains in profitable transactions.When you see the green light on and cross the road, you still have to look left and right to see if there is a crazy driver ignoring the signal of the signal light and rushing towards you. No matter when your trading system gives you a trading signal, fund management is like looking around when crossing the road. The best trading system also requires the protection of fund management to make you continuously profitable.
Fund management points are as follows:
(1) Determine the maximum loss limit for each market, such as 1%-3% of the principal, and the exact number depends on the size of the account. For small accounts, limiting losses to 1% of capital may not be practical. Because the stop loss limit is too tight, the market price fluctuates frequently due to various factors, which may cause you to suffer a series of losses. There is nothing magical about the technology that establishes limits. It just helps strengthen binding and control losses in an objective and systematic way.
(2) Equivalent to the minimum amount of funds for each position. Limiting the risk to a certain proportion and making the affordable risk a certain proportion is a reasonable strategy, especially for trading. The funds for transactions are determined based on each transaction, usually associated with market variability, and indirectly with the risks and profit potential of each market.
(3) 2/3 is left as reserve. Traders should not use more than 1/3 of the capital to use funds for speculative trading accounts as funds for holding positions. 2/3 must be left as reserve, held to live, and act as a buffer layer. If assets in the account fall, you must look for opportunities to reduce your position in order to maintain a recommended 1/3 of the proportion.
(4) Cut off your losses. Whenever you set up a speculative trading position, you must clearly understand where your exit point (stop loss point). Experienced traders, sitting in front of the Internet-connected monitor, have a constraint point in their minds, and close the position immediately when they see that the price reaches the Ping An exit point. They may not really want to issue stop loss instructions on the market, especially when they hold a large number of positions, because this may be a magnet to attract the attention of intraday traders to hit the stop loss price. The key here is constraints. Not placing a stop loss order does not have to be used as an excuse to stay too far in the market, nor does it have to be used as an excuse to delay liquidation at the stop loss point.
Specific fund management allocation (varies from person to person):
1) 100% of funds can be used in bull markets, 60% of funds can be used in volatile markets, 30% of funds can be used in bear markets, and the remaining funds can be used for other purposes.
2) A bull market uses 70% of funds for long-term trading, and 30% of funds roll; a volatile market uses 100% of funds for waves; a bear market uses 30% of funds for short-term trading.
3) Three-point funds short-term method: opens and chases the daily limit, leave one to chase strong stocks within 15 minutes of opening, and leave one to chase strong stocks half an hour before closing.
4) When doing the medium and long term, according to the different risks of the industrial sector, the highest sector will invest no more than 50%, and each industry will hold no more than 2 shares.
5) When doing medium and long-term, according to the hot period, stock quality, and the nature of individual stocks, the funds for a single stock shall not exceed 100% of the industry's investable funds.
6) According to the different entry opportunities, divide the funds into three parts and enter them in batches, at least two parts. And only after making a profit can you add a second fund.
7) When there is little capital and lack of experience, you can only hold 2 shares; but no matter how large the capital is, you will hold 6 shares in three industries at the same time.
8) When you need to continue buying extra stocks, be sure to sell the worst stock first and don’t have any fantasies.
9) When the bear market comes, short positions first and then adjust.
If the position established is contrary to the movement you expect from the beginning, placing the correct stop loss order can allow you to exit within a reasonable loss range.
However, if the market starts to move in a direction that is beneficial to you, it will bring book profits to your account transactions. How should you treat stop loss protection? You naturally want to use some strategy to promote the stop loss price. In the event of a market reversal, the considerable profit on the book will not be converted into huge losses.
The game of speculative market is a game of managing and controlling risks, not a game of pursuing profits
It is estimated that many people disagree with this view, but this is my understanding, which makes me very safe! Focus on stop loss, stop loss is controlled by yourself; do not consider profits, because profits are controlled by the market! In fact, the essence of the capital market is capital redistribution, and the highest level is the competition of mentality.
Most people have to overcome their own level and realize their weaknesses as soon as possible to avoid detours! Stocks are "gambling", and playing is mentality. Be bold when winning and be willing to give up when losing. It’s nothing great to make money in the market, but it’s great to keep orders if you lose money in the market. I am not losing because of profitability, but because I die because I am reluctant to cut when I lose a lot, and I always fantasize that I can survive. Allowing yourself to make mistakes and being able to control your own losses should be the ultimate goal.
