Hey, friend, welcome to the third lesson of the practical series!
It's been a month since the last update of course content, and I've been busy building my own quantitative trading program, which is now available for observation on Binance's copy trading page.
In the last lesson, we turned on all the lights at the table, seeing clearly those giants, market makers, and project parties hidden in the dark. Do you feel a bit 'overwhelmed'?
Don't worry. This game of trading has never been 'retail vs market makers', but rather 'past you vs present you'. Your biggest enemy is never others but that emotional, undisciplined self.
Every trader who can ultimately survive in the market and even achieve stable profits was once the 'retail investor' who chased highs and sold lows 'by instinct'. Their transformation was possible because they fully experienced the four essential growth stages.
Today's lesson is a 'Trader Upgrade Map'. You will see your current position in it, find the upgrade bottleneck, and avoid the fatal mistakes that 90% of beginners make.
The Four Realms of Traders: Which level are you at?
Looking at these four stages, do you feel a sense of familiarity?
Level One: The 'Gambler' by Instinct (Unconscious Incompetence)
This is the starting point for all beginners and a disaster area for 'retail investors'.
State: You don’t know that you don’t know.
Behavioral Characteristics:
Decision-making by instinct: No strategy, buying solely based on 'I feel it will go up'.
News-driven: Spending all day in groups, asking about the 'wealth code', chasing various positive news.
Outcome-oriented: If you make money, you think you are a genius; if you lose, you blame the market makers for crashing.
Outcome: You are the sweetest 'nourishment' at the table, catching the waves when the giants pump, and contributing stop losses when market makers spike. At this stage, losing all your money is just a matter of time.
Level Two: The 'Believer' in Search of the Holy Grail (Conscious Incompetence)
This is the most painful and longest stage for beginners.
State: You know that you don’t know.
Behavioral Characteristics:
Crazy learning: You begin to realize that 'instinct' is unreliable, so you cram all the technical indicators you can find.
Misuse of indicators: You set the K-line chart to various colors, MACD, RSI, KDJ, Bollinger Bands... trying to find a '100% win rate' perfect indicator, which is the 'Holy Grail of Trading'.
Frequent trial and error: You use method A today and lose; immediately switch to method B tomorrow and lose again. You fall into a death cycle of 'learning leads to losses, losses lead to learning'.
Outcome: This is where 90% of people give up. They become exhausted because they cannot find the 'Holy Grail', ultimately leaving in despair, concluding that 'techniques are useless'.
Level Three: The 'Craftsman' Who Follows Discipline (Conscious Competence)
Congratulations, if you can get through the second stage, you have arrived here. You are beginning to understand the essence of trading.
State: You know that you know.
Behavioral Characteristics:
Simplicity is the ultimate sophistication: You have discarded 90% of indicators, leaving only the core few (like naked K-lines, moving averages, and trading volume).
Accepting losses: You no longer pursue a 100% win rate, but understand the 'positive expected value' discussed in the first lesson. You begin to see cutting losses as a 'necessary cost'.
Building a system: You start to construct your own trading system (like 'only trading daily level breakouts', 'only taking 2:1 risk-reward opportunities'), and force yourself to execute repeatedly like a craftsman, day after day.
Outcome: You start not losing money, even making small profits. But you are still very tired because every operation is accompanied by a huge struggle with your own 'inner demons'.
Level Four: The 'Trader' Who Achieves Unity of Knowledge and Action (Unconscious Competence)
This is the highest realm of trading.
State: You don’t know that you know. (Because discipline has become instinct)
Behavioral Characteristics:
Trading cost ability: You no longer need to consciously 'follow' discipline because discipline has become your muscle memory.
Emotional separation: Opening positions, cutting losses, taking profits, for you, feels as natural as breathing. You watch the fluctuations in your account, feeling no waves inside, focusing solely on 'doing the action correctly'.
Outcome: You no longer care about individual gains or losses, only the system’s long-term positive expected value. You have become the calm 'professional player' at the table, and the market has become your ATM.
The three deadliest 'roadblocks' for beginners
From upgrading from level one to level three, the biggest obstacle is not intelligence but human nature. The following three mistakes are the most common for beginners in the second stage and are the fundamental reasons they cannot upgrade:
Holding a position (not cutting losses): This is the number one killer for beginners. After buying in, when the price drops, you are unwilling to 'admit your mistake' and cut losses, instead fantasizing that 'it will come back'. The result is that small losses become big losses, big losses become liquidation. (Please review Lesson 7 of (Beginner's Course) 10 times!)
Overtrading: You feel itchy if you don’t look at the market for a minute, wanting to chase after a slight increase in K-line and buy the dip after a slight drop. You always want to catch 'all' fluctuations, resulting in frequent trading, and your capital is entirely contributed to fees and the 'spike' by market makers.
Pursuing a 100% win rate: You cannot accept losses and always want to find that 'perfect' entry point. You spend a lot of time 'predicting' the market instead of spending time 'responding' to the market (developing a risk control plan).
Ending: Your upgrade journey starts now.
Alright, today we have completed this 'Trader Upgrade Map' together. From 'Gambler' to 'Believer', then to 'Craftsman' and 'Trader'.
The growth of trading is essentially a practice of 'de-retailing'. The purpose of this practice is to eliminate those emotional, instinctive, and undisciplined 'retail habits' from yourself.
In this lesson, I would like you to discuss in the comments:
In comparison to these four stages, which level do you think you are currently in? What is the biggest 'bottleneck' you have encountered? (Is it holding positions? Is it overtrading? Or is it searching for the Holy Grail?)
Facing yourself honestly is the beginning of the upgrade.
Seeing the path of growth clearly, and knowing the big pitfalls along the way, in the next lesson, we will officially enter 【Module Two: Master Your Toolkit】. We will start from the most basic K-line and truly learn how to 'understand' the language of the market.
If this map has clarified your path ahead today, please be sure to like, bookmark, and follow! This upgrade path is destined to be lonely, but I am here with you! See you in the next class!
(Disclaimer: The above content is only for sharing trading knowledge and does not constitute any investment advice. All trading involves risks, the market is volatile, and caution is needed when entering the market. Please ensure proper risk control.)
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