Do crazy things with a rational mindset

The vast majority of economists and analysts basically choose investment decisions on the basis that "the market is made up of a group of rational people". In fact, it is precisely the rationality that most people lack, and it is precisely the irrationality of people that the main force of the market exploits. In fact, people have emotions, emotions, and distinct personalities. How do this group of people gather in the market and influence each other? It seems easier to be more pragmatic and rational, or to keep rushing into madness. In fact, because many analysts do not grasp the irrational side of people, they believe that most people in the market are as immune to emotions, biases, and dogmas as they are, and can remain absolutely rational in any situation, at least clear-headed. This is why they often go wrong. In fact, this market is crazy, not only because it is made up of crazy people, but more importantly, you can't make money if you are not crazy. This market is made up of crazy capital, so it can only get more and more crazy. Rational, in virtual financial marekt is basically synonymous with "failure" or even bankruptcy.

For several years, I have been wondering why most investors are driven mad - and then completely sober - out of the market! I have studied the "swimming" process of many investors, and it is common to go from extreme confidence to extreme lack of confidence. There are no true masters or eternal winners in the face of the market, and when you think you have become a master or a winning general, you are not far from madness. And my research also found that the participants in this market are precisely the best and most confident people in the world, so they are most likely to go from rationality to madness!

existforeign exchange marketIt seems that we are constantly faced with a choice, choosing to buy up or down, choosing which currency pair to buy? And most people may not think that in most cases the best solution is actually not to choose. This choice is easy for a rational person to do, but for a crazy person, it is the same as saying to an alcoholic: You can't drink anymore. Obviously, the trading decisions of speculators who appear to be sober but are actually crazy in the market are not exactly the ideal situation assumed by economists. They are buying and selling every day, and they never stop when they make mistakes. Even masters cannot avoid making the mistake they all know - falling into the trap they have dug for themselves.

"Knowing it, and clearly committing it. Who knows it, and who commits it." This dilemma and tragedy of human nature force us to explore the inescapable question of human nature "wandering between rationality and irrationality." Obviously, the behavior of most market participants is not always at the mercy of irrationality. Most of them have learned the discipline of market operation and basic knowledge of risk prevention, and many of them are quite experienced. But success, and the desire to succeed, has led them to gradually be swayed by the irregular, uncontrollable and irrational fluctuations of the market, thinking that the market will always be like this - constantly crazy. In fact, this market is indeed crazy. We often analyze the so-called resistance level, the important resistance level, thinking that in the face of the resistance level, the market will turn around. However, if you look at the K line of the market, it is not a breakthrough and then a breakthrough, which surprised all analysts. What is meant by a breakthrough is to do something that is considered impossible by the rational mentality. In a sense, it is crazy. Under this constant crazy trend, any rational person will increasingly disbelieve himself and finally make incredible decisions that he would never have made when he was sober. And then it is often the real grave.

Therefore, what a truly successful trader should pursue is the state: not to distinguish between rational and crazy, but to do crazy things with a rational mindset. For example, when the euro broke through the important resistance level of 140, it had actually entered a crazy upward stage, and many rational people were talking about the "end of the bubble", but it kept rising, and it still rose despite many hardships. Rational people did not dare to chase, and even bought and fell prematurely, but suffered a big loss; and after it broke through all important resistance levels and entered the era of no resistance, almost no one in the market said that it was going to fall, and analysts gave a lot of reasons to support it rising and rising forever. Many people who were used to its madness did not hesitate to chase it, and finally they could only be crazy themselves.

In the process of doing the euro against the yen, I finally understood what "nothing is impossible" and the truth that "reason must eventually triumph over madness". The foreign exchange market is made up of a series of impulsive trades, which are one irrational K-line after another. In particular, the cross trade, there is not much rationality or fundamentals to speak of, so I wrote "The Game of Fundamentals and Spread Trading", wrote that I sold it during the day and bought it at night, and bought it when I fell, until 149.75. Only yesterday did I tell you that it has reached a major adjustment point - because it has risen 2,000 points and accumulated a huge profit. I can no longer buy it, I want to sell it, and I will sell it as soon as there is a rebound. I believe that the crazies in the market have now turned their instinctive desires, lost control of emotions, and involuntary decision-making to the other side - to run faster.

Of course, we still have to control ourselves, but this kind of control becomes how to kill and sell, how to buy with high and low, and also use a rational mentality to do crazy things, and do things that are impossible to do under a rational mentality. What is a breakthrough is to analyze very impossible things according to a rational mentality, but this time it is a downward breakthrough, constantly breaking through.