For example, cut off losses and let profits run. I fear when others are greedy, I am greedy when others are afraid, and so on.
But there are two sentences that many people have misunderstood.
These two sentences are: I would rather miss than do wrong and I would rather do wrong than miss.
Think about it. What do you think these two sentences mean and which one is correct?
Some people say that these two sentences are opposite and can only be chosen. Others say that these two sentences apply to different methods.
But in fact, not only are they not antagonistic, they are talking about the same thing.
I'd rather miss it than do something wrong.
Many investors in futures stocks love this sentence. Every time they read it, some corresponding artistic concepts emerge in their hearts, such as calmness, accuracy, hitting the target with one blow, not making empty words, being motionless, and being earth-shattering when they were born. Then look at your heart, encourage yourself to keep learning, strive to improve your analytical and research capabilities, reach the peak as soon as possible, and become a generation of masters.
China's writing is extensive and profound, and many people misunderstand this sentence.
Missed is better than missed, missed is missed the market, missed the profit machine. There is basically no doubt about this.
But what if I do something wrong?
Many people understand that making a mistake is making a list in the wrong direction. If so, then the meaning of this sentence becomes that I would rather miss the market than make a mistake in the list.
This understanding fell into the sinkhole.
Because no one can accurately predict the market. Want to grasp the trend, not by accurate judgment, nor by perfect prediction. It depends on taking risks and trying to get benefits. In other words, any transaction is risky and the list can't be good.
If you understand it this way, you will basically get lost in the fantasy of pursuing a perfect transaction.
In fact, it is better to miss than to make a mistake, that is, the trader does not run the transaction according to his own trading logic. In other words, traders are defeated by greed and fear, leading to out-of-control trading.
For example, someone's trading rule is to stop trading if he loses 1% of the funds, but at some point, he continues trading with red eyes when he loses more than 10%.
Maybe this time he can really fight back and make a profit, but this kind of profit will bring wrong feedback. Let him doubt his trading rules, and his 1% stop loss rule will lose its meaning. So this kind of profit would rather be missed.
In other words, the real meaning of this sentence is,
Traders must run transactions according to their own logical consistency. Trading behavior that does not conform to the trading system should not appear. Even if the wrong action finally brings benefits, we should maintain the trading rules and give up.
Transactions outside the rules should never appear.
Doing something wrong is better than missing it.
Many people scoff at this sentence.
Some people say that if you place an order at the right time, you will miss it if you miss it. Opportunities come every day. Since you believe in your ability, are you still worried about making a profit sooner or later?
Others say that only by making a decision can we win every battle. This sentence is gambling.
The person who said this may still be in the trap of the first sentence. Their main direction is the accuracy of prediction and the pursuit of absolute winning rate. They may not know that the essence of trading is trial and error.
This sentence is easy to understand. I'd rather make a mistake and lose money, because I don't want to miss the big market. This is the core idea of many system traders.
This sentence has many implications. The most important thing is to admit that you can't predict the market and the future is uncertain. The essence of trading is a process of trial and error, and the source of profit depends on one of the few big fluctuations in the corresponding cycle. If you don't trade because you are afraid of losing money, you will eventually miss the market where you can make huge profits, and your profit expectations will be greatly reduced. On the contrary, we constantly try and make mistakes, control the cost of each trial and error, and control it within the scope of risk control until the waiting big market appears.
In other words, the core point of this sentence is to admit that it is not the winning rate that determines the final profit and loss result, but the winning rate * profit and loss ratio. Those who agree with this sentence basically give up blindly improving the winning rate and focus on obtaining a stable winning rate * profit-loss ratio, which is the key to sustained and stable profitability.
Having said that, we will find that two seemingly diametrically opposite sentences, which I would rather miss, do not do wrong and I would rather do wrong, do not conflict. They are actually two aspects of a set of trading rules:
The first sentence is about transactions outside the rules. Is this right or wrong? The second sentence is about trading within any rules. Wrong is right, because the essence of trading is logical trial and error.
I like these two sentences very much.
I love the patience that I would rather miss than do something wrong, the awe of the unknown outside the rules, and the open-mindedness that I can't control the future. I also like the decisive decision that I would rather make a mistake than miss it. I am fearless within the rules, determined to face all setbacks and difficulties, and domineering to go forward in the face of all difficulties.
These are the varieties and spirits that a qualified trader should possess.
Simple two words, hidden endless meaning, in the world of trading, cognition is an absolute gap.