The so-called trading system is a set of strategies honed through observation and practice. Without a strategy, if you just go in and fight recklessly, advancing without retreating, you will eventually be knocked out by the market. Even with a strategy, victory is not guaranteed, as your self-created martial arts are far from those with a lineage.
My approach to algorithmic trading is the same. Any strategy has a certain probability of winning at a certain scale. The key to victory is not the strategy itself, but finding the current weakness of the market and attacking it with the corresponding strategy.
I have a question: At the beginning of a game of chess, both sides are evenly matched, so why is there a winner and a loser in the end?
Under the rules, the weak should play the role of a turtle, hiding its head to preserve its strength and wait for the right moment. The strong should strike the weak step by step, waiting for the opponent to make a mistake, and then relentlessly pursue and attack. This is the art of the game. As for the fatal moves like "double cannons checkmate" or "horse behind the cannon," masters understand them but do not deliberately pursue them.Pursuing techniques deliberately will inevitably lead to falling into the trap of the market. Most people are caught up in techniques, not realizing that the mind method is more important. Most people think that speculating for free money is a fortunate thing in the world, but they don't know that it is a contract with the devil.
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Now, being entangled in the trading system, one day you will think about the meaning of life and what money really represents. Once the realm is improved, any system or not, it is just a floating cloud.
It is difficult to make a profit in trading. Even if you can make a profit for a period of time, you are always on pins and needles. When you lose money, you will think whether the previous profit is due to good luck, whether you will suddenly be unable to make a profit or continue to lose money until the position is blown up. I think this problem will always accompany me.
It is precisely because every step in the future is unknown, although it cannot be completely controlled, trading still makes me yearn.
Why do we think we can't make a profit? Because there is too much uncertainty here, and we can't control it at all. We can't explain the reason for every profit, as if it is a coincidence. Every loss seems as if we can predict it, as if it is taken for granted.Why? Because that's human nature. We fear uncertainty and fear losing. But the foreign exchange market precisely requires us to pay the price of losses, trying to find certainty in uncertainty, which is against human nature.
So, every time we place an order, we feel uneasy and fearful. When we suffer losses, we stubbornly resist the losses, and when we make profits, we quickly take the money and run due to fear of uncertainty. Don't say you don't know these things; even if you know, it's useless. What can you use to resist human nature?
You are the one trading, are you using technology to fight against human nature, against yourself? Believe me, you will be driven crazy. To fight against human nature, you can only rely on faith, firmly believing that there must be certainty in uncertainty.
In my view, this certainty is supported by faith. When you suffer losses, you won't hesitate, because you know it's just a cost to be paid, and it can't hurt me. When you make profits, you won't feel uneasy because you know this profit is what I deserve after paying a lot of prices, and it's not luck; it will appear sooner or later.
Of course, this faith is not just about looking and talking; it also requires continuous attempts, constant review, constant thinking, and verification to let this faith penetrate your heart, making it a thinking habit, using it to fight against human nature during trading.But this is not a one-time solution. When facing the market, I still have fear and unease because the market is just too powerful, and there is still much that I have not experienced.
However, I think having this kind of reverence is not a bad thing. Belief can combat the fear and unease in human nature, but it cannot combat arrogance and greed. To combat the latter, one must always maintain a sense of reverence for the market.
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