Let the profits run! All the reasons for losing money can be found in this article

As I said in my last analysis, some of this has already been written into the script. Just like in 2013, after the surge, the central bank intervened, and the cycle continued again and again. Now that we have made the right judgment, let the profits run!

Today I share two articles with you, where everyone can find the reason why they lose money. These two articles are collected by Laobi in the early years. I regard them as internal skills. I share them with you today, and you are also welcome to reprint and share.

Self-control is the most difficult skill in trading

1. Why 95% of cryptocurrency traders are defeated by the market

Most people who follow the trend die in the shock (talking about the trend means talking about the operation level. Levels less than 5 minutes are more likely to die in the shock, because when the market fluctuates slightly, price changes often dance around the operation boundary line, causing continuous stop losses, frequent operations, and heavy losses!!! Therefore, the operation level should be appropriately larger, that is, the stop loss range should be appropriately expanded, but not too large. It does not mean that operations cannot be performed at levels less than 5 minutes, so I will not go into details here)

Most people who do consolidation die in the trend (I won’t go into details about this method of operation, it doesn’t have any common sense at all!)

Most people who do short-term trading die in a violent rally (most people who do short-term trading have no concept of trend or have a bad mentality. In fact, everything starts from the present, that is, the medium and long-term also starts from the short-term. The key is that you must be mentally prepared to "do short-term and look at the long-term". Once the short-term goes well, don't give up the opportunity to let the profit run for a little bit of profit in front of you. This is the reason why most people who do short-term trading die. When they make a profit, it is only a little, but the accumulated losses are not small)

Most people who don’t have a method die from reckless operations (this is inevitable! Reckless operations are the most fundamental cause of losses. As I said before, it includes reckless operations in entering and exiting the market and reckless operations in the size of positions.)

Most people who have methods fail in execution (this is an absolute truth! It doesn’t mean that you can make a profit if you have a method. I already had a method, but I still lost more than I gained. The problem lies in the failure to strictly execute. The failure to strictly execute is because I don’t understand the dialectical relationship between giving up and gaining. When there is a small profit, I don’t follow the rules and take the profit when the market retreats. In this way, having rules is equal to having no rules! There is also a situation where the original deep-rooted wrong concept cannot be gotten rid of. No matter how reasonable the method is, it is equal to having no method. In short, if you have a method but don’t execute it, you will still operate randomly!)

Most people who rely on subjectivity die in their feelings (this principle is very clear, the market is objective, if the subjective conforms to the objective, there will be profit, otherwise, there will be loss. Loss is normal, as long as the error is corrected in time. But many subjective people will never admit their mistakes! If such people don’t lose money, who will lose money?)

Most people who rely on news die in the news (no need to comment on this.)

The one who is not killed is the winner.

Trading is a learning school, and its most popular major is behavioral science! ! (To be precise, it is psychological behavioral science. Any behavior is dominated by psychology.)

2. Why is it so difficult to go with the flow?

The first reason is that you don’t believe in the trend. The trend is not non-existent, but you just don’t believe in it. (There are objective reasons for not believing. Most people have not studied psychology, so they don’t know the concept of psychological set. As long as a person is normal, his psychological changes are rhythmic and regular. This is the set. He will not be immersed in happiness at the moment, and then be in extreme grief a few minutes later, unless there is an emergency. I have always said that the stock market is essentially controlled by people’s emotions, and people’s emotions will last for a period of time, which is reflected in the stock market as different levels of trends. Do you understand?)

The second reason is that you always think about the callback, are afraid of the callback, and don’t know how to deal with it. (Not only the currency market, but the running track of any thing is wavy rather than linear, so the callback is normal. The question you need to consider is how much callback is unacceptable. You can’t use subjective standards to determine the acceptable range of callbacks here. Education in society is mostly determined by subjective standards, so you will hear various different voices, such as 5%, 10%, 20% or 38.2% of the golden section, etc. I personally think they are all wrong. This standard reflects people’s subjectivity and analysis. It doesn’t mean that this subjectivity and analysis will be wrong every time. There must be a right time. The key is that the amplitude of the callback determined by this method does not reflect objective facts, and as a result, sometimes the opportunity to let profits run is lost.

