An interesting phenomenon in the financial market is that many investors often make a lot of money in simulated account operations, but suffer huge losses in real accounts. There is no change in the trading environment and trading products, but why are the trading results so different? The answer is a distorted mentality.
There was once a master who trained his disciples like this. First, he asked his disciples to jump over a river, and every disciple could do it easily. Then the master replaced the river with a cliff of equal width. Although the difficulty did not increase, no disciple dared to try it.
Similarly, since the simulation of the financial market does not require any responsibility and there is no concept of profit and loss, investors will treat it with a normal mind and dare to try various trading opportunities. This operation method has a great chance of success and will gradually make profits over time. However, when trading a real account, due to the fear of losses, they will be indecisive and miss many good trading opportunities. After making money, they will breed risk aversion and always want to leave the market as soon as possible to prevent the risk of reverse market fluctuations, making it difficult to hold profits to the expected target. On the contrary, when losing money, most investors will breed risk preference and have a fluke mentality, hoping to hold on until the market rebounds or pulls back to get themselves out of the trap. This profit-seeking and harm-avoiding mentality is doomed to losses in the trading process of the financial market.
Therefore, the trading in the simulation market is like the river we are facing, which we can easily jump over, but the trading in the real market is like the cliff in front of us. Although the difficulty of crossing is equal to that of the river, our mentality has undergone a drastic change, which makes the final result of the transaction very different. Therefore, the improvement of the mind is better than any professional knowledge. In the process of trading, we should cultivate our firm belief, look for trading opportunities, set take-profit and stop-loss, and then leave the rest to the market, because how much money we make is determined by the market, and how much we lose is determined by ourselves. Only in this way can we examine our own transactions with an objective attitude and improve our trading mentality.