What do you think is the most important thing in trading?

This is an old-fashioned question, and I summarize it as follows from the perspective of a professional trader. The core elements of successful trading are: follow the trend, stop loss, rules, and execution.

Here, I would like to clarify one point in particular, that is, many people attribute their trading failures to bad mentality. I think such a statement is far-fetched. Let me ask, if a trader does not have a clear trading philosophy and strategy, does not know when to stop profit or stop loss, and does not set some trading rules for himself to strictly enforce, then can he achieve sustained profitability? Can his mentality be good? ? In other words, a bad mentality is an appearance, an external manifestation, not the root cause, and a "result" rather than a "cause".

If a trader effectively solves the four core elements of successful trading, namely, following the trend, stop loss, rules, and execution, and supplements it with active and appropriate self-adjustment, over time, his mentality will gradually calm down, and he will not be overjoyed. Don't be sad by falling, not anxious by adjustment.

One, take advantage of the trend

The first of the twelve Wall Street family mottos is stop loss, and I used to think so. But now, I think the first should give way to the trend. If you don't follow the trend, your operation will inevitably encounter many stop losses. Therefore, taking advantage of the trend is the most important element among the four elements of trading.

Follow the trend, four simple words, every trader knows, and can even say a lot of truths. But how much do you really understand? Judging from the reality that most people lose money, there are very few people who really understand.

For myself, that is, at some point earlier this year, my understanding of the trend suddenly became much clearer. For such a long time before, my understanding of the trend was vague and vacillating.

Traders must have their own judgment on the trend. Only on this basis can you follow the trend.

Two, Stop loss, no matter how important its importance is, cannot be overstated. That is to say, even the wrong stop loss is right. Stop loss, this word sounds very uncomfortable, but if you hate this term very much, then your investment behavior has already planted a major hidden danger, just like a time bomb, which will destroy your investment career sooner or later .

For an investor, stop loss is an important part of a series of trading procedures, without any emotional color, although a strong man loses his arm, it is very natural. If you are not good at stop loss, one big loss is enough to lose the previous 99 profits. Therefore, only by strictly implementing stop loss can you survive in the capital market for a long time.

In trading, unwillingness or poor stop loss may lead to fatal consequences. Even if it is a clear bullish trend, a strong pullback on the way is enough to blow up the account due to the leverage effect.

It should be pointed out that stop loss is scientific, and should not be stopped at will, and "unnecessary" stop loss operations should be reduced as much as possible. After all, stop loss will lead to direct financial loss. Finally, I want to emphasize that stop loss is by no means the goal. The ultimate goal of trading is: no need to stop loss.

3. Rules

Many traders, as soon as they enter the capital market, cannot restrain the urge to trade and trade frequently. Why? One of the factors is that traders have too much control over their accounts, and transactions are too easy to complete with the click of a mouse. Think about real-world transactions or business dealings, which are restricted by many external factors, and you will think twice, but transactions in the capital market can be completed in a flash.

The excessive liberalization of transactions and the emotional characteristics of human nature are the root causes of many people's transaction failures. So, how to solve this problem? Only by formulating rules, only by establishing a binding transaction mechanism. Without constraints, it is possible to operate indiscriminately, "There is no rule without rules." The first effect of establishing rules is to reduce the risk of loss caused by frequent trading or emotional trading.

A trader can have several trading systems to deal with different market situations. But there is a premise, that is: the trading system must have been verified by the market for a long time, has a probability advantage, and traders have sufficient confidence in the system. Now, I have my own trading system and strategy concept. I am a quasi-systematic trader who integrates disk experience, and swing trader based on the daily trend.

Now, I have largely dismissed the idea of ​​forecasting. Because, I found that I just need to act according to the rules. If the market trend meets my conditions, I will enter or hold, otherwise, I will wait and see or stop the loss and get out. It's that simple, I don't need to bother subjectively to predict how the market may go.

4. Execution

Undoubtedly, once the rules are formulated, they must be strictly enforced, otherwise, they are just empty talk, and the rules lose their meaning of existence. Strictly implementing the rules set by myself and being completely self-disciplined is a difficult part. In the early days of my entry into the stock market, I was lost in frequent transactions, resulting in capital losses. There are also many friends around me who have or still lack sufficient self-discipline , and was troubled by it. In the capital market, the difficulty of implementation lies in relying on complete self-discipline and self-discipline. Because human beings are a combination of rationality and irrationality, the irrational side always tries to destroy our rational thinking consciously or unconsciously.

But we must overcome this hurdle and achieve strict self-discipline, otherwise, we will never be able to enter the ranks of successful people. And this process involves self-cultivation, requires the accumulation of time, and requires continuous self-psychological strengthening. "Cut off losses and let profits run!" is a famous Wall Street saying, which is familiar to everyone, and it is also the pursuit of every trader. But in actual trading activities, many people are: "Run when you earn, and defend when you lose." The reason is that they have not established a complete concept of following the trend, stop loss, rules, and execution.

To sum up, without knowing the trend judgment, it is impossible to follow the trend, and trading against the trend will inevitably encounter frequent and unnecessary stop losses.

If you don't stop loss well, you may get stuck, the stock market will suffer big losses when it encounters a big bear, and the futures market may lead to liquidation.

Without rules and without establishing a constrained trading mechanism, it is possible to trade emotionally, chase ups and downs impulsively frequently, and losses are inevitable.

With rules, but no execution, everything is equal to zero.

Only by following the trend, stop loss, rules, and execution, can we gradually move closer to the highest level of investment --- doing nothing and selflessness!

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