Thinking about an analog exchange

Thinking about an analog exchange

• The Mindset

  Many traders are very fond of simulations, and they seem to have a good reason: without the psychological pressure of doing simulations, you can often make money, but in the real world, real gold and silver are involved in real trading, and the mindset when you place and exit the order is completely different, so it is not worth mentioning making money in simulations. If you have this opinion, you are very wrong.

  An obvious logic is that a strategy that is argued to be loss-making in the simulation is certain to be loss-making in the real world; conversely, a strategy that can survive profitably in the simulation disk will be profitable in the real world. Of course, if the mindset and control of money management are not good, it will still be loss-making. But through simulation trading, the feasibility of the strategy can be demonstrated, not so much that the strategy is ground in the real trading disk with real silver to bring a loss of funds; that is, if we want to try a trading strategy, the best way is to eliminate the influence of other factors, merely considering the feasibility of the strategy.

  But as an ordinary trader, we often have to face the reality of how to do the right thing and persevere in the process of doing the learning simulation: you need to be with a group of people who seem to study and work hard every day, but have no income, face to face with the expectations of their own family, see other people working more or less steady income every day, and their own daily income is 0, but don't forget, 0 is better than negative!) Over time, even the closest family members will have an opinion about you, how can you do the right thing and persevere?

  We also find an interesting phenomenon in actual trading: you don't necessarily learn the strategies for success even if someone tells you everything. Trading is a process of practical action, which involves many details of trading, not just reading books. There are many details of trading and puzzles, which are discovered slowly and realistically in constant practice.

  Of course, it's important to remember that successful simulations don't mean you're going to make money in the real world. But if you don't, you're not going to make any money. You're going to have to make a small amount of money in the real world and then slowly increase the amount of money. But you have to face your own mental breakdown point, whether it's a loss or a profit. That's where you end up making money.

  Of course, in the course of the simulation, if you are a person with a heart, you will experience much more than the simulation itself. I love to play Master of the Ring online. Every time the score breaks, it always triggers a lot of my thoughts. The nature of the transaction and the game are no different.

  • 1, Fund management, the maximum loss ratio of a single investment cannot be greater than 5% of the total capital.

  • 2) Give up uncertain but promising trading plans. Learn the winning hands (with a particularly high probability, over 80%).

  • The goal is clear: not to entertain but to add value to the score.

  • 4, If the link is lost 3 times on a single place, change the table.

    Do you know the final result? The game ends with a maximum of 80,000 cards, and the game ends with 50,000 cards.

• The experience is unusually profound:

  • First, learn to stop yourself.

    The difference between active and passive stopping is too great.

    • A. Positions are overweight, causing unacceptably large losses;
    • B, the scale of the decline has reached a level that you cannot bear;
    • C, no score (bankrupt), lost the game qualification.

    I'm obviously a passive stop, not a completely active stop. In fact, it's like trading.

    • A. After the war, take this time to summarize the past and relax.
    • B, the transaction is not going well, maybe it's just that the market is not in line with your trading strategy.
    • C, simply tired. Or there are things at home that can not concentrate on the transaction. Perhaps you would say, what if the wave below is a big market? That's not mature enough, and successful traders don't rely on one or two entry points.

  • Secondly, we are unconsciously changing our goals.

    At the beginning, my goal was clear, and at this point, I wanted him to grow. But after reaching a certain score, I thought I had moved away from the worries and reminders of survival, which I thought was the original goal, but in fact had changed dramatically.

    A. I've been lucky enough to win a lot of points in a small probability event, like a good hand and a lot of points in one go. It's the smallest payout, the biggest payoff and surprise. It's like winning the lottery. I'm sure most traders will be happy with this. It's in our memory that we always have the option to remember this, and it can happen again.

    B, heroism and contentment. Like the feeling of the local master, when you defeat all the opponents, the inner heroic bond suddenly bursts, like the ancient master warrior. You even fantasize about the lonely and defeated realm. This strange emotion will want to continue to be the landlord. Unfortunately, even if you are at a higher level, you are no longer useful if you do not get a good pair of cards in the game, you are no longer at a higher level, losing cards are already a sure thing.

    C, experience stimulation. Most traders have experienced several large-scale trades that bring rapid growth of funds. Mental activity tells itself, "I'm going to be big this time, and then I'll be big according to the rules". The result is: "I was born with a death wish". Tasted the sweet spot, how many people can stop?!

    This also includes increasing the position after each successful move. At the same time, the person has a psychological resilience, which is an insurmountable barrier. The size of this resilience is related to the size of the overload, which is really hard to say. The increase in volatility and R (the risk of a single trade) varies greatly. The beginning is always unsuitable, and the withdrawal is also larger than before.

    Of course, all of this has nothing to do with the market or the signage, it has to do with your own heart. The market is simple, it is based on the system.

  • Third: What is a market?

    It is patience to wait for each good card, with obvious characteristics and recognition ((some say it is the movement of the board calmly heart, some say it is the graphic formulation of certainty) ‒ the rest is to wait and give up. In this process, the most easy mistake we make is: sometimes there will be several beauties in the abandoned trading opportunity, for the trader is to miss a noticeable profit behavior, so we begin to reflect on our system.

  • Four: Why are there so many losers in the game?

    A. Transaction costs, while seemingly insignificant, are not a zero-sum game, with large amounts of transaction fees flowing out of the market every year. B. The tendency to self-destruction and failure. The causes are complex, including the above-mentioned uncontrollable desires, heroism, luck (lottery) psychology, doing what feels right but wrong. C, the truth is there, but many people do not believe in it and prefer to take shortcuts. D. The long road between doing and thinking. Underestimating the long process of practice and practice. E, without a teacher who believes in you. The process of learning is long, you finally walk through it, and you discover that the truth is clearly written there, you just practice it. Without a teacher, you can walk for many years on a path. F. Ignoring the effects of negative emotions on oneself, including happiness assessment systems, sense of identity, etc. Too much negative emotions accumulate and cause mental and physical failure.

This is what I thought from the simulation, hopefully you will get something out of it after you see it.

Translated from the Tibetan Book of the Dead