People often ask me about the secrets of trading, believing that once they master these secrets, they can unblock their meridians, become invincible in trading, and make a fortune.

In fact, trading is not much different from taking the college entrance examination. At the beginning, one uses a strategy of drilling through a vast number of problems, learning all kinds of knowledge, practicing with problems, reviewing, and correcting mistakes. Eventually, the knowledge becomes more integrated and condensed into some essence, which is a process of returning to simplicity from complexity, also known as the great truth being simple.

After truly achieving stable profits, you will find that trading essentially consists of two major components: trading skills and trading psychology.

Trading skills are what I referred to earlier as the strategy of drilling through a vast number of problems. If you learn enough knowledge, review enough, and have sufficient practical experience, your trading skills will naturally improve. However, the difficulty in trading is not in the skills, but in the trading psychology.

So today, I will break down the most important "three hearts" in trading—patience, attention to detail, and caution—and explain them in detail, hoping that you will gain some insights.

Advertisement

1. Patience in Trading

In practical trading, most people lack patience.

In my early days of trading, when others asked me to review and practice with simulated trades, and to persist for half a year or a year, it seemed like a fantasy to me, who was eager for quick success.

I tried many methods and found a trading strategy with a 90% success rate. After implementing it for half a month, the results were very good. I showed this strategy to an old friend of mine who also traded, and he immediately dismissed it, saying that it would be difficult for me to make a profit.

At that time, I was disdainful and even increased my investment. However, two months later, I directly blew my account, my trading strategy became ineffective, and I lost a large sum of money.Later, I followed his advice and engaged in long-term backtesting and simulated trading, only to find that this strategy might only be suitable for the market conditions of that half-month. In unsuitable market conditions, it could lead to prolonged losses, shattering your confidence and potentially causing emotional breakdowns and margin calls.

Backtesting and simulated trading are extremely tedious tasks. You have to repeatedly test, adjust, and persist, without the thrill of actual trading. All that's left is the monotonous tedium of candlestick charts.

However, it is this patience, drop by drop, that allows you to find your own order in the chaotic market, test your strategies, build your trading confidence, and feel the rhythm of the market, thereby making your trading outcomes more certain.

Moreover, I've noticed that in trading, many people can understand the market conditions but lack the patience to wait for the best entry point.

I previously discussed a high-probability trading opportunity in an article.

After a significant rise or fall, when the market stabilizes and forms a top or bottom oscillation with the potential for reversal, and if a fake breakout in the direction of the trend occurs, luring in more buyers or sellers, it presents the best trading opportunity.

A friend who read this thought the method was good and tried to operate accordingly, but they lacked the patience to wait for the right point and missed out on profits.

In the chart, after a continuous decline, a consolidation formed with a horizontal support依托 at 1936. If this consolidation pattern breaks downward in a fake breakout, luring in short sellers before reversing, it would be an excellent opportunity to go long. Once the market breaks through the descending trend line indicated by the blue arrow, it's time to enter.

Although such opportunities are good, they are rare. During this continuous decline, he missed many large retracements and didn't make any money.

As a result, his patience was gradually worn away, becoming more and more restless. After all, the higher the probability of a reversal in a falling market, the more anxious one becomes.When the market dropped to around 1940, it began to consolidate horizontally. Fearing to miss the opportunity to make money, he entered the market prematurely without waiting for a fake breakout. Everyone can see the subsequent trend.

The market broke downward through the consolidation support at 1936 and quickly bounced back, forming a fake breakout that lured shorts.

Due to his aggressive entry at that time, the fake breakout triggered his long position's stop loss, resulting in a loss of 500 USD.

After the fake breakout, when the downtrend line was broken, he placed another order. However, because of the previous loss, he was very anxious. The order made a profit of 500 USD, just making up for the earlier loss, and then he hastily closed the position. As a result, he missed a significant profit as the market rose by more than 300 points afterward.

He clearly understood this technical method but still couldn't make a profit, which is the consequence of impatience.

