Develop Good Trading Discipline

1. Follow the trend: never plunge to the bottom, never touch the top.

  • (1) the best evidence that the market is going to start rising is that it is already rising; the best evidence that the market is going to start falling is that it is already falling.
  • (2) Only open positions in the direction of the medium-term trend, and only go long or short when the averages are aligned long, and only go short or short when the averages are aligned short. The market will never go up to the point where you can’t buy, nor will it go down to the point where you can’t sell.

2. The species.

  • (1) only participate in high volume, good liquidity varieties, do more on the strongest (do not feel that its price has risen very high and choose to fill up), short on the weakest (persimmon to pick the soft pinch
  • (2) at the same time hold a position of no more than three varieties.
  • (3) Do not have a variety of preferences, any variety is just a symbol. Profit potential is the only criterion for species selection.

Translated with www.DeepL.com/Translator (free version)

3. Timing.

The thing to do now is to do nothing

Only trade in markets that have been started and wait until the trend appears before entering the market. If the market is not moving for the time being, why should you enter it? The thing to do now is to do nothing. Why not wait until it has clearly started before entering.

4. Time.

Determine the time frame, time determines the space, time to generate profit and loss. Any single transaction, the time frame must be unique, not changeable throughout the transaction process. Do not look long to do short, nor short to do long. (Currently mainly do 30M candle and daily)

5. Capital management.

  • (1) the first time to open a position accounted for no more than 10% of the total funds. See the market and did not earn money is a common thing, one of the reasons is that the position is too heavy, the heart pressure, can not withstand the slight shock of the market and be cleaned out, another reason is the timing of the intervention point is not good.
  • (2) After a successful streak in the market (more than 50% profit), 40% of the profit will be withdrawn for emergency purposes. Losses of more than 5%, the first opening capital reduced by half.

6. Stop Loss.

Set the stop-loss point and stop-loss capital amount before entering the market for each transaction, and the loss of each transaction shall not be higher than 4% of the total capital. Time stop loss does not hesitate; space stop loss to prevent accidents; single stop loss is not a fluke.

7. Increase positions.

Always add code only on winning positions. To find the key points when adding code, strictly implement the pyramid type position increase, increase positions must set up a stop loss.

8. Closing positions.

(1) Hold only the correct positions. Daily before the close of any feeling suspicious, not confident, with a floating loss of the single, all clear. Only hold positions with a floating profit. Any position that does not produce the expected change (not proven correct) within a specified period of time should be exited.
(The average speculator holds a position not because the price change confirms his trade, but because the price does not “confirm” his stop-loss signal. After he opens a position, if the price moves sideways or slightly down, but does not hit his stop, he will still hold the position and then start expecting the market to move in the direction of their position. (Murphy’s Law tells us that the market will go in the opposite direction most of the time.)

(2) Do not stay in oscillation, and leave the market quickly by accident.

(3) never let the position held to turn a profit into a loss, after a considerable profit to move the stop-loss point to above the break-even point in a timely manner.

9. Physical and mental regulation.

(1) a day after a continuous loss of 2 single must stop trading, check the trading plan and implementation process. Trading losses can not retaliate against the order, the next single transaction interval of at least one hour before the loss of single. No more than 3 times a day.
(2) 10% retraction of funds, mandatory rest for a week. If the loss of more than 20%, stop trading for a month.
(3) when the body is not well, mood, or what other things interfere with the time, absolutely do not do transactions.

10. Wait and see, wait and give up.

Better to miss, not to do wrong. The environment is not clear not to do; the market does not understand not to do; the timing is not to do. Always do only the simplest, the easiest to figure out the section of the market transactions. Winning soldiers first win and then seek war, defeated soldiers first war and then seek victory. The first for the unbeatable, in order to wait for the enemy can win.

Just mentally predict the market, but be sure not to act rashly, but wait until you get a signal from the market that confirms your judgment is correct, and only then can you trade with your money.

Good speculators always wait, always have patience, for the market to confirm their judgments. Remember, don’t trust your judgment completely until the performance of the market itself confirms your opinion.