Does futures trading require talent? The answer is yes.
In our trading careers, many of us are trapped in one market fallacy, and some of us break through after a period of struggle. More people are like obsessed, as if they are suppressed by some magical power, and they are consuming time and energy in the illusion. This is very cruel, the process of progressing trading ability is like a step shrouded in fog, and only by completely dispelling the fog that envelops a certain level can we go further.
Many masters refer to this ability to break through in general terms as "insight". Insight into fantasy, insight into the essence. One of the reasons why many people are trapped in illusions is because they can't tell whether a thing or a theory is true or false.
There are many unfalsifiable phenomena in the futures market. Many people waste a lot of time on these things every day, unable to think about the essence behind them, and are stuck in the same place. That's why a lot of experts say that insight is important.
Pitfalls in futures trading
Unfalsifiable theories and phenomena in technical analysis:
In futures trading, there are some so-called technical analysis theories, such as selling high and buying low. On the surface, it may seem plausible, but in reality it is difficult to verify its effectiveness definitively. Because market conditions are complex and volatile, even if the theory seems to be successful at one point, it cannot be conclusively proven to be applicable in all cases. This ambiguity allows some bad theories to prevail, misleading investors and getting lost in a complex market.
1. Psychological Traps:
First of all, the fear of an uncertain future often makes investors hesitate to act decisively, thus missing out on good trading opportunities. Second, forecasting addiction can make investors overrely on their own or others' predictions, ignoring the real dynamics of the market and falling into unrealistic fantasies. In addition, the psychology of profit regeneration can lead investors to try to replicate the successful patterns of the past, forgetting about the changes in the market environment, leading to rigid trading decisions. These psychological factors are intertwined and seriously affect investors' rational judgment and trading results.
2. Thinking Traps:
Different investors often have different perceptions of various factors in the market due to their own experience, experience and environment. For example, leverage in the market magnifies both returns and risks, but some investors may only see high returns and ignore high risks. The magnification may cause investors to misjudge the true level of risk; Fundamental analysis may be affected by incomplete or inaccurate information; The results of technical analysis are also not infallible; The judgment of the trend may be biased; Changes in basis may carry unintended risks; The operating system may be flawed; The trading plan may not be perfect; Stop-loss can also become a trap if it is not set properly.
There are many unfalsifiable theories and phenomena in technical analysis. Throwing high and sucking low is typical of unfalsifiable results. For example, I said that the current market is a volatile trend, and you only need to sell high and buy low in the volatile trend to make a profit. No one can prove me wrong about this statement. Some people say it's not right, I threw it high, and I lost it, and you are wrong. No, I'm not wrong, because if you are short at a high level, the market must have hit a new high again. So I can say, it's because you didn't throw high enough. It can also be said that it is not a shock trend. No matter how much I question it, I can explain it perfectly, and I can never prove that I am wrong about this assumption.
There are also those who make fundamental analysis unfalsifiable. For example, some people say that you can't predict the market because you don't have enough analytical skills, or because you don't have enough information to gather. This phrase is the same as "You don't succeed because you don't work hard enough." It's a truth.
Similarly, "The reason why you can't make a profit using the wave theory is because you can't count the waves accurately, and the level is not enough." I have a very invincible set of trading cheats, but only people with strong willpower can use it, etc. ”
The falsifiable trading logic is the scientific transaction. Because many people don't understand this truth, they are firmly trapped in a certain fantasy by a certain assumption that can always justify themselves.
Another analogy is the futures position data for each day. This is public information, and every day the exchange will list the data of the day, and the increase or decrease of the positions of each futures company can be seen at a glance. I've seen too many people who use this data to generate trading evidence, and there are people who use a certain situation in this data to analyze the market.
Not to mention, this data is an out-and-out post-facto data, and not to mention, this data is known to the whole world. Just talking about using this data to analyze the behavior of the market, most people have set a trap for themselves that cannot be falsified. Because the market of the day is nothing more than ups and downs, and the changes in position data are nothing more than increases and decreases, you can always find a certain statement to explain the trend of the day.
This kind of analysis is completely to eliminate the fear of facing market uncertainty, and has no practical significance for the improvement of trading skills. For example, "If the data of a certain company increases significantly, then the market will rise." Whether this logic can be falsified or not is a matter of thought, and the test is whether the trader himself has insight. If his data has increased significantly and the market has not risen, traders think that the reason is because his data has not increased enough. Or his family's data has increased to an exaggerated number, and the market is still not rising. At this time, the reason is defined as: although his family has increased, the other company has decreased, or the other company has increased more empty orders, etc. This infinite loop will never end.
How do you determine if this data is meaningful at all? Quite simply, turn it into a falsifiable logic.
For example, if the data of a certain company increases by a certain percentage significantly, then the market will rise, and if it does not rise, the data of other family will have no reference significance. This logic can be falsified, because if one day their family increases by a certain percentage and the market does not rise, this logic fails. Traders can then test their other ideas, and they can also put their time and energy in other directions until they finally discover the truth.
In other words, if a trader suspects that he has been trapped in some trap, or encounters some theories that he simply does not agree with, he should jump out of these theories and think about under what circumstances is it wrong? As long as you try to make the whole logic falsifiable, you will have a chance to break through the encirclement and recognize the truth. If in any case it is not possible to prove its error, then we have reason to scoff at these theories.
Sometimes, it takes some courage and effort to get out of the labyrinth of popular myths.
Remind you again that futures investment is a double-edged sword, reasonable investment can make people increase their wealth, irrational speculation has a high probability of breaking the risk of wealth, when doing transactions, we should strictly control the risk, see more, learn more, and operate less.