Some netizens asked me if I had read Zen Theory. Some said it was very useful, but they just didn't learn it, while others said it was useless. I said that it was recommended everywhere on Toutiao, so it was impossible not to have heard of it. But I had never used it, nor had I read or studied it, so I didn't know and didn't dare to comment.
The formation of each method is summarized and concluded by the author based on personal experience and subjective understanding.
The difference is that those that can have a greater impact must be well-written and well-packaged. This is the same as the various trainers on the Internet. Those who can have an impact must be eloquent, full of temptation, and the packaging must be relatively good. Otherwise, you will not be able to attract many followers.
Since it is a set of things summarized by others, it must have value. As for whether the method is good or not, this is a false proposition, because if you use it well, you will say that the method is good; if you don’t use it well, you will say that you didn’t really understand it and didn’t really follow it. In the end, you don’t know whether it is good or not.
Don't make the transaction too complicated, or you will get yourself dizzy.
Do you think the wave theory is good? Of course it is, because it explains the principle of price fluctuations very clearly, but it is not suitable for actual trading, only for analysts. Why? It is too complicated. There are so many waves, and there are medium waves in the big waves, and small waves in the medium waves. In actual practice, you can try to draw and count various waves and see how long you can persist.
Of course, what I said above is not the theme. The theme I want to talk about is: you are doing actual trading, not an analyst, so don't make trading too complicated.
The more you classify each transaction link, the more technical analysis procedures you use, the more variables the transaction will generate, the more complicated the transaction will become, and it will be difficult to get effective feedback on the transaction results. This is the result of some method authors or you personally wanting to study all the market details clearly.
But the actual result is: the more complicated it is, the more variables there are, and in the end you will give up because you cannot meet your expectations and you can't stand it.
You must remember that you are a frontline fighter, and you must be concise, practical, steady, accurate and ruthless on the battlefield!
Trading practice should be concise, and the most important things should be grasped in the method
Here, based on my personal understanding, I would like to make a few suggestions for your reference.
1. Regarding the trading method system. To simplify it, it only needs to include four aspects: direction, entry, position, and exit.
2. Regarding the rules of the method system. For each of the above four aspects, the most concise rules are given. Concise rules mean that the basis and standards are given, and the possible variables are minimized.
3. The core direction of all rules. The rules you formulate must have a core focus and direction, so that they can be simplified. And this core direction is what the previous article said. The goal direction of your rule formulation is: the number of points and positions when you make a profit should be greater than the number of points and positions when you lose money.
4. Core direction and key objectives. Since the goal of rule making is to focus on: the number of points and positions when making profits should be greater than the number of points and positions when making losses. What is the focus of this core direction? The key is to focus on the three aspects of trial entry, confirmation of adding positions and moving stop loss in the method system and rule making.
Simplify the final goal: test entry, confirm increase in position and move stop loss
The reason why the final simplified goal is to focus on testing entry, confirming position increase and moving stop loss is to achieve the ultimate goal of trading: to maximize profits and minimize losses. Even if you don’t have a so-called trading system, just focusing on these three points is enough to make a profit.
1. Test entry: In the entry condition setting rules, it is best to have a test position for each position. Testing is like throwing a stone to test the water.
2. Confirm and increase the position: In the entry condition setting rules, the entry of each position must have a trial confirmation standard based on the trial order, and the position must be increased immediately once confirmed.
After a wave of consolidation, define the strategy according to the trend cycle. If it is strong, continue to test and confirm the increase in position when it is sideways. In this way, if you are lucky and encounter a good one-way, you will accumulate a large number of positions in the early stage and get enough points.
3. Moving stop loss. The moving stop loss here is not a passive stop loss. It is a stop loss formed after the position is increased. If the position is increased, the previous initial stop loss point must move with it. This is a necessary measure to protect the position. It is also a necessary measure to reduce risks.
Let's take a look at the current round of GBP long practice, testing, confirmation and moving stop loss
This round of long positions on the pound began on June 12. For the analysis and decision tracking of the actual entry at that time, please see the article on long positions on the pound a few days ago. At the beginning, the strategy was defined as a weak long position, and then it changed and was defined as a 4-hour strong position.
The following is the entry of the 30-minute entry cycle of the British pound starting from June 12, and the stop profit point was directly hit yesterday. Of course, there is no perfect countermeasure for the exit link, because the right exit choice will give up part of the profit.
Try from 1, stop loss at A - add position at 2, move stop loss at B - try again at 3, confirm again at 4, move stop loss at C - confirm again at 5.6, move stop loss at D. (There is no try order at 5.6 because the sideways movement is too close to the entry point at 4, and the position will be repeated if we try again)
The position size is not indicated, but generally the risk is tested at 1% in each place and confirmed at 2%, with the total risk not exceeding 3%.
The long orders of British Pound have increased significantly, which means that as long as you do it, you will always have a good time. And this is the time to open up profits. Because the failure of the trial order and the confirmation order often occurs during the transaction, especially the failure of the trial order, so the stop loss is very important at this time, and the position size at different positions is also very important.
Finally, let me summarize: look back at your trading methods and rules to see if they are too complicated; if so, simplify them! The core directions of simplification are: testing the market, confirming the increase in positions, and moving the stop loss.
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