Wang Guowei said in "Human Words" that those who achieve great undertakings and great scholarship must go through three realms: "The west wind withered the green trees last night; I climbed the high tower alone, gazing at the end of the world." This is the first realm. "My belt gradually grew looser, yet I did not regret it, for I made myself haggard for her sake." This is the second realm. "I searched for him thousands of times among the crowd; suddenly, I turned around, and there he was, in the dim light." This is the third realm.
The same principle applies to trading.
In "The Analects," it is said: "A wise man is not baffled, and by forty, he is no longer confused!" On Wall Street, there's a saying that it takes ten years to become a successful trader.
If you make mistakes due to reasons, excuses, hesitation, hopes, or immature behaviors, you cannot trust yourself. If you cannot trust yourself to be objective and follow your own heart, achieving consistently successful results is impossible.
Things that seem simple can be very annoying. Ironically, when you have the right attitude, when you have a "trader's mindset," and when you face continuous uncertainty with confidence, trading becomes as simple as you initially thought.
Learn to adjust your attitude and beliefs so that you have no fear while trading but keep an overall perspective to prevent recklessness. Remember that your desire to be a successful trader is a projection of your future self. Growth means expanding your horizons, learning, and creating new ways to express yourself.
Confidence and fear come from our beliefs and attitudes, but they are contradictory thoughts. Confidence requires having absolute faith in yourself, even if the losses may be greater than you imagine. However, if you do not train your mind to handle inconsistent thoughts, you will not have this confidence.
Learning to accept risk is a trading skill—the most important skill you can learn. Yet few traders put their heart or effort into learning it.
If you must win, if you must be right, if you cannot lose, and if you cannot be wrong, you will find defining and interpreting market information to be painful. In other words, you will see the information generated by the market as an obstacle to your happiness.
Your attitude and thoughts are not created by the market. If you are confident, it is not because the market makes you confident but because you are aligned with your beliefs and attitudes, allowing you to experience results, gain insights, and maintain confidence because you are learning.
While learning is a good thing, if you do not take responsibility for your attitudes and viewpoints, your learning is flawed, leading you to misuse what you have learned. If you are not aware, you will use your knowledge to avoid risks, creating a cycle of pain and dissatisfaction that you are constantly trying to avoid.
If you want to avoid punishing yourself due to painful feelings, you will blame other things. You apply a bandage to the wound. You may think you have solved the problem, but if you procrastinate, it will only make the problem worse. This is necessary because you have not learned enough, and you do not know how to interpret it to get a better result.
If you do not have the attitude of a winner, no amount of market analysis can compensate. The market can give you a winning edge in trading, but without a winning attitude, this edge will not make you a consistent winner.
If you have the courage to take responsibility and do not expect anything from the market, the market will never be your enemy again. If you stop competing with the market, you will be surprised at how quickly you learn what you need to learn. Taking responsibility is the cornerstone of a successful attitude.
So who can make money in this market?
First, those who have long used the market as an ATM are independent thinkers. But they also recognize that as long as they are independent thinkers, they will make mistakes because they are human, sensitive, and biased.
Second, they incorporate mistakes into their trading systems and develop strategies to respond to errors. This means they understand the effectiveness of their systems but also know their flaws. Thus, they know what to do and what not to do.
Third, they are disciplined and use mechanical trading methods. While repetitive and effective trading can be boring, the goal is to make money, not to seek excitement or pleasure.
Fourth, they keep learning. Today's market is no different from yesterday's because it is always changing.
Fifth, they are conservative in their investment behavior. The future is full of unknowns, and they often take a step back and have backup plans.
Sixth, they are good at destroying the concept of achievement. Success and failure are equally important. If a method works today, it may fail tomorrow. Munger believes that if you haven’t destroyed your favorite belief within a year, you’ve wasted that year.
Be optimistic; lacking success never hurts. Trading is difficult, but if you stick to principles, it's easy.
Lastly, I want to say a few words:
All beliefs and our desires are harmonious.
The structure and environment of all beliefs are consistent.
To be a consistently successful winner, you must:
Objectively confirm your strengths, measure risks before each trade, fully accept the risks, or otherwise give up the trade, and trade without any reservations or hesitation. Let the market make money for you, monitor your mistakes, understand that these principles are necessary for consistent success, and never violate them.
For more related trading knowledge, please contact CWG Ahai on WeChat: ahaidanshenkeliao
