In trading, you often hear familiar classic sayings such as "go with the trend" and "cut losses, let profits run." Previously, I disregarded these phrases entirely. However, as trading deepened, I increasingly realized that the longevity of these classics is due to the significant insights they encapsulate, distilled from the hard-earned experiences of successful predecessors. If you are also on the path to trading success, you will find that all your efforts will unconsciously move toward this direction. There are various methods to achieve success, but they all involve deep cultivation in the right direction, withstanding numerous trials, because trading is essentially not a simple task. The so-called "Great Way is Simple" is built upon profound experiences and reflections after enduring pain and hardships. When you gradually begin to profit, you suddenly realize: Oh, this is how trading is done. After a long detour, you return to those simple words you heard at the beginning. First, understand that this roundabout journey was not in vain; without it, it would be impossible to achieve trading success. Secondly, only by taking this detour and experiencing various failures until you succeed can you truly understand the essence. Ultimately, you will find that this simplicity is not the naive simplicity you once thought, but a simplicity derived from a high level of understanding and wisdom.
In trading, how can one achieve "simple at the beginning" to "simple as the great way"? I have tried to summarize some essential paths in trading and will briefly state them here to reinforce my own trading mindset and hopefully provide some insights to friends reading this.
1. Learn to deal with losses. Trading has two sides: loss and profit. No one starts off successful, and no one can avoid losses. Only a handful of people ultimately succeed. The only way is to gradually move towards profitability by learning to handle losses. If the problem of losses is not well managed, any amount of profit will disappear, and even the principal may be swallowed by the market. Traders must follow this order—don't think about making money first because it won't matter how much you make. When the critical moment comes, the game ends.
2. Discover opportunities. Only when the problem of dealing with losses is resolved can the remaining energy be focused on embracing profits. The primary task is to discover opportunities. To find opportunities, one must first understand price fluctuations and then find the fluctuations they are looking for. Do you want intra-day opportunities or daily trend opportunities? Choose the appropriate opportunity based on your personality and preferences. More importantly, find out when and where these opportunities will appear and in what form. Identify the necessary and sufficient conditions for these opportunities so you can understand where they lie.
3. Capture opportunities. Once you discover where the opportunities lie, the next step is to find trading strategies to capture them. The situations when opportunities arise are complex and varied, so your trading strategies must be flexibly applied, with clear entry points for building positions.
4. Profitable positions, adding positions, reducing positions. When profitable, you should boldly hold onto the position on the premise of following stop-loss. If a similar entry signal appears again, it's time to add to the position. For situations where the expectation is not sustainable, you should reduce or even close the position promptly when expectations are met.
5. Exiting and re-entering. Exiting a trade can be done through the natural progression of stop-loss or when a trend reversal is identified or anticipated. After exiting, if the market does not reverse as expected but continues along the main trend, find another entry point and re-enter the market.
Trading is like a cycle, and the key is to smoothly connect several nodes. If any link is not handled well, trading will encounter problems. It is evident that trading is a highly orderly systematic project. Although it seems complicated, for successful traders, it has become second nature and is simply an upgraded form of "simplicity."
See mountains as mountains, see mountains as not mountains, see mountains as mountains again. The Great Way is Simple, but this simplicity is not the same as simplistic thinking—only through countless refinements and hard work!
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