Category: Money tips Release Date: 2006-09-04
Trading psychology is very important to many people the root causes of loss attributed to: poor mentality. Simulation trading is generally easy to secure a firm offer can be once you start trading situation would be quite different. Loss followed to see if the right did not do, do not hold, a mistake was made, it did not just stop because of hesitation, but, when the approach appeared afraid, with a total fear of the wrong and so on and so forth are numerous, all these are related to transactions related to state of mind! Mentality is whether the transactions are ultimately the key to effective implementation can be said that you have to do all the efforts around the exchanges eventually need a good mind to implement, can stop in time, can make the profit growth will also depend on the full state of mind! To maintain good trading mentality is every investor pursuit of the goal, I think that should do the following aspects:
One, good money management is the foundation
Good money management is to maintain a stable basis for trading mentality. Investors hold large positions Crimping shoulders the burden as a pedestrian, a slight obstacle on the road is enough to make it fall. The fundamental reason is that his position for him, has become a burden beyond his endurance. So why do investors beyond the scope of his ability to do transactions? Because of the desire of profit it can not correctly judge himself, he has plunged into the trap of being profitable. Lured by the aura of profit, he has seen a loss of trap. Trap losses are generally in the dark, but profits shine, as investors entering large positions later, he will immediately find the trap full of loss, desire to approach the good moments before being crushed by market fluctuations, he will find that the market was far from gentle as he had imagined at this time, profitability has become the desire of his disaster, a large number of positions has become a huge burden on fund management, caused by improper exposure to the mentality of problems began.
I personally believe that good financial management should pay attention to three points:
1, the market spent most of the disastrous situation. When the market is catastrophic situations, such as circuit breakers Quotes to running the way, your loss is not enough to affect your financial account continued to trade capacity, which is a special case.
2, in normal circumstances, you can only do what you can afford to lose the transaction, your loss should be within the carrying capacity you can. Therefore, the use of funds can be the size of your stop-loss amount is based on the largest, but can not calculate the expected profits.
3, the size of your use of funds and your trading capabilities to be combined. Transaction capability can use the larger proportion of funds, or you'll think you are too small and the mentality of poor profitability; while poor investors who trade the best a little more cautious, otherwise, your loss would exceed the capacity of your imagination and make your mind chaos.
Fund management is just the basis of good trading mentality, but far not all. I personally think that a good deal to keep the key is to correctly understand the mentality of a loss, this is the most critical.
Second, a correct understanding of loss is the key
Refusal led to a loss of trading the underlying causes of bad attitudes! Loss is a normal transaction, losses are bound to emerge. Profit and loss as people left and right feet, the success of profit and losses by profit formed. The composition of trading profit and loss, no one can split profits and losses of the portfolio, the market does not exist only the profit or loss transactions. The key is to regard the loss of the vast majority of investors, to treat the transaction as an error that the loss was their mistake, and thus repeatedly asked his accurate analysis and forecast the market, thereby reducing the number of stop-loss. However, the market simply can not predict the losses as investors look wrong can never be out of the fear of uncertainty on the Quotes, Quotes of the perpetual state of uncertainty so that investors jittery state of Jin, played very hesitant, stop-loss is more is not decisive, even if no matter how good money management will not dare to make mistakes because of fear of an effective implementation of the trading scheme, and thus the loss of trading opportunities.
What is a loss? A loss of trading profits just to pay the price that must be just, is the normal cost of seeking opportunities for profit only, any profit must pay the price! Any industry are so! A loss is a normal phenomenon! Loss does not mean you are wrong, but only on behalf of your profit increased costs. The loss as the error term investors will lose confidence in the transaction because the losses will always occur, leading to loss of confidence is the root cause of poor trading mentality. I never do not think a loss of transactions is wrong, I never do not require their own accurate forecasts the market, I just continued to look for trading opportunities with the stop-loss, I know to find an effective opportunities for profit will continue to arise before I stop. Unwilling to accept the inevitable loss of people is to ask themselves must be able to accurately predict the market, he is always afraid of doing wrong! Afraid of the wrong mentality will inevitably lead to bad! Wrong is not terrible, terrible is a not insist! Simply impossible to accurately predict the market, which will lead to investors caught in the confusion of desire and reality difficult to balance the mind. Right and wrong can not be judged by the profit and loss, but by the quality of profit and loss to judge. Quotes made out against the then stop, it does not mean you have done something wrong, but rather shows you do right, you should tell yourself: "Oh, what should I pay the cost of the" rather than blame themselves: "how I was wrong again the case? "; and Quotes in doing so they earn a little money out of that on the surface to see you a profit, yet you have a real wrong! Only by seeking opportunities for profit losses as the cost to treat you will not fear a loss in order to calm acceptance of a loss. Only be able to calm acceptance of a loss of your trading mentality if they are not a result of market uncertainty can not be stabilized.
Magnitude of losses by the fund management to control, you can not loss of unrestricted laissez-faire development. By this time, fund management, began to play its role.
3, focus on stop-loss, non-profit is to consider measures to
To do two things at the front, you will still be profitable trading mentality is difficult to calm the impact of desire. The desire to profit all the time surging in our hearts, we are also profit-seeking purpose of the transaction. This desire will be the same as the ants scratch in our hearts so that we worry about the outcome. Our mentality as price fluctuations will be good times and bad, bought a total want the price to skyrocket, selling a total want the price to fall all the way, this eager desire for profit will lead to your own mind disturbed. The market will never go according to your mood! In fact, in the transaction only thing we can control only their own stop-loss, while the profitability will not listen to us at the mercy of it, because the market is unpredictable. We can only do what we can do, and we must strive to do what we can do, and do a good job we can do, and you the things will come. Stop pegging can do is do our work because we can control the stop-loss; if pegged to profits or market, you do not control themselves and grasp things, the pursuit of things that would certainly fail to grasp your mind can not grasp. After that we just stare at stop-loss approach, as long as the price of less than a stop-loss point, we have been held, should not be too concerned about the fluctuations in concrete, and too concerned about the volatility will cause fluctuations in your attitude is also non-stop. Stop-loss is relatively static, with the controllability, controllable nature of the stop-loss will enable us to maintain a good frame of mind. There will be a proverb: Let the profits take care of themselves! Very insightful! When you just stare at stop without taking into account profits, as well as what factors can to make your mind to lose? Stop-loss does not consider pegging the profit is not the pursuit of profit, but rather the pursuit of profit is the best method, because profit is naturally out of it is done right after the patience to wait out positions, rather than deliberately seeking and frequency of transactions created, This is the source of profits. Risk Management Well naturally the profits will come! ! Maintain a good state of mind must cooperate fully with the above three aspects, we must first correctly understand the loss, frankly accepted the loss, and then by the fund management to control losses, the final stop with the peg does not consider the implementation of the profits go to the specific transaction. To maintain good trading mentality is a systems engineering, not simply good financial management will do.
