I. Fund management
Good fund management is the foundation for maintaining a stable trading mindset. An investor who holds a large number of positions is like a pedestrian who is heavily shouldered. A slight obstacle on the road is enough to cause him to fall. The fundamental reason is that his position has become a burden for him and has exceeded his ability to withstand. So why do investors do deals that go beyond his ability? It is because the desire to profit makes it impossible to judge himself correctly, and he has fallen into the trap of profit. Under the temptation of the aura of profit, he can no longer see the trap of loss. The trap of loss is generally in the dark, but the profits are shining. When the investor enters the market, he will immediately find that there is a trap full of losses. The good wishes before entering the market are instantly crushed by the fluctuation of the market. It will be found that the market is far from being as docile as he imagined. At this time, the desire to profit has become his disaster. A large number of positions have become a huge burden, and the mentality caused by improper fund management has begun to be exposed.
Do a good job in fund management. I personally think that we should pay attention to three points: 1. The biggest catastrophic situation in the market. When the market is in a catastrophic situation, if the market runs in a stop-and-go manner, your losses are not enough to affect the ability of your fund account to continue trading. This is a special case. 2. Under normal circumstances, you can only do transactions that you can afford, and your losses should be within your ability. Therefore, the scale of fund use can be calculated by your maximum stop loss, but not by the estimated profit. 3. The size of your funds should be combined with your trading ability. Strong trading ability can use a larger proportion of funds, otherwise you will think that your profit is too small and the mentality is not good; investors with poor trading ability should be more cautious, otherwise your loss will exceed your imagination and affordability. It will make you feel confused.
Second, correctly understand the loss
Rejecting losses is the root cause of a bad trading mentality! Loss is a normal phenomenon in trading, and losses are inevitable. Profits and losses are like people’s left and right feet. Successful profits are made up of profits and losses. Profits and losses constitute a transaction, no one can split the combination of profit and loss, there is no trade or profit-only transaction in the market. The crux of the problem is that the vast majority of investors treat losses as wrong transactions, and believe that losses are their own mistakes, and thus constantly ask themselves to accurately analyze the forecast market, thereby reducing the number of stop losses. However, the market is simply unpredictable. Investors who regard losses as mistakes can never get out of fear of market uncertainty. The uncertainty of the market makes investors always in a state of turmoil. They are hesitant to enter and exit, and the stop loss is even more Not decisive, even if the money management is good, it will not be able to effectively execute the trading plan because of fear of doing something wrong, thus losing the trading opportunity.
What is the loss? Loss is only the price that must be paid for the profit of the transaction. It is the normal cost of finding profit opportunities. Any profit must be paid! This is true in any industry! Loss is normal! Losing money does not mean that you are wrong, but only the cost of profit on your behalf has increased. Investors who regard losses as errors will lose confidence in the transaction, because losses will occur frequently, and loss of confidence is the root cause of bad trading mentality. I never think that loss is the wrong trading behavior. I never ask myself to accurately predict the market. I just keep using stop loss to find trading opportunities. I know that I will stop losing losses before I find an effective profit opportunity. Those who are unwilling to accept losses must be those who demand that they must be able to accurately predict the market. He is always afraid of doing something wrong! Fear of mistakes will inevitably lead to a bad state of mind! The mistake is not terrible, the terrible thing is right! Accurately predicting the market is simply impossible, which will lead investors to fall into the confusion of desire and reality and the mentality is difficult to balance. Right and wrong cannot be judged by profit and loss, but by the quality of profit and loss. If the market is reversed and then stopped, this does not mean that you have done something wrong. It just means that you are doing it right. You should tell yourself: “Oh, I should pay the cost” instead of blaming myself: “How come I am wrong. “Well,” and the market is doing the right thing but only making a small amount of money. On the surface, you are profitable, but you are really wrong! Only by treating the loss as the cost of finding a profit opportunity will you not be afraid of the loss and accept the loss. Only if you can accept the loss in a calm manner, your trading mentality will not be stable due to market uncertainty.
The extent of the loss should be controlled by the management of funds, and you cannot let the loss develop without restriction. At this time, fund management began to play its role.
