1. Short-term trading.
Many well-known short-term experts have incredible stable low retracements and capital curves that slope upward to the right, which is very attractive. Short-term trading is also the trading style that people think is the easiest to get rich. Most people start trading in the short term because making money every time makes people feel good. But in fact, short-term trading is very difficult.
The difficulty is that the short-term winning rate cannot be too low, and the winning rate must be maintained high in the long term. It is difficult to maintain a high winning rate in the long term. Just like a person can get perfect scores many times, but it is impossible to get perfect scores forever in his life. In reality, I found that almost no short-term people around me have maintained high returns for more than 3 years. There certainly are in reality, but very few. I have been familiar with Taoist classics since I was a child, and the way of thinking imprinted in my bones is that "hard things are easy to break, soft things will last forever." Things that are too sharp will not last long, so in the end I did not choose this path.
This is not to say that short-term trading is not good. I admire the skills of short-term experts very much, and their level is beyond my reach. Just according to my thinking habits, I will not take this path. Realistic statistics show that the long-term success rate of short-term traders is lower than that of traders of other styles. In the end, the number of short-term traders who can make stable profits for a lifetime may be less than one in ten thousand. Therefore, the results of some things are destined from the beginning. If you choose short-term, or change careers (such as training) when you make a lot of money, if you continue to do it for a lifetime, your life is likely to be one of extremely low probability of success and extremely high probability of success. s failure.
2. Trend following
Some of the concepts of trend following are similar to the concepts advocated by Taoism such as "doing nothing", letting nature take its course, profit and loss coming from the same source, and "taking what you want, you must first take it with it". Therefore, I accept it. I am very sexual, which is also one of my personal strengths. If you don't have these concepts in your mind, it will be more difficult to accept them. Some people may not even be able to understand them in their lifetime. Forcibly learning the trend following style will ultimately fail.
Predicting the future is one of the most difficult things, and trend following avoids this difficulty. Therefore, the advantage of trend following is that you don’t have to work hard to predict the market, it is easy to get started and can be executed without any brain. The disadvantage is that it is impossible to create a system that is suitable for any style. Every system has its retracement. During the retracement period, the impact on execution and funds is huge, making it difficult for ordinary people to implement it.
Lowering your position reduces drawdowns and also reduces yields. Therefore, international funds that use trend following strategies often reduce risks by allocating light positions to multiple markets and varieties, and give up adding positions based on floating profits. Although they have achieved steady growth, their yields are relatively mediocre. If you want to have a high rate of return, there will inevitably be a huge retracement, and the execution power and tolerance of traders will also be very high.