How to Navigate the Trading Maze to Reach Maximum Profit?
In the quiet of the night, clarity sometimes strikes. Trading is like a maze with numerous paths. If you enter driven by certain interests without a higher perspective, you might find yourself making money. However, over time, you'll realize the market becomes increasingly complex, causing you to get lost and unable to extricate yourself.
In such a high-risk trading market, there are only winners and losers, no experts. The market changes, and the essence of investment philosophy is to lose small amounts and win big, trend trading, and risk management—these are eternal themes.
Trading, in essence, is about trading yourself, your own personality. They say character determines destiny. In life, if you don't fully understand your strengths, weaknesses, and personality traits, it’s extremely difficult to succeed in trading. Why? Because trading techniques and risk management can be learned and imitated. But even if you master these methods, upon entering the market, you'll find it a place of great temptation. The actions you take will differ greatly from what you've learned, causing you to get lost in the trading maze.
Therefore, to succeed in trading, you must understand and surpass yourself. The cost of self-awareness in the trading market can be very high, and it's often only through losing money that you realize who you are.
So how do you navigate out of the maze?
After countless failures in the market, you must have the confidence to persist in learning and trading. There is an overseas psychologist who mentioned the 10,000-hour rule, which holds great truth. He claimed that in any field, to reach the top level, you must spend 10,000 hours learning and thinking. In trading, this often means many years of discipline, averaging five hours a day. Be patient and resilient.
As a speculator, understanding the market and choosing the right trading methods begins with setting clear goals. Once goals are set, maintaining a controlled mindset becomes easier. With clear objectives, you form a systematic approach to market value judgments, strategies, and risk management. Establishing these elements allows for a clear step-by-step execution.
Step One: Aspiration—Medium to Long Term
Reflecting on the words of Ming Dynasty philosopher Wang Yangming, "Without clear aspirations, no great matters can be accomplished. Even technical skills must have a foundation in aspiration." Having clear objectives and aspirations is the first step out of the trading maze.
Livermore’s ultimate insight was: money is made by sitting, not trading. This translates into using medium to long-term moving averages for decisions.
This principle embodies the ultimate, unparalleled strategy in financial markets. It is pure and unadulterated wisdom. Understanding this requires exceptional intelligence and extensive practical experience. For 99% of people, it remains elusive throughout their lives. Fighting against medium to long-term moving averages in any K-line cycle leads straight to failure.
“Money is made by sitting” is the cornerstone of financial trading. It underpins every technique for making money in the markets.
The golden rule “money is made by sitting” is destined to accompany all successful traders throughout their lives. Those confused about trading fail to grasp this principle.
Step Two: Patience—Directional Indicators
Trading is about patience—waiting for the medium to long-term moving averages you chose. It's about persistence—remaining steadfast in your chosen principles regardless of temporary setbacks. Trading is like a crocodile hunting, waiting quietly and patiently for the right profit. In other industries, indecisiveness may succeed, but in the brutal financial market, it’s extraordinarily difficult, no matter how talented you are.
The popularization of K-line analysis will only accelerate its mutation, especially in major market segments. The market has its intelligence, forcing most people to lose money, predicting short-term chaos but medium to long-term order.
In increasingly mature markets, small K-lines and large moving averages will dominate. Moving averages will always hold a supreme position as the primary trend indicator.
No matter how powerful your capital, manipulating K-lines or short moving averages cannot challenge the significance of medium to long-term moving averages. Only by following them can you gain maximum safety and profits. This is an indisputable mathematical truth dictated by human nature's greed and fear.
Step Three: Commitment—Systematic Trading
Absolute commitment to your chosen medium to long-term moving averages is the ultimate and most elegant tactical operation. Over an extended period, this tactic is unbeatable. It embodies the essence of trading. Only a successful, driven person can understand this. Quietly wait for your moving averages, understand and adhere to the path of the market. Trading is about comprehending and striking when the market aligns.
In my view, if you cannot afford to lose, you cannot hope to win.
In my operational philosophy, complete dedication to your chosen medium to long-term moving averages is essential for success.
Short-term moving averages cannot handle the required fluctuations. Relying on them is as futile as falling in love with an actor. Adhering to medium to long-term moving averages is crucial as they pave the way for successful trading.
Profits require time and stability. Continuous profits cannot endure repeated stop losses. Uphold your trading principles as steadfastly as you would your life.
To gain, you must let go. Abandoning incomprehensible and tumultuous markets allows you to steadfastly observe and execute clear and understandable major trends.
The art of trading is inherently flawed. Perfectionists are doomed to suffer. Denying perfection clarifies the philosophy of trading.
Compared to short-term moving averages, medium to long-term moving averages’ fluctuations are smaller, simpler, and more manageable. The philosophy of gain and loss must be carefully understood and experienced.
For profit, sometimes you must adopt a laid-back attitude. Seeking perfection only complicates operations. Simplicity is key. More complex indicators increase the difficulty and likelihood of failure.
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