Excerpt from "Trading Psychology Analysis".1
1. (1) You can make money without knowing what will happen next; (2) Anything can happen; (3) Every moment is unique, meaning every advantage and every outcome is a unique experience. Trading is either a success or a failure. In each trade, you wait for the advantage to come, then repeat this process over and over again. This way, you'll learn what works and what doesn't. Another important point is that you must build your own confidence to prevent the countless characteristics of the market from destroying you.
2. For stocks, commodities, or financial products, fundamental analysis comprehensively considers all variables that affect the balance or imbalance of supply and demand. It uses original mathematical models to measure different factors (interest rates, balance sheets, weather patterns, and countless others) to predict where future prices should go.
3. Technical analysis is a method that organizes collective behavioral patterns into identifiable patterns, so it can provide clear confirmation when something is highly likely to happen. In other words, based on patterns that have occurred in the market before, technical analysis allows you to enter the market's mindset in anticipation of what might happen.
4. How to distinguish between (those who consistently make money and those who don't) these two types of traders? Is it intelligence? Are consistent winners smarter than others? Do they work harder? Do they have stronger analytical skills? Do they have better trading systems? Do they have innate traits that make them more relaxed under trading pressure?
When you consider that most trading institutions composed of the smartest and most accomplished people in society also fail, you know these reasons are specious... Intelligence and excellent analysis certainly contribute to success, but they do not define the factors that distinguish consistent winners from others.
5. The defining characteristic that separates consistent winners from others is: winners have a mindset—a unique attitude—that keeps them disciplined, focused, and, above all, confident in unfavorable situations. As a result, the usual fears and trading mistakes that infect others do not affect them. Everyone eventually learns something from trading, but very few learn the attitude of becoming a consistent winner.
6. Trading is inherently risky. In my experience, no trade is guaranteed to make money. Therefore, the probability of misjudgment and losing money always exists. So, when you trade, do you consider yourself a risk-taker? Although this sounds like a trick question, it isn't.
[I personally like the number 6, so I’ll just excerpt 6 points. This book is worth reading. It may not help you make money, but it can help you cultivate mindfulness. People often say that mindset is everything—it truly can influence our lives.
Trading is a joyful thing. Learning to enjoy it and deriving unprecedented fun from it is a very enjoyable experience.]
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