Summary of Forex Trading Insights
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Arrogance and pride from making money can lead to bankruptcy. Therefore, after every profitable trade, you must take a break until you feel unfamiliar with or detached from the market. If you cannot resist trading, use only the smallest position size—inevitably, you will lose, prompting self-reflection: recognizing that losses can happen anytime helps maintain objectivity and better adapt to this zero-sum game, such as losing 1% once, twice, or three times. Only through occasional setbacks can one remain truly clear-headed. Making money excites emotions, distorting one’s perception of reality. The more you profit, the better you feel, making you prone to arrogance. The thrill of winning is what gamblers crave—they are willing to lose repeatedly just for that one euphoric win.
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Always remember, you alone are responsible for your wins and losses—never make excuses. Don’t blame the market. Losing money offers an opportunity to identify issues in your trading, and never take it personally.
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Successful traders quantify and analyze risk, diligently track it, and truly understand and accept it. Risk and reward coexist and are proportional—higher risk means higher potential returns. Before placing any trade, emotionally and psychologically accept the risk to maintain the right mindset. Each trader has unique risk tolerance and time preferences (reaction speed to market changes), making their approaches distinct. Choose a trading method that aligns with your preferences and risk tolerance.
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The forex market is not the stock market. Instead, the futures market reflects the collective psychology of all participants. Daily battles between bulls and bulls reveal their sentiments. Always analyze the relationship between the closing price and the day’s high/low, as it indicates recent market strength and current sentiment. Weekly charts guide your direction—never ignore K-line reversals. Even during rebounds, remain cautious and abandon preconceived notions. This tests your flexibility and adaptability, which are crucial in trading. (You’ve learned this the hard way.)
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Never go long just because the price is low or short because it’s high. Never average down on losing trades. Never lose patience with the market. Always have a valid reason before trading. Remember, the market is always right.
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Traders must listen to the market. To do so effectively, pay attention to your trading methods, just as you study charts and market movements. The challenge is to understand yourself—whether you are correct, adaptable, and what kind of trader you are—then consciously cultivate traits that lead to trading success.
