Cici's Teaching Notes📝: how to do rational trading in a market full of bias?
Rational trading is a long winning trading tip that all traders advocate but only a few can do. The market is inherently biased, and without bearish or bullish, there would be no volatile market. So bias is fundamental to why markets exist.
So how to do rational trading in a market full of bias?![]()
Today we share two key words: patience and calmness
Patience: Let profits fly for a while
Most traders are unable to be patient because they are unable to be sure of the future trend of the subject of the trade, which leads to complex emotions such as fear, greed and hope. And once the complex emotions take over your awareness, the operation becomes unruly, which is the root cause of losses. And assuming that you can do a good job of risk management in the transaction, such as 10% of the loss I will stop, or stop loss in batches of 10%, 30% (need to be formulated according to your own funds). I believe that most people will be able to have patience in the operation.![]()
The other kind of impatient performance is the investor holding on to the idea that one or a few trades will make him or her earn ponies. And this situation is almost impossible to exist. The volatility of the market is unlikely to allow you to make massive profits without losing money. That's why profitability cannot be rushed.
And letting profits fly for a while is the key to making a long profit with patience. The continuation of the trend is often volatile, impossible to be smooth sailing. But many investors may not wait for the trend to finish being shaken out by market volatility, resulting in what could have been potentially profitable did not get.![]()
In the volatile uptrend, you can try to take profit in batches: for example, 1/3 profit takes at the beginning of the rise, 1/3 profit takes at the target stop price, 1/3 left to let profits fly for a while, until the identification of a significant reversal of the market and then sell.(Not investment advice, should be set according to your own situation)
Calmness: Where there is danger, there may be opportunity
The market is simply made up of shorts and longs, and often where the market is chaotic, there is money to be made. Identify the chaos, the more chaotic the situation, the more daring and careful investors have the time to perform.![]()
Many situations are often: the market is chaotic, investors follow along with the chaos. Therefore, we can often see the panic selling pressure, investors chase high phenomenon. And chaos for the calm objective investors, is a godsend, because this may be a great opportunity to pick up bargains, but also the time to redistribute wealth. So it is very important to maintain a calm judgment not to follow the trend.
The two most basic rules for successful trading are: stop loss and hold a long.![]()
You may be reluctant to take a small loss out of the market and end up dragging the small loss into a large loss, and eventually you have to admit it.
Conversely, if you make money on the account, you will want to immediately take profits and close. Among the reasons for this is the hope that the money in the pocket will not be at risk of losing it, and yet make small money but lose big money.
In terms of mindset, a piece of advice can be given: treat financial operations as a game, and if you do not follow the stop loss and hold long is equal to breaking the rules. Maybe we will then act according to the rules and be more rational.
The above content is for sharing only, no specific operational advice. You are also welcome to share your own insights.![]()
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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心清自在 : Even if I know the truth, it's often not all of the truth,
What's more, many times I'm not sure if I know it's true.
It takes a lot of time every day to process information and materials,
I can't finish reading financial reports, I can't finish reading reviews,
I can't finish reading the analysis report,
I'm exhausted from running for life...
You can only calm your mind,
The inner volume of the transition is not involved, trying to see the whole world,
Relentlessly lying down and not looking at anything,
Crouching down, I only looked at the three acres of land under my command.
I understand that all I want is to simply be calm and at ease.
I'm trying to maintain balance,
So I'm leaving this post especially for the sake of encouragement.
Finally, I'll give you a special gift of my favorite dialogue:
A quote from writer Ma De:
Seemingly noisy and muddy all around you, this world is essentially your own world.
If you are clear, the world is clean; if you are simple, the world is difficult to complicate.
Hershie : What you say is true, but in reality sometimes hard to do. More so when trying to create income with only a small amount of capital. Warren B can be patient with his fat wallet (granted he built it overtime with calm patience ).
When I look back at my historical investments had I just held I’d have had a substancial amount more profit to date. The contradiction is life does not always permit time to wait, yet patience and calm still applies.
ZnWC : I like the term 'rational trading' and hope new Investors can read this article. We all know that manage risk is so important in trading but still act irrationally when started trading.
Writing journal is one way to remind me to be more rational during trading. Thanks for you valuable sharing.
Ravi_Sharma : For me main challenge are
1. find potential stock to trade as entrada or swing.
2. Unable to decide right entry and exit.
If you can provide teaching material on these two points..it will defensively help a tons of newbie like me
Invest With CiciOP Ravi_Sharma: Got you. Well, these two points are the key to our trading system. Now you can learn some methods from our premium course, go Learn - premium courses. More hands-on methods will be planned later.
Esther Moo3 : How to operate profit in batches as mentioned in the article ?