3.6.1 Suggestions on establishing a trading strategy (1)

Every trader wants to establish their own personalized trading strategy, so the established trading strategy will vary from person to person, and the difference between these trading strategies is bigger or smaller. For example, two traders are based on MACD to establish their own trading strategy. If the parameters adopted by the two people are different, then the difference is very small; if one trader adopts the trading strategy of MACD technology analysis and another trade Using the fundamentals of financial indicators to analyze trading strategies, the difference between the two trading strategies is large.

Therefore, this article can not give a detailed discussion on the specific content of the trading strategy, and can only discuss the starting point and purpose of the entire trading strategy.

Thinking from a "not good strategy"

The so-called "not good strategy" means that when a trader chooses a specific strategy, the strategy is not suitable for the trader.

“Good” and “not good” are relative concepts. Different traders, investment ideas and investment plans will make the same strategy produce different value judgments between different traders.

When traders develop their own trading strategies, they generally prefer to start thinking from the perspective of “good strategy”, and when considering this purpose, they unconsciously hope that this “good strategy” can “completely” avoid various kinds. risk. Thinking for this purpose is risky for most traders. At the beginning of this chapter, we explored that this strategy is not universal, but most traders will believe that they have the ability to master a "good strategy" that others cannot master. This has caused many traders to fall into this category--the "good strategy" of "completely" avoiding risks is in pursuit.

Once a trader is caught in a “good strategy” pursuit of “completely” avoiding risk, it will cause some harm to the trader:

• When the strategy is effective at a certain stage, the trader will downplay the risk control, which makes the trader forget the discipline in the use of funds;
• When the strategy fails at a certain stage, the trader will be confused, which makes the funds slowly lose the security barrier;
• When the strategy fails for a long time, the trader will fall into pain, which makes the rational analysis and independent thinking disappear;
• When the strategy fails for a longer period of time, the trader pays more time for this.

If the trader changes the starting point of the trading strategy and starts to study from the "not good strategy", this stage can not get the active guidance of the action, but it can produce another effect: let yourself realize that in many cases You should not behave arrogantly.

From the negative way as a starting point for thinking, traders can effectively isolate themselves from “not good” strategies. For example, when a trader prepares a portion of the funds to trade in financial products, he has begun to give the business a "long-lasting good" vision in the depths of the trader's consciousness. But once the funds are ready for the transaction, some "strategies" are inadvertently pushed to the traders - for example, "the average price on the 10th goes from falling to buying, and the average price on the 10th is changed from rising to falling." Such a strategy. Once the trader begins to feel that the strategy is effective, then the investable variety will come one after another. As traders continue to buy, they suddenly find that their funds are not enough, and they are quickly occupied by a large number of trading products, and then continue to emerge. The exhaustion of funds in a short period of time contrasts with the vision of “long-term beauty”. On the one hand, traders will give unrealistic wishes to the currently traded varieties, and on the other hand, short-term quick actions will disrupt long-term planning.

When traders start with long-term planning, once they encounter short-term strategies, it is probably a good strategy to consider this strategy first, but for their long-term plans, this is a "not good strategy" and should be avoided. use.

This way of thinking about the starting point can be a good protection for traders.

For example, the following ways of thinking:

• Don't buy stocks that have a record high (although it's tempting and may even be more attractive in the future).
• Don't buy stocks that have a record low (although it's cheap, maybe it's cheaper in the future).
• Don't buy stocks that are losing money (although the market reports that it will turn losses, but it is not true after all).
• Don't buy stocks that haven't paid dividends for many years (although it's good, but it's not for shareholders).
• The price breaks through the xx day pressure line and does not buy (although the price has broken through, the long-term investment behavior is not based on the price breakthrough on a certain day)
• ...

This way of thinking will make traders feel that certain conditions constrain their own transactions, but it is these constraints that effectively protect traders in many cases.

(to be continued...)

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