July 18, 2015

Trade simply and live your life in the stock market

The following article talks about very, very old ideas, but now it seems that there is a new feeling, every word is fine, every sentence is crying blood.

1. Don't try to predict the market. Don't bet on tomorrow. Instead, focus on trading plans and simple trading.

2. If you pursue an accurate buying point, you will lose the opportunity to do the band. (This was fully exposed in my Thursday and Friday trades, where the pursuit of precise buying points led me to buy at a higher price.) Often, the pursuit of a few cents will cost a few more dollars. ）

3. Strictly implement the established trading plan and eliminate random decisions.

Full text reprinted "If you want to be a stock god, you only need to do two things repeatedly"

A true trader who cares about only two things:

1. What should I do if the trend proves that I am right after I buy?

2. What should I do if the trend proves that I am wrong after I buy?

No one can predict the future with precision, and the only thing you can use is consistent trading rules, which put you on the side of the big numbers in this game of probability.

Profit is not obtained by the winning rate of your prediction of the market, but by "you lose as little as possible when you make a mistake, and you earn as much as possible when you do it right", which is the biggest difference between a practitioner and an analyst.

The purpose of your purchase is not to lose money, but to make a profit and make as much profit as possible:

When the trend is in your favor, you must be greedy and let the profits run; When the trend moves against you, stop fantasizing and truncate losses.

When will the direction of the market be clear? It's not clear at any time! The market at any time is to gamble with their own chips, although many friends never think that they are gambling, that is just that the probability is high, not a gamble.

In fact, no one knows what tomorrow will go, trading is to place bets, to bet on uncertain profits at a definite price, but to stay away when the fatal risk comes; When the risks are manageable, the future is worth seeing.

Most of my trading is "plan my trade, trade my plan": after the market to see the trend according to the rules to determine what to do, during the trading hours just to trade according to the rules.

If you want to think about where to buy or sell during the volatility of trading hours, I believe that many times, I agree that it will also be overwhelming.

I never think that the specific point of buying occupies much of a role in the transaction, only the pursuit of low-profit buy orders to pursue the specific purchase point, non-pursuit of low-profit band transactions pay too much attention to the specific purchase point, will outweigh the loss, will lose more opportunities and profits.

The specific point of buying will not be the focus of my trading, I look at the trend of the day and before after the market every day, judge a direction with experience, find a price area that I think is suitable, and then buy and hold.

I don't spend a lot of time researching how many dimes the price will stop, but I have many friends who emphasize how important it is to have a specific buy point in their trades.

If the precise buying point occupies a very critical position in your trading, if you are not pursuing the operation of the low-profit band, then it can only mean that you do not know what the trading strategy is, and you do not even understand how the market trend is generated, let alone what you want to operate.

Someone on Wall Street once did an experiment to take out a few charts and then asked a few elementary school students and a few people who had been trading for several years to choose the direction behind, and the result was that the winning rate of primary school students was overwhelmingly higher than that of those who had been trading for several years.

If you want to be a stock god, you only need to do two things repeatedly

The reason why you attach so much importance to the precise buying point is nothing more than these reasons:

1. You always want to buy at the lowest point, and you will make a profit when you buy, and you can't bear the normal pullback of prices;

2. You think that the stop loss is a disaster, so you always set the stop loss very small.

It's just that you ignore that the importance of buying in an area, a little higher or a little lower, is far less important than not being able to buy more. However, how many people miss the opportunity in the face of a high probability of rising in order to pursue a precise price.

The most idiotic person in the world is the kind of person who thinks he has discovered the truth that others can't discover, and I never expect to buy at the lowest point and sell at the highest point.

One of the keys to the reason why many people are unable to increase their capital as a whole is that they cannot afford the drawdown of floating profits, which are not your profits at all, and no one wants them to draw back.

Losing some profits because of the drawdown, but also grasping a bigger profit because of the drawdown, is an integral part of the trend, and I am used to it in my trading.

The amount of loss is controllable, and the profit needs the support of the market. I don't buy or sell on my own, I let the actual trend decide whether to buy or sell, I don't let myself be passive at any time, and I never strive for the perfect trade.

No matter what rules you use as a trading model, you should consider one point, that is, whether this rule strategy can achieve the growth of capital equity in a relatively long cycle, rather than taking the chance of an isolated few trading days or a transaction as the basis for your trading!

I will not adjust my trading rules for a specific market, the only way is to stick to my own rules, no matter how the market goes, keep my own bottom line, and maintain the consistency of trading rules, not all markets should be profitable under your trading rules, which you must understand and accept.

The so-called consistency means that you do it according to your own rules at all times: the market and the outside world do not interfere with you, unless there is a large loss within the rules. In hindsight, the definition of consistency is that as long as you stick to your own and are not swayed by the momentary confusion of others and the market, the market will be rewarded sooner or later.

When I couldn't do "go up and down without being surprised, watching the flowers bloom and fall before the market", a senior who did a good job in trading once told me that at any time, as long as you don't let the funds fall sharply, while maintaining profits at your own pace, even if it is very slow, the market will reward you sooner or later. Now I think so, and I don't know that this reward is more than once.

A mature trader will not think that there is a unique secret to trading, even the most profitable trading strategy has long been public, rotten street, the ability to resist the temptation of all the time and stick to their beliefs, is the only difference between a winner and a loser, there is no other secret.

I have had many friends who told me about all kinds of difficulties and wanted to make some profits through trading. I told her all about my trading strategy, she knew where I was buying and was there to buy, my trading was completely transparent to her, but over time our trading results were very different.

Because she is always tempted to lose herself in the ubiquitous market, she can't stand the fluctuations, she is either worried that she can't buy it and buys it early, or she wants to buy it at a lower price and doesn't buy it, she is not worried about selling late and selling early, or she has too many illusions and sells late.

That's trading, don't always think that people who make money have some unique cheats to count money behind closed doors. This market has been around for hundreds of years, and any way to make a profit that works or isn't feasible has been thoroughly studied for a long time, and you can no longer find even the slightest bit of something that no one has explored before, so don't think that you have made any new discoveries, it's more of a self-woven trap.

If I say that the risk of the stock market is higher than the risk of the futures market, there must be people who say that the risk of the futures market is higher than the risk of the stock market. If I say that the risk of the stock market is not as high as the risk of the futures market, there must be people who say that the risk of the futures market is higher than the risk of the stock market.

Volatility comes from the market, but risk does not come from the market, but from your trading, from whether you control the risk or not. In a market with low risk, if you don't control the risk, the risk will be infinitely magnified.

In a market with high risk, knowing how to control risks will greatly reduce risks. If you can't control the market, you can't control your own trading, and there is nothing more risky than your hand.

Whether it is a strategy or a plan, once it is implemented, it must be strictly implemented, because you are relatively objective only when you formulate a strategy outside the market, and once you are in the field, you lose your rational judgment, and the only way at this time is to implement the established strategy.

Make random decisions in the market every day, then all your previous costs and trading experience can not help you, at this time a veteran and a newcomer who has just entered the market is no different, it is blind and lucky.

Let's make trading simpler, there are too many factors that affect the market. No one knows which factor will play a role, and following the market is to chase the wind and catch the shadows, which is to be speculated by stocks. Make your trading simpler and trade in your own way, this is stock trading, this is life!