In principle, one cannot let profits run away. In the stock market, the final result is basically a big loss and a small gain. The idea I want to give everyone is that operations should be consistent. When you master this method, I don't look at your operations. As long as you strictly implement them, I will know where you entered or left the market today by looking at the market. For example, the 20-line is the operation line. Isn't it simple? I saw that the price stood above the 20-line at 9:59 today, and I knew that you entered and went long here. At 14:23, the price fell below the 20-line, and I also knew that you turned from long to short here. In this way, do you still need to worry about callbacks? )

The third reason is that you don’t have a set of rules to follow (there is no need to say more if you don’t have rules, you will definitely die!)

The principle of successful Bitcoin speculation is based on the following assumptions:

People will repeat in the future the same mistakes they made in the past (not repeating past mistakes, but rather repeating past psychological processes).

The few who are successful in Bitcoin trading are repeating the right approach (i.e., following the rules).

Losers repeat the same mistakes (and keep doing it randomly.)

The market exists by the mistakes of most people (this is the essence of the market.)

If there is one person who can beat the market, the market will no longer exist. (Someone can still beat the market, but we cannot enter the market with the subjective intention of beating the market. This intention will lead to wishful thinking and we will not have a plan to deal with changes in the market. Many people die miserably because they are stubborn and think that they will succeed as long as they are optimistic and confident!)

The essence of following the trend is to follow (yes, it’s a very simple truth. But it’s not easy to do it!) To follow the trend, you have to wait for the trend to be clear, and don’t go ahead of the trend; (The key is how to confirm that the trend is clear! Everyone’s operation level is different, and the direction of the trend is different. For example, a small-level downward trend is an upward trend at a larger level. Therefore, you must first determine your own operation level, then determine your own operation boundary line, and then confirm the trend according to the rules. Otherwise, it is just empty talk about following the trend.)

Taking action in advance is not to follow the trend, but to make the market go according to your imagination (with rules, the rules are the standard for your actions.)

Normal thinking, normal emotions, and normal habits are all impossible to succeed in the market (the correct concepts in life are basically wrong in the currency market.)

The success of a few people must be extraordinary (I personally think that the so-called extraordinary is understanding and character. Most people can never reach this level no matter how hard they try. The level can only be understood. Character is innate. But ordinary people can learn what to do and what not to do, so as to strive to make fewer mistakes in transactions and do more right things to achieve the change from big losses to small losses, from small losses to no losses and then to profits. Although you can't reach the level of a Buddha who has achieved great enlightenment, you can also become a master among people.) There must be something different, different thinking, methods, and habits.

The more brutally the discipline is enforced, the higher the possibility of success. Those who do not follow the underlying rules and do not have a strong sense of discipline will undoubtedly be eliminated!

3. Reasons why investors lose money

The root cause: There is no correct trading concept, no trading system suitable for oneself, no execution of trading plan, relying on prediction and imagination to trade, usually closing the position when making a little profit, and not stopping loss when losing. Making small profits and big losses violate the fundamental principle of success. (Absolutely correct!) Investors often have little funds and large positions; they are eager to make money, and the more frequently they enter the market, the harder it is to make money. (Large positions are not the real reason for losses, the key is that the size of each position is different.)

Taking big risks to grab small profits is destined to embark on the road of loss (it is not true that there is no big risk or small profit. At the beginning, intervention means being in risk. Whether the risk is big or small depends on a person's own trading rules. With trading rules and strict implementation, how can the risk be big? If the rules are not implemented, a small loss will become an unmanageable big risk, which is caused by oneself, not the market. As for whether it is a small profit or a big profit, it is unknown at the beginning. If you know it, you will be a god. Many friends told me that when the market is not big, don't do it, just do a few big markets. Haha, this is also my wish, but the problem is that at the starting point of each market, who can know how far this market can go? No one. People always say this based on the results they have walked out. This is called hindsight. Therefore, whenever the market reaches the position where the trading system should intervene, you must take action and be prepared to correct errors.)

