Trading is not an easy path to tread, for the path of trading is also the path of self-cultivation, only the venue for cultivation is not in temples, but in the marketplace. The typical growth process of a trader can be characterized by a statement from the "Analects of Confucius": "At fifteen, I had my mind set on learning. At thirty, I took my stand. At forty, I had no doubts. At fifty, I knew the mandate of heaven. At sixty, my ear was an obedient organ for the reception of truth. At seventy, I could follow what my heart desired without transgressing what is right."
Every advancement on the path of trading is not an easy feat, and there is no set time that can serve as a reference standard. In general, it is about training hard and sweating more, so as to bleed less on the battlefield. In the initial learning stage, try not to be impatient and restless, although this is against human nature. Try to put in more effort at the beginning, study carefully, think seriously, practice more, and summarize comprehensively, which will surely save you a lot of detours in the future. Don't go to the battlefield with confidence, only to find out that you don't even understand the principles, structure, performance, and usage of the gun, the outcome is predictable.
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1. Face failure head-on, everyone will take detours on the road to success!
Whether in life or in the trading process, success and failure are always intertwined. Only one team can win the game, only one tennis player can win the championship, and the essence of sports competition is always filled with failure. However, how you interpret failure will determine what will happen next.
No competitor will pursue failure wholeheartedly, but the elite realize that failure plays an important role in their pursuit of greatness. Failure highlights your technical and psychological weaknesses. It can make you realize how much you desire success, giving you more motivation to invest more time and energy to further cultivate your skills.
Jordan also experienced six consecutive playoff losses in the early years of his brilliant career, but these failures did not stop him. Instead, they continuously propelled him forward. In the end, he used what he learned to break through difficulties and won six NBA championships, becoming the greatest basketball player. Those who pursue the highest level will not shrink back from failure; they accept the role of failure in helping them become better and progress.
Although success in trading may not be as polarized as winning a sports championship, maintaining the correct mindset towards failure is equally important, even when you are rebuilding your capital or reputation. On the contrary, if you are afraid of failure, your interpretation of failure must be lacking. It doesn't matter whether you have failed in the past. The question is how you should view it now.
Failure has a different meaning for every trader. For some, failure only means not achieving the set goal; for others, failure defines them. The fear of failure is not necessarily a bad thing; it may give you incredible motivation to work hard and do everything possible to succeed; it can also make reckless traders manage risks reasonably.
But this does not mean that everyone can accept failure. Some people's thoughts about failure are towering, and the fear brought by failure makes their minds always tense, thinking collapses, and they overthink their decisions in the trading process. Only trade when you feel perfect, make excuses for any small mistakes, and get entangled in losses and missed opportunities. You may freeze your thinking when the position plummets, only thinking about controlling losses and how to avoid doing stupid things; or worse, you panic and sell when you lose, and watch the position rebound to your target. For traders with this problem, the fear and pressure brought by failure will make them closer and closer to failure itself.Due to the widespread nature of this fear in trading as well as in general performance, many existing pieces of advice are written around this issue. You should have heard such advice: "Pursue small victories," "Embrace failure," "Failure guides us to success," and "Learn from it and move on"... These are all accurate and logical. However, if there is a hidden, undiscovered flaw behind your fear of failure, then these suggestions are not as useful.
2. Trading systems are not simply copied but tailored for oneself.
Although trading is an art, it is even more a rigorous science. As a qualified trader, all trading orders and subsequent trading results should not be disordered and without rules. Simply put, facing any point in the market, traders should clearly know whether this point can open a position for trading? Is it a long position or a short position? What proportion of funds should be opened? How much should the stop loss be set? Is this an intraday trade or possibly a daily trade? These questions should not be uncertain and indecisive when seeing the market situation. Thinking about these questions during the market and being at a loss is a sign of disorder, and disorder leads to confusion, which is definitely not satisfactory in terms of trading results.
The key to solving the problem of disorder is to formulate a detailed trading system, allowing all details about trading to be properly considered, then carefully review and test, improve rules, and become familiar with rules. A senior fellow once said: "Most psychological problems are not really that one's mentality is not good, but the trading system is too rough and not delicate enough, so the result of trading is more losses than gains, so how can the mentality be good?"
The "Tao Te Ching" says: A superior man hears the Tao and diligently practices it. Formulating a trading system that suits oneself and takes into account all details is a time-consuming and laborious task, requiring hard work, more review, more thinking, more recording, and more summarizing. After all, everyone's personality, knowledge, background, and family are different, so there is no universal formula or holy grail in the market that allows all traders to easily profit according to the map. The first thing to understand is that not everyone is suitable for trading. A person's failure in trading does not mean that they are not smart or not excellent. The founders of Long-Term Capital Management were all top smart experts and scholars, including a Nobel Prize winner in Economics, but they also failed in the capital market in the end, right? So we must know that trading failure and leaving the market in disgrace is not a shameful thing, at most it only indicates that one is not suitable for this profession.
Verifying whether one is suitable for trading is not a one-day job, often requiring years of hard work and considerable funds to "pay tuition fees." In this process, there are traders in the market who succeed through various methods. We should learn from these successful people, especially the thoughts and techniques of masters like Charles Dow, Jesse Livermore, and Richard Schabacker, but we also need to practice in trading, combining our own characteristics to tailor a trading system suitable for our own temperament.
Remember, no matter how much we learn from the master's techniques, we cannot become another master. The reason why masters become masters is that they all have their own thoughts, and then create techniques suitable for their own use based on their own thoughts. In the process of trading, it is necessary to reflect on oneself in time, through one's own correct, wrong, impulsive, calm, beautiful, and ugly trades to see what kind of person one is, and on the basis of fully understanding oneself, it is possible to objectively formulate a trading system that suits one's temperament according to one's strengths and weaknesses, play to one's strengths, restrain one's shortcomings, and use one's strengths. In this way, one can master the "weapon" that suits oneself and fight in the capital market.