Over the years, I have had in-depth exchanges with many trading masters, but there is only one that really impresses me deeply, and that is Brother Zhulang in Xinjiang.
This is a master I have ever seen who has the most thorough way of trading, and today I share it so that you can see the style of the master.
Five years ago, I went to Xinjiang to attend a small trader's party, and I happened to meet him, because he had read one of my articles, so he took the initiative to come and say hello to me, and then we went to the teahouse to drink tea and chat.
A trader of our level, chatting basically does not talk about methods and markets, only talks about trading philosophy, at first I underestimated him, thinking that he was another trader who fiddles with academics, but as the topic deepened, I gradually found that the cold man in front of me was extraordinary, so I instantly cheered up and talked to him.
I said what do you think about trading.
He said that trading is a game with the market, the game is about the way of offense and defense, trading is always faced with the uncertainty and changes of the market, once we open a single order, we may face a variety of favorable situations and unfavorable situations, in a favorable situation how we can attack efficiently, in an unfavorable situation how to defend without loopholes, which requires wisdom.
I agreed with him, and then I asked, you're right, both offense and defense are very important in trading, so do you think offense or defense is more important in trading?
He said that of course, defense is more important, and the premise of trading is to protect his principal from loss, and then think about making money. First do a good job of defense to make yourself invincible, then design offensive tactics, use market flaws to find advantages, design tactical processes, and finally achieve compound interest through execution. Remember, defend flawlessly so that you don't have a chance to lose control.
After listening to this paragraph, I seem to see a bosom friend, and it is really the same as the hero.
Masters, are all lonely to seek defeat, what is to seek defeat alone, is to make the defense of the trading system seamless, so that the market is invulnerable.
I asked, how do you make the defense flawless?
He said that to be flawless, remember one sentence, you can make small mistakes, but you can't make big mistakes. Because of the uncertainty of the trend, we can't predict the trend, so we allow errors in the transaction, when the direction is opposite to the direction of our embedded order, we use a fixed small cost to stop loss, that is, the cost of trial and error, which is a small mistake. In trading, heavy position operation, loss increase, competition with the market, frequent trading, operation of orders outside the plan, and inability to hold profit orders, this is a big mistake.
He took a puff of cigarette and continued, every time I place an order, I set a trial and error cost, set a stop loss, as long as the direction is wrong, I will fix the loss so much, this is the bottom limit of loss.
I asked if it would hurt if there was an unfavorable period, such as a continuous stop loss.
He said no, my trading system can resist the impact of 20 consecutive stop-losses, I am now the overall account is profitable, if I encounter the unfavorable period of the trading system, I at most use the profit to bear the drawdown, I am not worried, carry the unfavorable period, and so on the favorable period comes, I will turn defeat into victory.
I said that Brother Lang is really stable in doing this, and the market really can't do anything about you if it wants to clean you up, so let's talk about attacking.
He said that on the basis of invulnerable defense, the offense must also be efficient, otherwise it will be in a situation where the account equity is not up or down, which is also the bottleneck of many enlightened people, these people can do not lose, but the profit cannot go up.
I took over the conversation and said that I have a deep understanding, I have seen too many people like this over the years, so how to break it?
He said that enlightenment can only keep you from losing, but to become a master, you need to be efficient in attack to break through.
I said how to achieve an efficient offense?
He pinched off the butt of his cigarette, re-lit a cigarette, took a slow puff, and said that in order to attack effectively, three things need to be met:
First, use leverage to make a small profit.
Second, find the detonation point and catch the fish head.
Third, when the big market comes, a stud to the end and eat the fish body.
After he said this, I looked at the man in front of me in amazement, and a feeling of self-inflicted relief came to my heart.
He said it too thoroughly, although I also realized these ways of trading, but I couldn't use words to summarize the offensive and defensive ways of trading so completely, there are really people outside the sky.
I began to admire him deeply, so I drank the tea in the cup in one gulp, and said, the hero sees something the same, and really sympathizes with each other, and it is rare to meet a friend like you who has such a common language, so I invited him to change the scene, go to a tavern and continue to drink two glasses, and then talk about the philosophy of trading life.
Seeing this, how do the friends in front of the screen feel?
If you are still in a state of loss, it can only be said that your rank is not enough, and you still need to continue to work hard, continue to pay attention to my sharing.
There are some roads that you don't need to walk, and you don't have to experience them personally, but seeing my sharing is also a kind of insight and experience for you, and it is also a kind of progress. If you have any questions, you can leave a private message in the headlines, I will reply when I see it, I am Zhao Huagang from the School of Quantification, I hope you will continue to make progress and encourage each other.
Author: Zhao Huagang