A seven-step strategy for stabilizing your trading mindset

Step 1: When trading, it is inevitable to worry about losing money after buying. In fact, even high-probability judgments made by trading experts also have this expectation. This situation is inevitable, but the terrible thing is not to lose money after buying, but there is no principle of controlling losses. Therefore, it is necessary to set a stop-loss strategy. After each transaction loss reaches x% or falls below a certain reference indicator, it will be resolutely executed unconditionally, so that the problem of losses will be solved under controllable circumstances. Step 2: With a stop loss, you don't have to worry about the risk being uncontrollable, but you can't worry about making a profit. Moreover, after continuous stop losses, the old capital will go to a large part. Seeing that the stop loss is not profitable is the most worrying at this time. The countermeasure at this time is to improve the quality of the transaction and then improve the success rate of the operation. To improve the success rate of the operation, we should find the critical turning point of the fluctuation, that is, some entry points where the fluctuation is most likely to run according to the current trend for a period of time. (This is the core of all chart analysis. Maybe everyone has their own methods and reference indicators, but the principle is the same).

Step 3: Increase the success rate, don't worry about continuous stop losses, start to worry about earning less, especially missing the big market. The handling fee plus the difference between the two ends of the stop loss, the cost of one stop loss is higher than the theoretical calculation, so if the profit is not enough to make up for the loss when winning, or the profit is small, it is uncertain whether it can be profitable for a long time. The strategy at this time is to try to expand the profit when making a profit. If you can catch the big fluctuation, then the small stop loss will not hurt a few.

Step 4: Learn to wait and start to successfully catch some big fluctuations. I am not afraid that I will earn less when I make money, but at the same time there are more winning and losing trades caused by waiting. These losing trades not only affect the mood, but also waste time and energy, and have obvious negative effects on the overall trading results. The countermeasure at this time is to use the motto of "never let profits turn into losses" and wait and see when the floating wins fall back into the vicinity of the price.

Step 5: There are fewer lost trades, but there are more big market missed because of the draw and exit. Overall, it seems that it is better to use the stop loss for those missed big waves. At this time, the countermeasure is to give up the motto of "never turn profits into losses" and use stops to expand fluctuations. Further research to improve the placement of stop loss points, and at the same time find out some conditions that can continue to wait for the profit to fall below the bid price. (Note: If there are too many conditions, the system will become unreliable, and there is a trade-off problem)

Step 6: Most of the specific problems have been solved, and the next thing to worry about is how effective and how long will this method work? The countermeasure at this time is to implement your trading system on the historical chart of the past ten years to verify the modification. By doing more than 50 transactions with the system in the future, you can achieve a stable implementation of the system principles without market interference.

Step 7: The system can execute stably, and the overall trading results are statistically positive. At this time, they are not worried about the results of a single transaction, but have the confidence to win as a whole. But there are still new problems. The worry is that once the market changes in a certain nature (such as cyclical changes, changes in the operating style of the main force), the stock market will change and the system will suddenly fail. At this time, the countermeasure is to know how to welcome the old and the new, because the stock market is a place that changes forever, and there is no way to win undefeated. In particular, technical analysis is a follow-up operation. The only thing to do is to maintain a state of awe for the market, check the principles of your trading system at any time, and update your strategy after confirming that there are new and special changes in the stock.

The above-mentioned seven-step strategy is the psychological barrier caused by the technical problems faced by the establishment of a systematic trading method. In practice, the closer you are to the stock market, the more you will be affected by various other factors, such as market atmosphere, the main force's entry and exit, the volatility of the news, and the sawing of the market, all of which may make a trader unable to withstand psychological pressure and give up using the studied system. Therefore, if you can maintain a hesitant mindset during operation, pay more attention to the system and pay less attention to the market, and realize that the stock price is not moving, it will be conducive to the stability of the mentality.