Pursuing perfection, thinking of yourself as a god, always wanting to grab the top or the bottom, that is impossible. It is enough to catch a part of the trend. (Greed will eventually lead to losses)

Many investors trade with feelings and emotions, rather than with their brains or trading systems. (Trade with your eyes, not your brain.) If you trade with a full position, even a very small fluctuation may result in a huge loss. The psychological pressure is so great that you cannot stop the loss, and eventually you are forced to liquidate your position. (You can never trade with a full position. But you can trade with a heavy position of 50-80%. Regardless of profit or loss, the position should be consistent every time. Leave the psychological pressure to the trading system with a high probability of profit. Otherwise, people will always be in worry and fear.)

There are only a few big opportunities in a year, and the main fluctuations in a day are completed within a dozen minutes. Too much trading is a risk in itself. There is nothing new in Bitcoin trading! The rules of the game have not changed; human nature has not changed. (Yes)

Life is never a straight line. Every adult knows this. Yet, we are all too easily led to forget this when looking at a chart. (Correct!) Beware of the illusion created by the chart maker. The trend of the chart is more of a curved trend!

Be tolerant to the market, and the market will be tolerant to us! Excessive pursuit of investment opportunities and price perfection will only bring us unexpected losses. (Very correct! Leave some fish heads and fish tails for the market!)

The only thing that can take care of you in the currency market is the trend. If the trend doesn't take care of you anymore, it means you are wrong or the trend has changed.

The most hateful thing is volatility. Volatility is a liar, always making you unable to see the trend and the change of trend. (The most lovely thing is volatility! Without price changes, how can we have the opportunity to make money? The problem is the relationship between the size of the volatility and the level of your operation. If the volatility is large enough relative to your operation level, you can make a profit, otherwise you will lose money. After writing this, everyone can understand that this author has considerable skills and most of his ideas are correct, but there are still some misunderstandings. I am the same. Everyone should open their eyes. If there are any mistakes in my comments, please feel free to correct me.)

So distinguishing between fluctuations and trends is like finding friends and enemies. (Correct.)

Normally, the market will not go straight in any direction. (It is impossible to go straight in any direction.) The so-called market trend is the rising, falling and horizontal extension trend formed by the rising or falling direction of the peaks and troughs.

Most of the time in the cryptocurrency market, most investors are wrong, and the mistakes are mainly caused by callback fluctuations. (Don’t position yourself as an investor, just a trader, making money by price difference.)

Many people see the trend correctly, but there are more people who ignore the trend because they think the trend may pull back and close their positions or do reverse operations. (It is still caused by the lack of rules.) If you want to catch the trend, you have to give up small fluctuations; it is also important to find tools to find trends. It is better to trust your eyes than your feelings. (Yes, with trading rules, you can use your eyes to follow the trading rules.) Most technical tools and systems are essentially trend-following, and their main design intention is to follow the rising or falling market.

4. Losing money is a punishment

Punish your ignorance; punish your greed; punish your luck; punish your violation. Ten thousand empty theories are not as good as one practical action rule; no matter how many market analyses you have, they are not as good as one practical buying and selling plan. (True insight!) Genius is to focus all your energy on a specific goal; trading genius is to focus your energy on a trading method and form a trading habit. (Correct.)

A true philosopher must be as generous as the sea; if we are tolerant to the market, the market will also be tolerant to us. Only by giving up some opportunities can we seize more opportunities. If we only have a penny's mind, we will never get two cents' worth. If we stare at the opportunity of 20 points every day, we will definitely miss the opportunity to double our profits. (Very correct!)

Once you change the way you think, you change your beliefs; (It’s reversed. Beliefs are thoughts, and thoughts determine the way you think.)

Once you change your beliefs, you change your expectations; (If you change your mindset, you change your expectations.)

Once you change your expectations, you change your attitudes;

Once you change your attitude, you will also change your behavior;

Once you change your behavior, performance will naturally change;

Once your performance changes, your life will be transformed!

5. Why do you trade too much? Why do you trade with a full position? Why do you rush to go against the trend? Why don’t you want to stop loss?

Everything is because of the desire to succeed quickly and to succeed by chance. (Everything stems from human nature: greed!)

Most investors are much better at stopping losses than holding on to gains.

Stop loss can control risk, but the most important thing for success is to "hold on to the rise" when you are right. (Correct, letting profits run is the real way to win.)

If you can't maintain the growth, you won't be able to achieve the principle of making a small profit with a big risk, and making big profits with small losses.