That's why I emphasized the importance of reviewing and practicing with a simulated account before. It allows you to understand what kind of process and outcome this technical method will produce in the long-term overall market. If you have experienced it all, you won't have such a great fear of the unknown, right? Can it help you to patiently persist?

Many people also feel very painful, guilty, and self-blaming for their wrong trades, so the next trade becomes even more impatient, and they are even more eager to make money, thus entering a vicious cycle. Therefore, patience is extremely important.

Patience can also be deliberately practiced.

If you are usually an impatient person, you can engage in more activities that test your patience, such as reading, writing, jogging, etc., and patiently persist for a long time to form a habit.

In trading, you can extend your trading cycle, increase the waiting time, reduce the trading frequency, lower the trading position, and lower the profit expectation. Then you will find that your mentality begins to improve, forming a habit of "absolute waiting," and then slowly increase the frequency and position.I have always emphasized that when making transactions, one must not focus solely on personal satisfaction, as satisfaction indicates a loss. When you patiently wait, although it is very uncomfortable and grueling, our satisfaction should not be in the process of trading, but in the outcome of the trade. The true satisfaction comes from consistently making money, that is the real thrill.

2. Attention to Detail in Trading

I have noticed that 90% of the friends who follow me are male, which means that most of us are like me, rough and ready. Men are naturally more rugged and less meticulous.

In the early days of my trading, I often made mistakes in operations, which is very taboo and not worth it at all.

Let's all think about whether we have ever placed a wrong stop loss or take profit order due to carelessness? Have we ever missed a technical standard and placed the wrong order? Have we ever used the wrong position size due to carelessness?

Once, when I was dining out and placing an order on my phone, I had a good trading opportunity for gold. The hourly chart's candlestick closed well, but the dinner table was noisy, and someone was urging me to drink. So, I hastily placed an order and put my phone aside.

After a while, when I opened my phone and saw that gold was doing well on the chart, my mood instantly brightened. However, when I opened the position page, the position was in red, and I was instantly alarmed. Upon closer inspection, I realized that instead of going long on gold as I should have, I had mistakenly gone long on crude oil. Crude oil was falling at that time, and I lost over 2000 US dollars. I couldn't even eat my meal and immediately stopped the loss.

The feeling at that time was a mix of emotions. If I had done gold correctly, I could have made over ten thousand, but instead, I lost over ten thousand on crude oil. The loss and gain added up to more than twenty thousand, all because of my carelessness. I really wanted to slap myself twice.

The most painful thing in the world is when you have the right direction, your technical skills are fine, but you lose money due to a careless mistake in placing an order. It's so unfair!

Achieving profits in trading is already a difficult task. We are like children without love or care, suffering from the merciless market, with suppressed moods and impatient emotions, which is already very challenging. Finally, losing money due to our own carelessness and making elementary mistakes is really a double blow.Do not underestimate these minor mistakes; sometimes they are not just about financial losses, but also about the devastation of a trader's confidence. The trading techniques and the habits of executing a trading system that have been painstakingly built up may be completely undone due to one moment of carelessness.

It's like building a tower of blocks that is about to succeed, but with one careless hand tremble, it all collapses, and starting over is extremely painful.

How to be meticulous in trading? My method is to develop the habit of checking multiple times.

1. Before entering a position, confirm that all the technical criteria required for the order entry have been met.

2. Before entering a position, double-check the variety and position size in the order opening menu to ensure they are correct.

3. After placing an order, in the position holding menu, confirm the order again, including the direction (long or short), position size, and set the stop loss and take profit.

4. After setting the stop loss and take profit, check them again.

5. If it is a pending order trade, after each order is placed, it is necessary to check the order point, direction, and position size to ensure they are correct.

6. Before turning off the computer each time, check all orders again.

7. Keep the trading computer desktop and the chart settings of the trading software simple and clear, which is more conducive to our meticulous trading.Details determine success or failure. In transactions, being able to carefully handle every aspect of the transaction and making fewer elementary mistakes puts one ahead of many in the market.

