The starting point is risk. Logic is falsification. Reason is the boundary. Black swans are great opportunities. Go against human nature, follow nature.
To talk about the core of transaction, we must first understand what transaction is. At first, it was to exchange things for things. Later, after the emergence of currency, it was to exchange currency for resources that the other party does not have. This behavior is called transaction.
Traders have been around since ancient times when people had a little surplus except what they needed to survive. Take the extra stuff from your tribe and exchange it for the stuff you don’t have. Slowly developed into commercial activities.
As a trader, that is, a businessman, you purchase goods at low prices and sell them to those in need at high prices. Profit is generated in the process.
If the purchased goods are not scarce enough, and the rich Zhao family, the Sun family, the Li family also have them, the price of the goods will not rise, and may fall to the bottom as the Zhao family sells off a lot. . At this time, either these goods are in hand, or they are thrown away with the Zhao family. This is called cutting meat.
The core of the core is to find high-quality, low-price and high-demand goods to sell to others. I wanted to give up on trading 101 times, and now I am one of the 1%!
Crude oil and gold have all stopped taking profits this week. Regardless of luck or strength, there is no point in bragging about these now. Those who are interested in trading ideas can read this week’s article.
Last night, many readers asked me in private messages, why can I predict the turning point? What does my trading system look like? What about trading frequency, stop-profit and stop-loss rules, etc.? No problem, I will open a post to answer this question this weekend!
Huihai Wuya asked: How does Mr. Jin view stop loss, and how do you control risks?
Answer: I have always believed in the saying "There are always opportunities, and the capital is just that." So far, I can control my emotions, which is also the prerequisite for risk control!
On the one hand, I am the kind of person who never sees the rabbit but does not let the eagle fly. Once I see a direction, I will wait for the best node to operate. In this way, I will try my best to I guarantee that my floating losses will be very small. On the other hand, I never increase my position when I am losing money! In this way, when I lose money, I will always lose money in proportion to the trial position, so I can ensure the safety of my principal.
Regarding take-profit and stop-loss, when opening a position, I will choose a position closer to the stop-loss, follow the general trend and go against the small trend. For example, in the face of a volatile market, when I am close to the box Prioritize long when the lower edge of the box, and sell short when the upper edge of the box. Trade according to the layout of the trading system, rather than following market sentiment!
Bailu asked empty-handed: What is the most likely reason that affects our (traders) losses?
Answer: I have seen that up to 90% of the losers have these factors
Dong Dong Qiang asked: What is the trading system like? How will trading frequency be maintained?
Answer: I currently only trade hourly bands, 3 main varieties, 22 trading days per month, and the average trading frequency is about 25 times. This trading frequency is just right for me. Trading doesn’t take up too much time. I have enough time to take care of the company’s affairs, and I still have time to write some articles every day. It’s just right for me.
As for the perfect trading system? Doesn't exist! There is no need to worry, just like you can never buy a perfect car or marry a perfectly satisfactory wife.
Constantly compromise, weigh, and give up in many aspects such as profit-loss ratio, success rate, transaction frequency, profitability rate, capital withdrawal ratio, working hours, etc. to find the most reasonable and suitable one, that is, the "maximum of happiness”.
Some people like to take heavy positions, and they can control the rhythm, frequency, high risk and high reward. This is right!
Some people like to take short positions, follow the trend, have a slow pace, low frequency, low risk and low return, which is also correct!
Expectation difference! ! !
It’s the price difference.
Win-win
Lao Luo believes that the core essence of trading is the control of positions, the grasp of opportunities, and the vigilance of risks
If you trade a check and directly enter the full position, I think this is not a transaction, but a gamble. There are many factors that affect the stock market. The market is changing all the time. You never know what news will come out in the next minute. Whether it is good or bad.
It is a good thing if the bet is good, you made the right bet, but if the bet is bad, you will be deeply trapped, and you will have to wait for the unwinding, but if you do Position control, even if there is a negative decline, because you have controlled the position, you can reduce costs or make price differences through the remaining positions.
Being alert to risks can also be said to be a part of position control. There are no stocks in the market that only rise but never fall, and there are no stocks that only fall but never rise. There are rules, but you have to know that risks come from rising prices and opportunities come from falling prices. How to detect risks in advance and take profit when there is a big rise, and how to boldly buy low when there is a panic and a fall.
Position control, buying and selling, these are the essence of trading. As long as you can grasp and grasp them well, you will be a winner in the stock market.
The core essence of trading has three dimensions: 1. Build a trading system that is suitable for you and that you will win if you gamble for a long time.
