The so-called high-to-simple trading philosophy can only be understood after many years of actual combat. To become a stable and mature futures trader, it often takes 3 to 5 years of experience, during which time they will experience many liquidations and failures.
The way of trading, the art of trading. If there is a way but no technique, the art can still be sought. If there is a way but no way, it stops at the art. What is the way and what is the art?
However, if you can absorb some core trading concepts from other excellent traders in the process, it will speed up your pace towards stability and maturity. Today I will focus on talking to you about some simple and effective trading concepts that you know but may not really understand, and also point out some common stages and feelings that most traders may experience.
The first stage: When you first meet, everyone will have a good time, and futures are no exception.
Just like your first love, you first come into contact with futures, fall in love with it, and become obsessed with it. When you are at work, you think about threaded iron ore rubber sugar every day; when you watch the news, world peace no longer has anything to do with you; after get off work, you can’t wait to open the genuine Zhixing, start trading. After one o'clock in the morning, I reluctantly closed my position.
When you first fall in love with something, it is a wonderful time for a person. You will take the initiative to read a lot of books about trading, join many forums, join many WeChat groups, and maybe even learn from a few experienced trading teachers.
At this time, you are hungry for knowledge and study crazily. What follows is that your knowledge greatly increases, and the domestic situation, international situation, political and economic environment, the Federal Reserve, etc., all begin to enter your daily life. You feel very high and have more knowledge than the people around you. From time to time, you will post a market analysis in your circle of friends to show off.
At this time, you are like the sun at six or seven o'clock in the morning, full of energy, unstoppable, calm and rational. You will constantly remind yourself that trading must be disciplined, you must definitely follow the trend when entering the market, and you must set a stop loss on your order.
At this time, how many of you will take the initiative to read the memoirs of stock operators and study waves and Gann. You will think about the good and bad aspects of trading on the left and right sides, review the trading every day based on theory and study how to do it better, and also pay attention to the fundamentals.
The beauty of trading is nothing better than this. You will find that although you sometimes lose a little, you also make a lot of money. If you plan everything, you may still make a lot of money. Your capital curve generally fluctuates upward. Occasionally there are minor setbacks, but they do not affect the overall situation. The important thing is that your account will not suffer a major single loss because you know how to stop the loss and exit in time. There will be no feeling of exhaustion, and you will also know how to rest and not stay up all night.
So you become more and more involved in it, and you even feel that the world of futures is created just for you. This happy time may last two years.
However, good times in life do not come often. Just like the freshness of love, it will not exceed 18 months. After spending the first two or three years of your trading career, you have basically figured out the ins and outs of this market, accumulated some trading experience, and you have begun to enter the trading plateau. It's going to be a long, lonely time.
The second stage: the plateau period, this is the time when a futures trader lays down his lifelong trading skills.
It takes many years to figure out the pulse of this market, accumulate trading techniques, concepts, fund management, and a lot of real trading experience. At this stage, you will find that your trading has entered a plateau reaction period, and it will be difficult to make a breakthrough. Performance will be good and bad, and sometimes you will experience flash crashes of some orders. You’ll keep yourself reflecting and sometimes feel happy about catching a big wave.
During these long days, you will many times think that you have quite a lot of experience and your trading system is mature and perfect. In the trading profit target you set for yourself, the rate of return is reduced from the initial monthly income of 20% to 10%. You will tell yourself that you can easily earn at least 10% every month. (Actually, your goal is to at least double it in half a year.)
At this stage, you will not exclude using medium and heavy positions. You know that this is not the best way to manage money, but you will comfort yourself that you have experienced three or six years of market baptism and have not experienced any big storms. You will think that 50% of the position is not a big problem, and you will often cross this line from time to time.
You're not a success, but you're not a failure either. Everything is still persisting, and you define this as: a long march of suffering. Traders must always be inspired by the soul of an ascetic!
The third stage: Flash crash is the fate of most experienced traders, and few can escape.
Either quit or get depressed. Those who persevere become legends.
After persisting for many years, you thought you were about to start flying.
It seems that everything is ready and all that is needed is the east wind. Experience, technology, knowledge, experience, and the years of training in the past make you feel that the time has finally come for you to go big! So, you start to mobilize large amounts of funds, borrow, mortgage, raise the money you can get, and run into the market.
The spring breeze is blowing, the war drums are beating, and millions of funds are eager to enter the market.
Life is here to fight! Do you think that earning tens of millions from futures is not much, but hundreds of millions is not much more than that. Prosperity, wealth, and the Holy Grail of trading are no longer a dream.
The temptation of trading and the greed of human nature are not amplified by linear multiples, but at an exponential level! It is your first time to experience such a high-level trading life, and the disadvantages deep in your human nature are opened up at an exponential level. Even the lengthy transactions of the previous six or eight years could not erase these weaknesses.
The loss of large amounts of money often only occurs with a 3% probability. I know that you will be very careful in your operations and warn yourself that you must strictly control your discipline and positions. However, one fatal greed will make all your previous efforts in vain.
Without experiencing the ultimate suffering of life, you have no ability to control your deepest desires.
The next time will be the most painful memory in your life. Insomnia, depression, and even thoughts of suicide. I was completely despondent and had no interest in anything. I regretted entering the futures market and regretted getting involved in finance. The pressure of large amounts of funds is something you have never experienced before as a small retail investor. Even if you have performed the same money management model countless times.
You fell. Flash crash is a fate that countless experienced traders cannot escape.
At this time, you will miss the beauty of the futures market at the beginning of the year. The two most important decisions you face are whether to persist or to exit the market.
Many people choose to persist for another year and a half. Due to various pressures, they are unable to break through their inherent weaknesses, slowly let go, withdraw from foreign market futures, and retire from the world.
In the end, only a handful of people continue to persevere. Here, a few lucky ones wait until the day they become completely enlightened.
Once you are completely enlightened, you will be full of trading youth again.
The fourth stage: the great path to simplicity, complete enlightenment, nothing more than light storage, following the trend, and sleeping more
The three realms of life are to see mountains as mountains, to see mountains as not mountains, and to see mountains as mountains. After ten years of trading and numerous market tribulations, you finally start to get back on the track of making money easily, which is nothing more than the following points: light positions, follow the trend, and learn to take a rest. The mountain is still the same as when you first entered the futures market, but people are people after enlightenment, and the methods are still the simplest methods.
You're right if you don't take futures trading too seriously. Your desires have been raised to a new level in desirelessness. The spiritual sublimation has promoted your self-discipline, and the baptism of the soul has cleansed your desires.
For successful trading, I have realized that trading with the trend is the first element, and good fund management is the core. Finally, don’t make a move easily and wait patiently for a real opportunity with a high winning rate to appear. Reduce trading opportunities and increase the probability of success!