Simplicity in Trading Comes From Simple to Complex and Back Again

The first stage of Dao Zhi Jian is a novice introduction. Are you a leek? If your transaction is based on the following three methods, it must be leek.

First: Trade based on the good or bad news released.

Second: Analyze order transactions based on so-called expert teachers.

Third: chase whichever one rises, and trade according to the market list.

These three situations show that you are not controlling your own account, but are dominated by market news and emotions, and you have changed from an investor to a gambler. In the recent market correction, whether you want to eat meat or eat noodles, it all depends on you. For example, if it is in an upward channel, the volume and price are rising, no matter how bad the conditions are, it is better than no conditions.

When the transaction reaches the following second stage, it is still far away from the road to simplicity.

The first step: If the target is not in the opportunity pool, whatever you see or hear, do not do it.

Step 2: Clarify your entry conditions, write them out in very clear text, and stick them in the opportunity pool next to the computer. If you meet the entry conditions, enter decisively. If you do not meet the conditions, no matter how tempting it is, you will never enter.

Step 3: Stop loss, stop loss, stop loss. Say important things three times. Any order must be accompanied by a stop loss condition. If you cannot find the stop loss area or the stop loss is too large, you will never enter the market.

Step 4: Never use a full position in fund management, because you cannot be 100% correct, and it is best not to lose more than 2% of your account each time.

Step 5: Strictly implement and avoid casual trading, otherwise no matter how good the trading system is, it will be of no use to you. Plan your transactions and trade your plan.

Finally: Greatness leads to simplicity. Some people say this sentence every day, but in fact it is of no use. We have seen many experts dominate the world with one moving average, or read the market with naked K, and then say that simplicity is the way to go. It does not mean that simple things are effective. Simplicity is the appearance you see. Many price action traders, including myself, have grown up in the same way. They used indicators to piece together a trading system at the beginning. The more they learned, the more they put together, and the system became more and more complex. As the learning deepened and the more they understood, all the indicators were removed one by one, and the board became simpler and simpler.It's simple because you understand the main idea behind it, and you don't need too many complicated tools. If you ask people who are really good at naked K, who doesn't understand indicators? They not only know the usage of indicators, but also the calculation logic of indicators, applicable scenarios, advantages and disadvantages.Ask those people whose screen is full of lines, how many of them know how these lines are calculated? When you know the underlying logic, even if there is no line on the board, you can draw the line in your mind instantly if you are willing. This is called simplicity.