The trading system must first adapt to oneself. From the perspective of the trader’s identity, professional trading is different from amateur trading, large-capital trading is different from small and medium-sized retail trading, and trading to support a family is different from trading to make a living. , young traders are different from old traders; from the perspective of personal qualities, traders’ personalities, tastes, IQs, EQs, adversity quotients, and psychological reshaping abilities are all very different. It should be noted that a trading system that is suitable for others may not be suitable for you. Just like one person's tonic may be another person's "poison".
Secondly, the trading system must be a long-term bet to win. The trading market ≠ casino, but because people's cognitive abilities are indeed limited, and the trading market changes rapidly, every transaction is essentially a bet on a high-probability event. A player who bets with a high probability of winning over a long period of time is a successful player. The trading system does not have to be complicated, but the number of successes must be much greater than the number of failures, and the success rate must reach at least two-thirds, that is, more than 66.67%. Or ask: How can we know the future accuracy of the trading system in advance? The answer is: let history tell the future. Commonly used free securities software such as Tongdaxin and Great Wisdom all have the function of testing the historical success rate of the trading system. Substitute your trading system (ordinary people should not make it too complicated, except for computer experts) into the software's evaluation system and conduct a long historical period ( It is recommended that the success rate test should span at least a ten-year period) and the success rate should be > two-thirds or 66.67%; single profit > single loss; no major losses should occur. 2. Control your inner demons and resolutely implement the trading system.
To believe in the trading system, trading is to devote oneself to the trading belief without regrets, just like the sentence in the oath of joining the party: "Be ready to sacrifice everything for the party and the people at any time, and never betray the party." Be willing to accept the inherent flaws of the trading system, and calmly regard the reasonable losses caused by the trading system as part of the transaction; all transactions must be based on research and judgment to set positions and increase or decrease positions in advance, and set stop losses and take profits in advance; it is best to use There are cloud stop-loss and take-profit trading software, and trading software with cloud conditional orders. The advantage is that even if you turn off your mobile phone and computer, as long as your trading instructions are placed on the cloud, you can still buy and sell at the price you specify. It is particularly emphasized here that loss is the final test of confidence in the trading system. When a loss occurs, as long as the loss does not cross the boundary, do not deny the hard-earned trading system. 3. Improve the trading system in a timely manner.
Bolivar, the liberator of South America, has a famous saying: The road to success lies in continuous improvement. By practicing the trading system, combined with reading, thinking, and reflection, we can indeed find good methods and completely revise the trading system. The improved trading system must also be rigorously tested in advance, and the test result requirements can only be increased, not lowered. Or: You sometimes emphasize belief in the trading system, and sometimes emphasize improving the trading system. Isn't this self-contradictory? The answer: It is not contradictory at all. In order to understand this problem, I attach here the "Tolide's Theorem" by the French social psychologist H.M. Tolide: To test whether a person's intelligence is superior, it only depends on whether the mind can accommodate two opposite thoughts at the same time. It does not hinder his conduct. Nobuo! In short, a trading system that is thought to be reasonable + practicing the trading system with faith + timely improvement of the trading system = the core essence of trading. But the core essence of trading is not only in the article, but also in the minds of investors and in the actual actions of traders. If readers have any opinions, please feel free to write them in the comment column in the lower left corner. I hope your comments will inspire me and everyone more.
The core essence of trading is to strictly implement operating discipline!
The essence of trading is a process of interaction between people and the market. Changes in market prices will affect people's decisions and behaviors. Human behavior will in turn affect market prices.
Market prices have a clear direction in the long run. But in a short period of time, it manifests itself as fluctuating disorder.
There are three forces affecting people's decisions and behaviors. They are greed, fear and reason respectively. Greed and fear each have their rationality and shortcomings. Without greed, people have no enterprising spirit. Only greed will only chase the rise and kill the fall. If there is no fear, one will not know how to avoid danger. If there is only fear, one will be timid and dare not do anything.
The significance of strategy is to use reason to guide our trading behavior and decision-making. Don't be swayed by greed and fear.
The position of the top and bottom cannot be clearly known. Trying to buy the bottom or top is usually ineffective. The correct approach is to lay out the top and bottom areas in a stepped manner. Let the extreme prices fall within our layout area. This completes our action of opening a position.
The above operation takes advantage of this feature of long-term direction clarity.
So how to take advantage of the disorder of short-term price fluctuations? That's the scrolling operation. When the price falls when we are long, we increase our position and go long. When the price rises, we take profit and exit. When the price falls again, we add to the position. When the price rises, we will take profit again and repeat this operation.