The legendary woman who was reborn from the ashes
Chapter 42 From the Great Road to the Simple
How simple can a simple trading system really be when it comes to trading masters? Many people may have heard of this term, but few truly understand its meaning. If you have not experienced the baptism of losses, and have not experienced the process of continuous learning and trial and error, it is difficult to appreciate the true meaning of this term.
My understanding of "the great way is simplicity" has three levels. First, it is simple thinking.
In trading, do not pursue perfection, just seize the market that you can grasp and earn profits within your ability.
Secondly, simple desires. Don’t pursue overnight wealth or be greedy for huge profits, but insist on long-term steady progress and accumulate little by little.
Finally, the simple method. Knowing that the simplest method can often capture the market the fastest, there is no need to look for complex trading systems or magical indicators, but to accept the ordinary trading system and possible stop losses.
How simple can this simple trading system be? For example, a trading system may only need one moving average or one Bollinger band. But it is the most difficult to execute, because although the trading method is simple, the human psychology is complex.
There is a story in the financial market from the book "Trading Rules for Returnees". The author of the book taught his simple trading method to a friend and told him that he must strictly follow it in order to make a profit.
However, when the trading system made mistakes 17 times in a row, his friend could not bear the pressure and chose to give up. As a result, shortly after he gave up, the market ushered in a big wave of market, and the author made a profit, but his friend missed the opportunity.
Why are the results so different when executing the same trading system? This is because the author has 100% confidence in the trading system and has verified its effectiveness through practice. However, his friend, who has never experienced consecutive losses, lacks confidence in the trading system and eventually chooses to give up under market pressure.
Therefore, the real trading masters are not because they have complex trading systems or magical indicators, but because they have simple and effective trading methods, and have firm confidence and perseverance to implement them. In trading, simplicity is power, and simplicity is not only a concept, but also a state of mind.
When exploring the mysteries of the trading field, he lacked the indispensable trading mentality. Faced with the unpredictable market, fear tightly entangled him like a shadow, resulting in his inability to act decisively at critical moments.
Although I have studied many trading indicators on the market and have conducted in-depth research on both simple and complex trading systems, I have been repeatedly frustrated in actual combat.
The Returnee Trading Rules sound like a breath of fresh air in the trading world, and their core concept is simple and clear. However, behind this simplicity lies an extremely high level of execution difficulty.
When the market goes against your expectations, continuous stop losses come like a tide, and your account retreats sharply without you noticing. At this time, can you still keep a calm mind and continue to stick to your trading system?
From a psychological perspective, those who seem simple-minded actually desire embellishment and filling deep in their hearts, while those with complex minds tend to pursue simplicity. This special psychological need for simplicity is particularly evident in the trading world.
Many traders like to pursue those seemingly simple but extremely powerful trading methods, but often find in the execution process that the simple methods are not so easy to execute.
So, how should we deal with such a dilemma? The answer is to establish a simple, balanced and suitable education system. Such a trading system should not only lead us to success, but also maintain a moderate intensity in the process of testing our mentality, so that we can continue to grow within a comfortable range.
Your trading system is like a sharp sword, and your mentality is the hand that controls the sword. Only when the sword and the hand are perfectly integrated can you be at ease in the trading world.
To achieve this goal, you can try to filter the trading signals, such as optimizing the trading signals through multi-indicator resonance or large and small cycle resonance. In this way, although your trading system is slightly complicated, it is easier to execute.
"Breakthrough entry" is like the climax of a dance, which allows investors to enter the market decisively when the trend breaks through and seize the opportunity to make profits;
"Entering the market during a pullback" is like the transition part of a dance. It allows investors to find an entry point when the market pulls back, which can not only avoid the risk of chasing highs and selling lows, but also capture the continuation of the trend.
Moving average, this invisible baton, has a force that cannot be ignored in the eyes of traders. It is not just a simple line, but also a weather vane of market conditions. When the trend of the large level is like a spring breeze, the K-line on the small level chart is like dancing petals, gently touching or crossing the moving average, forming a golden cross or a dead cross, which is the entry horn in the mind of traders.
It should be noted that the large moving average is like a steady dancer, responsible for controlling the rhythm of the entire dance, while the small moving average is a nimble dancer, providing traders with accurate entry signals.
On the stage of trend analysis, the 3-stroke structure is like a carefully choreographed dance, leading the ups and downs of the market. When the large-scale trend surges like a tide, the "up-down-up" or "down-up-down" structure on the small-scale chart seems to tell traders in its silent language that a new dance is about to begin and now is the best time to enter the market.
Pattern analysis is a visual feast in the financial market. When the large-scale trend is as satisfying as a staple food, the pattern breakout on the small-scale chart is like an exquisite dessert, bringing extra surprises to traders.
Double tops and bottoms, rectangular consolidation, head and shoulders pattern... The breakdown of these classic patterns is like opening a door to profit for traders.
The trend line, that seemingly simple straight line, carries countless secrets of price movements. When the trend at the large level is like a long mountain range, the trend line break on the small level chart is like a stream in the mountains, pointing out the direction for traders to move forward. When the price breaks through the original trend line like a wild horse, it means that a new adventure is about to begin.
In short, pursuing simplicity does not mean giving up depth. In the field of trading, only when you truly master the balance between simplicity and depth can you remain invincible in the ever-changing market.
The art of trading is not to seek the ultimate complexity, but to discover the power in simplicity. You have a trading system in your hand, which is not a magical weapon dropped from the sky, but a sharp sword honed by your blood, sweat and sweat.
You have devoted years of review and research to it. Every trading decision is like the dance of a sword tip, precise and powerful. Over the years, you have simulated trading more than 300 times, and every rise and fall has given you a deeper understanding of this system. You have participated in actual combat and experienced the ups and downs of the market, but it has always brought you stable profits.
Such a system is the source of your confidence. You know clearly that this system can point you in the direction of the ever-changing market, and you don't need to be afraid of temporary losses. Because you know that this is just part of the transaction and you must face it for long-term profits.
When your trading system is correct continuously, you are calm because you understand that it is the effect of the system, not luck. When the system is wrong continuously, you will not feel scared because you have counted this situation and know that it is just a short adjustment of the system, not the end of the world.
You understand your trading system and its degree of decay, which allows you to always maintain a reasonable position when trading. When the system suffers a loss, you have a bottom line in your heart, knowing that it is only temporary, so you can hold the order steadily and not be shaken by market fluctuations.
This is the true meaning of trading. It is not about pursuing the ultimate simplicity that is out of reach, but about finding the trading method that suits you best and can best balance your mentality. We are all ordinary people. What we pursue is not some profound Taoism, but stable and continuous profits.
Therefore, I would like to say that having a proven profitable trading system is the key to your success. The real success is not the myth of getting rich overnight, but staying calm and rational in the market fluctuations, and moving steadily towards the goal. This kind of trading is the real art.
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