Most investors have the trading habit of closing their positions when they make a profit and waiting when they lose money. This is the fundamental reason for their failure. (Correct!)

Is the key to opening the currency market following the trend? Is it timing? Is it stop loss? Is it capital management? None of them!!! The key to opening the futures market is execution - simple rules, long-term strict execution. (So true!)

No matter how good a map is, it cannot take you to your destination without action. No matter how good a law is, it cannot prevent crime without enforcement. Most investors know the methods and rules for success in the cryptocurrency market. If you do it for a long time and enforce it, you will succeed. The dividing line between success and failure does not lie in how much you know, but in how much you have done.

6. The harm that rebound brings to you

Because you are thinking about the rebound, you close your position too early and miss out on greater trend profits; because you are thinking about the rebound and waiting for the rebound to open a position, the rebound is delayed and you miss a trend;

Because they were thinking about the rebound, they wanted to wait for the rebound to stop loss when they should have stopped loss, thus missing a better opportunity to stop loss;

It is because of the rebound in mind that people go against the trend and take huge risks;

To make big trending market, we must filter out the secondary small fluctuations and rebounds; counter-trend rebounds are the main reason for investors to make mistakes. (The dialectical relationship between giving up and getting is understood, and the root cause is still greed!)

7. In our observation of customers, we found that those who suffered losses of more than 50% in a month usually belonged to two types of people:

The first type is people who rarely trade, only a few times a month, but when they make mistakes, they don’t stop loss and hold on, and end up losing a lot. (Single-minded thinking!)

The second type is that you trade a lot, and you lose a little at a time, but you keep losing money. There is not much room for short-term trading on the day, and what you pursue is that the number of successes is greater than the number of losses; if you can't do this, you have to find a new short-term trading method. Why do you keep trading when you keep losing money! If you are eager to earn back the money you lost, you are eager to trade, and you don't trade according to the facts, you often lose more. (Random operation!)

Investors often say: "I know those are right and can make money, but I can't do it."

There are no secrets in the market. The principles of success are well known to everyone. Successful people insist on doing it, while unsuccessful people follow their own psychological feelings. For example, if you make a little money, you want to run away, for fear that the money you have earned will fly away again; if you lose money, you always want to wait for a callback, which often makes a small profit but a big loss, and you will eventually fail. For another example, those who make big money are those who do long-term big trends, but most investors feel that short-term trading is the safest. Is it safe? Doing short-term trading every day, after a week, a month, or a year, has the funds in the account increased or decreased? (There is a saying: short-term is silver, long-term is gold. It is not true. If you do short-term trading well, the return will definitely be better than long-term. The key is whether you have such a trading system? Moreover, especially for futures trading, intraday trading must be much safer than overnight trading. The most popular and effective trading method in the world now is high-frequency trading. We Chinese are still sitting in a well and watching the sky, complacent, and have not kept up with the times in terms of concepts.)

Trade according to the correct principles that can make money; don't trade according to what makes you feel comfortable.

Someone has done research and found that if you don’t stop loss and hold on, 80% of the trades can be held until you make money and close the position, but it is the 20% that cannot be held back, which determines that the position will inevitably be liquidated in the end! (It’s all a question of the amount of funds. If you theoretically have unlimited funds, you will definitely pull back the lost funds, and not only pull back but also make money. The problem is that in reality you don’t have enough funds to hold on, and you will die before you get halfway. In addition, there is also the issue of effective use of funds. Even if you have enough funds to hold on, if you don’t hold on and go with the flow, the effective utilization rate of funds will be much higher.)

Then, you can open a smaller position and set a larger stop loss, which can control the risk and increase the success rate of the order. (It is still a balance between risk response and effective use of funds. The best solution to this problem is to find a balanced trading system through statistical probability.)

Compared with the stock market, the currency market has greater power and freedom. You can go long or short, close today or tomorrow, and use less or more funds. A philosopher once said that there is no one who has power and will not abuse it.

8. You have to give up something to gain something when you speculate in cryptocurrencies (the principle of giving up, learn to give up something, and the market may give you more.)

