Principles that make traders, not gamblers

A lot of people think they are traders, but when they feel like they can play roulette in Las Vegasforeign exchange marketWhen trading also has high expectations, they are really more like gamblers. The difference between a trader and a gambler is actually similar to the difference between a casino and a gambler. Richard Weissman (Note: Renowned developer of trading systems, trainer of trading and risk systems, author of "Casino Trading Strategies", "Mechanical Trading Systems" and other books) once said that trading should be like a casino, and this way of thinking can really help traders make profits.

The advantages of casinos

Why are Las Vegas casinos so large and prosperous, where the vast majority of gamblers are losing money? Casinos have a statistical advantage over players. The more someone tries to win at the casino, the more likely they are to lose. There are limits on how much to bet on each game, so players can't double their bets all the time to win money, and casinos also have controls on the size of the bet to ensure that the risk they take is within their tolerance. Casinos don't risk losing business and profits. They limit their bets to ensure that no matter who wins, it won't have a big impact on their income statement. Casinos have huge transactions, and this advantage always makes the casino the ultimate beneficiary under the control of the size of the bet.

Another advantage of the casino is that it has no emotions. The casino doesn't care about any player, let alone whether the player wins or loses. On the contrary, gamblers have a variety of emotions. They want to win money, and they want to get back their money after losing money. Therefore, they usually keep placing bets, especially when they lose money, they will bet bigger and bigger, hoping to win back the lost money, but in the end, they just lose worse. And gamblers also have an unbreakable oddity, that is, after winning money in a row, they will not leave with the money, but choose to continue gambling, either become arrogant, or place a bigger bet, or make a random bet until they finally lose. In short, gamblers are doomed to lose money.

Principles that make traders, not gamblers

1. Trade based on the probability of profit, rather than the potential profit.

2. Consider your own account, trade small positions, and don't let your account take too much risk of losing money.

3. Plan your trading, don't trade emotionally.

4. Only engage in advantageous transactions, and never trade based on the opinions of others.

5. Trade based on quantitative details rather than subjective assumptions.

6. Make transactions after thorough investigation, don't be ignorant.

7. Choose the right position to trade, always prioritize risk management, and profit comes second.

8. Avoid any transactions that could lead to losses, and don't rush for quick success.

9. When making transactions, it is necessary to be principled and not to suddenly change the trading method after consecutive profits or losses.

10. Only trade in the present, without prejudice to trading based on previous profits or losses.