3. Vigilance in Trading

Vigilance is actually a form of self-protection behavior, not just for humans but for all animals as well.

Vigilance is an excellent quality in trading because the financial market is extremely powerful. In its presence, we can only look up to it, comply with it, and cannot confront it.

Therefore, having a sense of reverence and vigilance towards the financial market and the trend of the market will instill in us a sense of risk awareness. Only then do we understand how to restrain our human desires, strictly implement stop losses, and tread carefully in every transaction, which is the true way to make money.

In trading, I have set for myself the "Three Precepts" to share with you.

1. Avoid Greed.

The greed inherent in human nature is essentially ingrained, and it is infinitely magnified in trading, which is also the root of our mistakes.

The desire to make a lot of money leads to heavy positions in trades. As a result, when the positions increase, the psychology to control heavy positions is not yet mature, making the trades cautious and fearful. When we make a profit, we can't hold on to it, and when we lose, we are reluctant to cut our losses, leading to a pattern of small wins and big losses.

The desire to make even more money leads to looking at many varieties, wanting to capture the big profits of trends as well as the small fluctuations of consolidations. Trading becomes a rushed affair, wanting everything and trying to grasp everything, and in the end, achieving nothing.Here is the translation of the provided text into English:

There is a metaphor that the profits in trading are like sand in one's hand; the tighter you grip, the quicker it slips away. With trillions of transactions occurring daily in the financial markets, countless tales of wealth seem to float in the air, giving the illusion that a little bit for oneself could lead to financial freedom.

But don't forget, the financial market is a zero-sum game; you have to snatch meat from others' hands. If your greedy demeanor is laid bare before the hunter, it's like being the bird that sticks its head out, ready to be shot down.

In the trading market, we must be the lurking hunters, not the birds that stick their heads out.

Rein in your greed, only lurk for opportunities you can handle, and earn the money you can make, that is enough.

2. Guard against arrogance.

A friend once told me that sometimes when he was on a roll in trading, he would get cocky as his profits grew. He would start to trade with heavy positions, only to suffer significant losses after a few wins. After the losses, he would become cautious again, trading with light positions, in a cycle of repetition.

In trading discussion groups, some traders would flaunt their profitable trades, basking in the envy of others, feeling smug inside. But when they suffer losses, they would disappear without a trace.

Sometimes, after flaunting too many times, they might even subconsciously believe they have never lost, blocking out those painful moments, and eventually losing all their money.

In reality, short-term profits are nothing to be proud of. In my early days, I too often lived in my "glory moments," betting big and making tens of thousands of dollars in one go.

But trading is not a one-time event; you will do it hundreds, thousands, or even tens of thousands of times. Stability is what truly matters.Every small profit is worth a moment of joy, but it should not become the capital of your pride. Instead, it is the accumulation of profits bit by bit, persisting even in the face of losses, and ultimately achieving overall profitability that is truly the time to take pride.

3. Avoid regret.

Many people live in regret when they trade.

They regret why they didn't open a position earlier? Why couldn't they hold on to more profits? Why did they have to make this trade? They knew they shouldn't have traded, why can't they go back in time? And so on.

Now that we have engaged in these trading behaviors, what we need to do is reflect, not regret.

We should reflect on where the problems with these behaviors lie, what kind of losses they have caused, and how to correct them, rather than living in endless regret.

I have seen many traders who, as soon as they start, cry to me, saying they are too regretful, regretting making so many mistakes, regretting having traded. All I can do is sigh deeply, as I can't help them in any way.

Because the only one who can truly help oneself is oneself.

Only by truly recognizing one's own problems and correcting them resolutely can one have a place in this brutal world of trading. Many people can't do it, and no one else can help.

So, is trading difficult? Not difficult. Refine your skills, maintain your mindset, and making money will come naturally.It's said to be difficult, for the inner demons are hard to dispel; some people are trapped in their own inner demons for a lifetime, unable to break free. Only through self-reflection and self-correction can one see the full picture of the transaction and achieve true victory.