1. Give up your own imagination, prediction, long and short views; only then can you trade according to technical rules and market conditions

2. Give up the counter-trend callback and rush to the top; only then can you go with the trend

3. Give up the opportunity of local short-term small fluctuations to seize the opportunity of long-term big trend;

4. Give up the mentality of relying on luck; only then can you trade according to the rules;

5. Give up abnormal situations to catch the market you can grasp;

6. Give up the concept of money; only then can you trade easily.

9. Five hurdles for beginners

1. Change your mindset: It is true that you come to the market to make money, but the market is not an ATM; first think about how to control risks and reduce losses. (Risks cannot be controlled, they can only be dealt with.)

2. Set a stop loss: Everyone knows about stop loss, but big mistakes are made by not setting a stop loss. Make stop loss as easy and natural as eating and sleeping.

3. Big profits and small losses: Don’t run away when you make a little profit, and don’t stop loss when you lose. Trade only when the profit margin is three times the stop loss margin. (Wrong, the number of times is not something we can determine in advance, and it is subjective and objective. Whether to trade is based on the instructions of the trading system.)

4. Trading system: If you want to run a train, you must first build a railway. If you want to trade, you must first build a system.

5. Trading habits: Most investors fail, not because they don’t know, but because they don’t do it; make your ideas and methods a habit.

People who make a few points are farmers in the currency market, those who make dozens of points are workers in the currency market, those who make swings are traders in the currency market, and those who make big trends are bosses in the currency market! (Those who make swings may be the biggest bosses, depending on what kind of swings they make.)

Successful traders always keep two eyes open, one looking at the market and the other always looking at themselves. At any time, your biggest enemy is yourself. Correcting yourself is always more important than observing the market.

Work hard on controlling yourself! The importance of psychological control and behavioral control cannot be overemphasized. As long as you can pass this level, you are halfway to success. If you can't do this, it doesn't matter how well you do in other parts.

To be successful, you must first be able to control your own behavior. If you can't do this, no one can help you. It is impossible to take this last half step.

The question of knowing and doing. Let me put it more seriously: in fact, it is still because of half-knowledge. Ignorance makes one fearless; half-knowledge makes it difficult to do; true knowledge (integrate with the market as much as possible and understand the market from one's own perspective) makes it easy to do.

From the perspective of the market, the inability to hold on to orders is caused by a lack of deep understanding of the details and fluctuations in the development process of market trends. If the development of the intermediate trend is all under my "control", then what is there to hold on to?

When the market is favorable, you must learn to get used to making profits. This is an important sign to distinguish whether a trader is mature or not. Suppose your cost is 8 yuan, and the market price is now 80 yuan, but it is still lower than its own value. Will you hold on firmly? Many traders are uneasy when they make profits, but feel at ease when they lose money. How can they make long-term and stable profits?

Work hard to control yourself! The fear of losing money often makes people violate their principles, which is manifested in frequent stop-loss and frequent trading. Pursuing doing things right is more important than always thinking about making money or losing money!

2. Common fallacies of going against the trend, holding a large position, and stopping losses

Going against the trend, holding a large position, and not stopping losses are considered the three magic weapons to prevent a margin call. On the contrary, those who often follow the trend become the saliva of the market, those who hold a light position and live long are regarded as the supreme treasure, and those who stop losses and kill themselves are popular, and their fate is not much better.

The cruelty of the facts is shocking. Because people just follow the crowd, because the blind lead the blind, because many people are sheep!

The proposition of going against the trend or following the trend is actually a false proposition. At any point in the present, there are two fates: turning or continuing. This is why no one can absolutely analyze the market! Let's make this assumption: someone follows the trend: the daily line rises, the thirty-minute line rises, the five-minute line rises, and the one-minute line rises... Buy! This is absolutely following the trend! However, after the rise, there must be consolidation or decline. If the situation evolves like this: it starts to fall in one minute, then it starts to fall in five minutes, and then it starts to fall in thirty minutes... Brother, you are miserable! The same is true for declines!

Why is your fate so bumpy? Because any entry point is both in the direction of the trend and against the trend! Therefore, talking about the trend and against the trend often becomes a laughing stock. However, the trend has different sizes. Going against the big trend and following the small trend requires you to operate accurately and escape quickly; following the big trend and going against the small trend may have gains, but it may not necessarily be the last laugh. Why? Because a thousand-mile dam collapses because of an ant hole, and any reversal starts from a small level.