Third, pegged to stop loss, regardless of profit
After doing the first two points, your trading mentality will still be affected by the desire for profit and it will be difficult to calm down. The moment of profit is always in our hearts, and the purpose of our trading is to pursue profits. This desire will be scratched in our hearts like an ant, causing us to suffer. Our mentality will fluctuate with the price fluctuations, buy the total hope price has soared, and sell the total hope price has plummeted all the way, this eager profit-seeking desire itself will lead to your mentality. The market will never go according to your mood! In fact, the only thing we can control in the transaction is the stop loss, but the profit will not listen to us, because the market is unpredictable. We can only do what we can do, and we must work hard to do what we can do, do what we can, and what you are pursuing will come naturally. Keeping a stop loss is doing what we can do, because we can control the stop loss; if you are pegged to profit or market, you are doing something that you can’t control and grasp. Pursuing something you can’t grasp will definitely make you mentally mindful. Can not grasp. After entering the market, we only need to keep an eye on the stop loss. As long as the price is less than the stop loss point, we will always hold it. Don’t pay too much attention to the specific fluctuations. If you pay attention to the fluctuations, your mentality will also fluctuate. Stop loss is relatively static, controllable, and the controllable nature of the stop loss allows us to maintain a good mentality.
There is a saying in the market: Let the profit take care of yourself! Very brilliant! When you are just looking at the stop loss without considering the profit, what other factors can make your mentality worse? Sticking to stop loss without considering profit is not about pursuing profit, but it is precisely the best way to pursue profits, because profits come naturally, and after waiting for patience, they are waiting for it, rather than deliberate pursuit and frequent transactions. This is the source of profit. Risk management is good, and profits will come naturally! ! To maintain a good mentality, we must fully cooperate with the above three aspects. First, we must correctly understand the loss, accept the loss calmly, and then control the loss by fund management. Finally, we must implement the specific transaction by focusing on the stop loss without considering the profit. Maintaining a good trading mentality is also a systematic project, not simply doing a good job of fund management.
8 healthy fried foreign exchange mentality
- Only hit you if you can win (sure). This is a well-known saying that teaches investors to carefully choose the currency that suits them and their buying and selling points. For example, when we buy a certain currency, we will feel comfortable that “it” is with me and is ready to work for me. We try our best not to be against the market because we know we can’t win it. When we realized that we made a choice that was in conflict with the market, we quit and immediately let us stand with the powerful side.
- It doesn’t matter if you fall, as long as you gain something from the process of getting up. Investors must learn to get out of the trading mistakes and sublimate. Every loss we make is a springboard for us to move to higher level trading skills.
- No matter how bad things are today, tomorrow will be another opportunity to correct it. As a successful investor, you can’t bring yesterday’s burdens into what might happen today. The residue of the previous transaction failure must be completely removed before we start the next transaction. Otherwise, we are doomed to failure.
- Know why we take every action and never take action in greed or fear. Investors must know that there is a space between greed and fear, which is “wisdom.” We only take action when we have wisdom.
- Always understand what other people in the market are thinking. Successful investors (traders) always seek to understand what other traders are thinking about in a currency trade. The pain (failure) of other traders may be an opportunity for you, because successful trading behavior is nothing more than buying low-priced slashed commodity currencies from those who fail, and then selling them at high prices to those who are greedy and blindly following. If you want to make money in a trading game, you must know the feelings of other traders in the market (fear or greed), and mastering this feeling will make you rich.
- Don’t value yourself too much. Whenever you make a profit, you must remember this sentence. Think of continuous profit as an ordinary thing, and you can do it with a normal heart.
- The market is not something to conquer, but to treat it friendly. Work with the market, not against it, and see it as a friend who will make you rich, not an opponent that will plunder. The market is not your nightmare, but the interpreter of your dreams.
- Sometimes the loss is profit. Most investors ignore this concept. If you buy the euro at 1.2800, it falls to the 1.2700 stop loss and loses 100 basic points. The euro has fallen to 1.2600, and you have no “loss” to make a profit. The art of profit is determined by your intelligent control of stop loss.