In 2010, on the eve of graduation, with no plans for the future, I was solely focused on making quick money, which led me to enter the financial trading industry. Since then, it has become the main theme of my career.
2010: Just started, continuous losses leading to a margin call
At that time, I knew nothing and joined an investment consulting firm for an internship. With a bit of experience in virtual trading, I disregarded my teacher's advice and invested all my savings, equivalent to 1000 US dollars, into the market. A month later, I declared bankruptcy.
Summary: At this stage, my skills were poor, and my mindset was even worse. At the beginning, I might have followed advice to enter the market with a small position, but I operated based on feelings, rarely making profits. Occasionally, when I was lucky, I might have made profits for several consecutive days. At this time, I usually entered the market with a large position, which resulted in a margin call, leaving me full of regret. For different people, this process usually happens repeatedly.
From 2011 to 2012: Profits and losses, with more losses and continuous margin calls
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My teacher once said that one is considered a newcomer in the market for the first three years. I finally understood that making money from trading is not difficult, but making a stable profit is not easy. Therefore, I started reading books, such as "Short-term Trading Strategies" and "Masters of Trading" to accumulate knowledge.
Summary: At this stage, I learned from the previous lessons, made some progress in terms of skills, and had a certain level of analysis ability in the fundamentals, feeling that I could understand the market rules slightly. The profitability of trading also improved to some extent.
However, at this stage, my skills were still immature, my ability to analyze the fundamentals was relatively insufficient, and my mindset had not been adjusted. With the increase in profits, my poor mindset made it easy for me to neglect capital management and enter the market with a large position, ultimately making it difficult to "end well."
From 2012 to 2014: Profits and losses, continuous margin calls but overall profitableAt this point, I left the investment company and began to explore on my own. The frequency of margin calls became more frequent, but I quickly made a comeback.
Summary: In this phase, the technology had become relatively mature, and my fundamental analysis skills had greatly improved. I was able to control myself most of the time. However, my mindset was the result of pressure rather than spontaneity. So even if the proportion of profitable trades was larger, a single impulsive heavy position could bring me back to square one, or I could lose most of the profits. After a significant loss, I would remind myself to exercise self-control. For traders, this tragedy may be a recurring cycle.
Now, I can professionally distinguish platforms and suitable trading types, and discern a trader's mentality, risk control ability, and fund management level from their trading records, rather than judging solely by profits. At this time, my account has achieved a level of doubling in one year.
Summary: In this phase, my mindset has been able to go with the flow, calmly waiting and screening opportunities, and entering the market only after a clear analysis, calmly looking at gains and losses, and relatively fixedly controlling positions. It means that I have formed a fixed trading model and system. From then on, I only need to adhere to the principles and operate completely according to the trading system to achieve stable and continuous profits.
After years of trading, I have some insights, and the following suggestions are for your reference.
1. Trading is a grand activity
In my view, only those who can easily understand the monthly, weekly, and daily charts can be said to have found the thread in this complex trading market.
I believe that the monthly chart is sufficient to indicate the most macro trend and has a good indication for large-scale bull or bear markets. Reading the monthly chart is a basic skill that every trader must have.
The daily chart is usually considered the best chart to indicate short-term trends. The weekly chart is between the monthly and daily charts, playing a connecting role. The trend of a trading product over a period of time can be reflected in the monthly, weekly, and daily charts, and these charts must be strictly corresponding.II. Trading is a Meticulous Activity
Both a macro perspective and an attention to detail are equally important. The ability to analyze macro trends or medium to long-term trends is as valuable as the ability to analyze micro trends. Details determine success or failure. When using leverage, especially high leverage, holding positions for the medium to long term often becomes impossible, as the lack of margin will eventually force you to "surrender"!
I believe that the relationship between long-term trends, medium-term trends, short-term trends, and micro trends is as follows: their directions may be the same or opposite. When the directions of micro trends, short-term trends, and medium to long-term trends are opposite, as long as it is not the end stage of the medium to long-term trend, the micro and short-term trends will generally end and turn to comply with the medium to long-term trend.
III. Trading is a Skilled Activity
When traders have mastered trading techniques, possess a mature trading system and philosophy, and can execute trading decisions and implement trading rules without difficulty, trading becomes a skilled activity, and the trader becomes a highly skilled craftsman.
Mature traders simply follow the buy and sell signals issued by the trading system and skillfully handle each transaction. This is the experience and lessons learned from multiple failures. Take me as an example, before establishing my own trading system, I spent nearly ten years of precious time and more than 500,000 yuan in tuition fees, and went bankrupt twice. I hope you will not repeat the same mistakes.
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