However, in operation, you must make a choice between following the trend and going against the trend. How to choose? People who have watched many historical dramas should know that momentum is often related to power. Those small countries can also establish hegemony after accumulating power for many years, while the hegemon of one side will inevitably fail after a long time if he abuses the national power! The market is still the same. In a rise without divergence, every callback is an opportunity to go long. In a rise with continuous divergence, shorting is often better than going long!

However, technical analysis is only part of the transaction. No matter how sophisticated your operations are, if you cannot control the risks, a margin call is possible at any time!

In trading, at least in the theoretical world, heavy positions are often like rats crossing the street, and everyone shouts and beats them. But the fact is that among the big winners in this market, few can achieve great things with light positions every day. Soros has a large army and spends billions of dollars. Although he has experienced many risks, he still laughs at the world. Why? Positions affect the fluctuation of capital rights and interests, not their direction. The fundamental reason for controlling positions lies in the probability of the system and the error of operation accuracy!

If your system is a 100% system that can operate at the lowest and highest points in a certain period of time, it is a waste if such a system does not have a heavy position. Therefore, the method of position control should be set according to your system. At the same time, the position is often related to the operation level. The trend of the 30-minute level is often more volatile than the trend of the one-minute level. The larger the capital capacity, the greater the potential profit. Why not have a heavier position? There are smart people everywhere who enter and exit with a heavy position in one minute, but pass by with a light position in 30 minutes. The result of heavy position trading is often the ups and downs of the capital curve. The risk of heavy position will generally not explode by limiting it. Moreover, must heavy position be heavy position when there is a loss? Can't it be a profitable heavy position? Heavy position can only be done once, and it cannot be repeatedly added to form a heavy position? Often, the biggest risk for a professional trader is not how much loss a single transaction has, but missing the big market. Therefore, in the big market, you must continue to add positions to form a heavy position. In general, the position is related to the trading system, the operation cycle, and the operation strategy!

Stop loss! This method, which is equivalent to self-castration, is often regarded as a treasure. It's not that stop loss is bad. But many people don't understand stop loss. Stop loss is like cutting off an arm to survive! But people in the market often have two ways to die. One is to die suddenly without stop loss, and the other is to stop loss and die! Stop loss, from the root, is to prevent accidents, and the effect is similar to Durex. It is used when your system has an accident. Therefore, before stop loss and self-castration, first ask if your system has an accident? If there is an accident, stop loss and exit. If there is no accident, don't stop loss. The ridiculous thing about some people who stop loss according to the percentage of loss is that they don't follow their own trading system! Therefore, before designing the loss amount, the first thing to consider is the difference between the current buying point and the system's accident point, and then calculate the position, otherwise, your self-castration is often in vain!

Why is trading psychology important?

If the trading psychology is not rigorously prepared, trading techniques will play only a small role or be of no value at all. Traders need to sow the seeds of psychological cultivation. In time, these seeds will germinate and grow into a high level of awareness.

In the trading world, the great wealth of traders is their thoughts, not just the trading methods they use. In other words, "correct trading is correct thinking." Every transaction helps to cultivate a deeper understanding, a higher level of awareness, and better control of emotions.

Have a healthy trading mentality

First, have positive thoughts, be proactive in words and deeds, and turn thoughts into verbal actions.

Second, do what you can do, and don't try to catch every fluctuation. The reason is simple. If you clench your hands, you can only catch a limited amount, but if you open your hands, you will have the whole world. No one in the world can catch every fluctuation of the trend. We can't play the role of God and do what we can do.

Third, since sometimes we have to be as still as a mountain, we might as well make good use of this time to take a vacation and get together with our loved ones. Even if a person earns the whole world, but loses family, friendship, love...how can he be healthy?

Fourth, if we rely on luck in this market, it will be difficult to survive for a long time, because we cannot be lucky every time. But if we are willing to work hard to verify the market trend, learn new market knowledge and accumulate strength, it will be easy to keep up with the trend fluctuations, and with this ability, we will naturally live a more confident and happy life.

Summarize

If the trading psychology is not strictly prepared, trading techniques will only play a small role.