Speaking of the game of trading: trading is a game of losers, and the person who can withstand the loss is the biggest winner! What is a game of losers, is the first to lose, who will win the game! In this game, you can't control anything except your own position!
A position must be assumed to be false before it can be proven to be true.
This assumption is in itself backwards. I'm building a position, I'm definitely building a position on the assumption that I can make money or have a certain foundation, and I'm buying with the assumption of course that I'm right. I'm selling if the trend doesn't match the forecast or stop loss on the back market.
The book explains it this way: in a game of losers like a trade, we start the game from a position hostile to the crowd, assuming we are wrong until proven right, rather than we not assuming we are right until the point is proven wrong.
The positions that have been established must be continuously reduced and cleared before the market proves that our trades are correct.
The principle of holding: we hold when the position is not proven correct, we do not have time to wait for the market to prove you wrong before we hold. The correct holding method is to hold when the position is proven correct. Let the market tell you that your trade is correct and you hold it.
If my position is not proven correct, I must clear the position to reduce my risk. Don't wait for the market to tell me that my position is wrong, if it is not proven correct, I should clear the position.
Survive first, before holding, consider the worst outcome. Think about what to do when the worst happens. Be prepared to lose.
In a word, open positions, which are not proven correct by the market, should be considered to be downgraded or cleared, instead of waiting for the market to reach its own stop loss price!
Learn to code! This is the only way to make a profit.
Rule number two is that long lines work, short lines don't.
The advantages of rule two: first, it allows me to maintain the correct way of thinking, which is to constantly reinforce a correct position; on the other hand, when the position has been confirmed as correct, one should strive for a heavy position, this is undoubted; and third, to avoid frequent operations.
How to increase stock?
Firstly: you must in any case only start with a light position, so that you have the ability to increase your position at least twice when the market trend develops according to your expectations. Secondly, the position should be increased gradually, according to the expected price changes, until the position is full.
Secondly, there must be a deal plan.
To bet correctly means that you must have a qualified plan in place so that you can reasonably increase your chips when the trend is confirmed. Whether the method of betting is reasonable depends on the time frame of your trading plan.
If you don't have a way to correctly rate your profitable holdings, you may never recoup your losses. Rule Two: Guarantee that when you trade correctly, you have a large percentage of your holdings.
A trend trader will double down at least once on a breakout. The method of carding must match your trading plan.
If you can control your losses within a very small range instead of winning a little bit every time, you will be the best trader!
If you really want to make a living trading, you should add more chips to your profitable position. Otherwise, you can only save money.
When the market moves in your favor, you must have a concrete plan to increase your chips. You must be clear that you cannot decide the size of your position yourself, this should be decided by the market, and only by the market.
Instead of trying to control the market, you should control the position, because this will simplify your trading, but also increase your trading ability, because once you know your expected goals, you can achieve them at the time of trading.
Building a warehouse is like building a house, one step at a time. But if there is a problem with the foundation or drainage in front, then you should not continue building.
All you need to do is remove the market's influence on you and not let the market control your position or your mood.
You should not clear your position when the market is going to prove that it is the right one, so that you are as likely to make a mistake as you are to make the right decision. If you have proven that you are right, of course you should continue to trade.
Most traders are in a hurry to clear positions as soon as they prove the position is correct.
There are no long lines, only positions that are converted to long lines.
What the market tells you depends on your own thinking.
It is not a bad thing to make mistakes, you can only learn from them and profit when you do the right thing.
Long-line trading, light positions are the key to success, first build a small position and then actively strike at the right time. Small can grow large, if you build a relatively large position at the beginning, one day in the process of trading will shrink back to small.
Many traders have a problem with over-trading. It's wrong to always think about making a lot of money in trading, which can make me lose badly. Understand that trading results and trading success rate are not related.
At the same time, ideas only have meaning if they are transformed into habits of action.
Trading is a loser's game, and the amount we want to lose is controlled within a relatively small range, which is the most important direction in trading. There is also the right time to place a position, adding chips to the right position. As for the setup, more time depends on our instincts formed in the future, not the rules.
We should not assume that the market is not always right, especially when the market is not very active. At this time, we should be suspicious of all signals and wait for further signals.
We should pay full attention to the negative effects of market inactivity, in the case of extremely active markets, with a very high volume of trading in three days, we should clear our existing positions and on the day after a very high volume of trading, we should immediately clear half of our positions, and then clear the other half in two days. After that, we should wait for further signals to prepare for the next possible build-up.
The timing of the settlement is obvious after the advent of the trading day with the extreme volume of transactions. Although the market often rebounds, our move to clear must be very profitable.
The first half of the third rule states that when transactions are scarce or in a dead market, one should be suspicious of all signals and wait for further signals.
High turnover may be the prelude to further decline, and knowing this, we can use the highly active market to our advantage.
When the market is extremely active, it is at this time that the trend may reverse, because after this stage, the buyers have already bought. After that, definitely reverse, for the subsequent re-pull, that is the next opportunity.
For speculation, the vast majority of trends are flat from a long time period. If you have always bought a stock with the idea of a stockholder, you are basically sitting in an elevator. Speculation, the essence of which is volatility, because the price is determined by people's expectations, and the expectations are the future, and what the future is, who can predict so accurately?
Speculative markets, because of the participation of people, when the law is discovered, it is when the law fails, because the groups involved are constantly learning to evolve.
How do you get a grip on the momentum? If science fails, you have to rise to a higher level, the level of philosophy, to get a grip on the whole.
Translated from the German by: