Technology, risk control and mentality are indispensable elements in the trading process. Lack of any aspect will lead to instability or failure of the transaction.
1, technology-the cornerstone of trading
The technology mentioned by the author not only refers to technical analysis, but also includes the system of transaction basis, such as technical analysis, fundamental analysis, macro analysis or other specific analysis of a certain category. A good technical system is the cornerstone of a successful transaction.
Without technology, transactions will fall into a blind and disorderly situation. If technology fails, the direction, strategy and plan of trading will lose stability and reliability, and traders will constantly question themselves and everything. So good technology can make your transaction in a good environment and a good foundation from the beginning, and have a good start.
For programmed traders, the speed of data sending and receiving and the excellent strategy are the key to the quality of technology. For investors who hedge (especially the seller's hedging), the quality of products, the smooth spot sales channels and the reasonable inventory control are the keys to the quality of technology. For day traders, the monitoring of capital flow, technical analysis and short-term execution are the key. So for different types of investors, the focus of technology is different.
2, risk control-seize the rope of the transaction
The risk control here refers to the integration of risk control (stop loss and take profit) and position control. Trading (investment) without risk control is tantamount to gambling. When the market is not conducive to your trading, if there is no risk control, or if the risk control is not done well, the consequences will be unimaginable, and even your funds will be wiped out.
Since the trading direction cannot be 100% accurate, stop loss is a necessary risk control barrier for wrong trading behavior, which can prevent disasters and end the original wrong trading. On the other hand, profit-taking can preserve the fruits of victory and avoid profit-taking to a great extent. Futures/spot is a highly leveraged market, which requires position management, so that your losses can be as small as possible and your investment can be defended.
The correct rate of some investors' trading is still relatively high, but because of refusing to admit the stop loss in the wrong trading, the loss is huge, far exceeding the profit obtained from the correct trading, thus the overall trading has obvious losses. Sometimes, the futures/spot market will experience extreme fluctuations due to systemic risks, such as continuous ups and downs. At this point, if you trade in the opposite direction to the market and hold a heavy position, you may face the risk of short positions. And if the principal loss is exhausted, there is no chance to make a comeback.
If the risk control is done well, the rate of return will retreat in a relatively small range, and the rate of return will increase steadily, which is particularly important for futures/spot asset management products.
3, mentality-the key factor in holding positions.
Many investors have encountered many situations, such as taking profits prematurely, the price soaring in the original trading direction after a small loss stop loss, and the continuous loss in intraday trading is afraid of placing orders. These "mentality" problems plague most investors. And ordinary investors also attribute the reason to bad attitude.
In fact, the quality of mentality has a certain relationship with the "technology" and "risk control" mentioned above. First of all, you are afraid of opening positions (because of the large losses in the early stage, you begin to have fear) because you don't have a good technology to support your transaction. Secondly, how much position control involves risk control. Thirdly, the "re-judgment" of futures/spot prices in the process of holding positions actually belongs to the process of combining "technology" with risk control. Therefore, a certain proportion of mentality is actually influenced by technology and risk control, and the other part is attributed to investors' own psychological quality, values and implementation principles.
In short, technology, risk control and mentality should be combined with each other and unified. Only in this way can the transaction be truly in a sustained and stable profit state.
If you want to stay in the financial market for a long time, teachers must have a complete trading system, including position holding skills, risk control and technical system, so that they can give you clear guidance in the volatile market, even if the profit is small, but it is very relaxed and fulfilling; One-sided market can make you have a trend in your heart. If you look at it correctly, try to maximize profits. If you are wrong, you can control the risk objectively and adjust your thinking, so as to turn losses into profits according to the trend, instead of blindly insisting on your own thinking, blindly adding reverse codes and putting your position on the edge of risk.
When the water is full, it will overflow; When the moon is full, it will be lost; People will be stupid when they are complacent; Those who escape from reality are even less ideal in the future; The market will be washed away; Only the strong will remain elegant and the market will be changeable; It has become the norm to go against the mainstream. According to the introduction of Tengbang Fortune Live Room under Dongzhao Capital, when many people are bearish, it may be that bulls are coming, and the rapid conversion of long and short is always unprepared. The transformation of power is only at that moment, trading.