It is difficult to defeat yourself. I think it is more realistic to understand my own problems and avoid them. Just do market conditions that you are sure of, and do not have to think so complicatedly. Just be simple and effective. Finding the right method based on one's own characteristics will lead to a long-term life in the market. Discipline and mentality control are more important than technology improvement.
A man is alive and has a promise, and he should make a promise. However, the speculation market is about the skills of giving up, and it is better not to be too persistent. Any time you forget to respect the market, you will make a big mistake. What strategies and tactics are adopted in different market environments are the key to long-term success. Thinking creates people. Think more and think more clearly. Blindly following will kill people.
Any method can ultimately make a profit if it is fixed, it is just a science of scientific control of warehouse volume. If you make mistakes for a long time, you will be right. If you make mistakes for a long time, you will be wrong. If you make mistakes, you will be better than others. If you don’t fight, you will be better than others. If you fight, you will be victorious. You can give up after you have achieved something, but you must never give up after you are setbacks. Because success is the last minute visitor. (It is especially important for those who are big-trend)
All about financial transactions------------------------------------------------------------------------------------------------------ Use "dispersed" and "lasting" methods to gain a probabilistic advantage in the speculative market for a long time, rather than betting on everything. Since you are trending, you should not change to short-term trading often, because the angles and methods of trends and short-term trading are different. It is also difficult to continue to improve the operation method to a certain extent, because there is a probability of error in any case.
Never put yourself in a dangerous situation and never take excessive risks. As long as you determine the risks you can afford before entering the market, it is a good deal in principle. "Plan your transactions, trade your plan" is an easy sentence, but whether you can "trade your plan" is the most critical point and the most difficult to execute.
Therefore, for trading, what is important is not whether you look right or wrong, what is important is how much you make when you look right, and how much you lose when you look wrong.
Peter Lin District once said that if I could find a line chart that predicts a rise, I could find more of the same line charts, but his development was in the opposite direction. Line diagrams are just auxiliary tools, not all. To be honest, if the line chart is all, then the stock will not be fun at all. Just put it in the formula, right? The line chart is the accumulation of the psychological status, capital status, etc. of human transactions of the commodity. But what is revealed is the price, trading volume, k-line, and various pointers, and in this information, there are only two that determine your actions... Buy or sell.
The right side of the line chart is the most charming; the left side of the line chart is the clearest. The conditions for stocks that will rise are the same, but stocks with the same conditions may not necessarily rise. Between buying and selling, you need some strength to look at the picture, and between buying and selling, you also need some luck.
Someone said, if you catch every wave correctly, what fun is there to stocks? What a strange sentence, do we want to do the right direction in every wave? Isn’t it just a turning point where you can buy low and sell high? What's wrong with catching every wave? Isn’t it a great pleasure in life?
Actually, if you think about it seriously, this sentence is not wrong. Because we are humans and not gods, it is impossible to catch every point correctly. It is already very good to hit seven or eight times out of ten times! If the waves are correct, including the points, then you will be a super rich man long ago, and there is really nothing fun in the stock market. Because it's all in your palm, why are you playing?
is right, please be happy, read it wrong, and review it. Between right and wrong, how can you make more profits when you are right and lose less when you are wrong, and at the end of the year, you have a little more surplus, which is right. If you can make a surplus every year, isn’t that right?
retracement is a good thing, not a bad thing. Let profitable people go and give empty-handed people the opportunity to buy it. Isn’t it a joy? Isn’t it normal to back-test the neckline with too high? Are you ready to take over? The acceptance point has not arrived yet, please wait patiently. This is the time to be more enduring.
can earn and defend, and the winner is the winner. A wave of rise will create many winners, but a 500-point pullback will turn many winners into losers. What is the difference? The real winner knows to run, and the fake winner will only enjoy the profit on the books, just be happy.
Finally, very few investors can think rationally and master the correct thinking methodology. But to be able to make continuous profits, there must be more things than the way of thinking. Pay attention to high-probability events, while preventing the large risks caused by low-probability events.
A set of scientific and technological analysis methods has a profound theoretical foundation and philosophical background. Only by finding the source of this set of technical analysis can we grasp this set of technology in essence, see its overall picture, understand its strengths and dead points, so that we can be able to be able to handle it in specific applications, improve our chances of winning, and continuously enrich and develop this set of technology.
