Stable trading within the day! 5 Most, exclusive secret tricks!

Foreword: How much will it cost? How much will it cost!

Let's see how much life costs first.

For example, if you need 30,000 yuan per month, which is equivalent to 5,000 US dollars, if you calculate the monthly income of 20%, the principal needs at least 25,000 US dollars, and the actual need is more, there must be a certain amount of reservation, so the principal is set at 30,000 US dollars. If a friend is single and the cost of living is lower, 1,000 US dollars is enough, then the principal should be 7,000 US dollars. This is easy to calculate. The reason why I listed the required principal at the beginning is because the title is how to support my family through day trading. Take 500 US dollars as the principal and earn 1,000 US dollars per month for living expenses. This is a bit too much. To be able to support my family through day trading, a minimum amount of principal is always needed! As for how to achieve a stable 20% profit per month, don't worry, wait for me to come slowly.

I believe that most friends who enter the world of foreign exchange trading have a goal in mind, hoping that one day they can profit from trading to support their families. They don't have to worry about this money or that fee every month. They even hope that the money they earn from foreign exchange trading can make their lives better, such as buying a car, buying a house, traveling, and small (3, 4, 5, 6, 7, 8, 9) things, haha. But the idea is beautiful, but the reality is cruel. Often many people are tortured to death by the market and still can't get in! Or they have gradually given up their original dream after years of tossing, only to be unwilling! In fact, success does not depend on whether you work hard or not, or whether you have talent. The key lies in whether you are on the right path, not the opposite of the road to success.

Therefore, this article will refute a few of the easily overlooked day trading mistakes, hoping to pull you back to the right path after you have taken the wrong path. In addition, I will provide some personal experience, day trading is a high-risk, high-intensity type of trading, to lick blood at the edge of the knife all year round must be well-prepared and implemented. Every link must be done, even a slight omission may lead to total failure!

Part 1: Pre-transaction planning and preparation

Don't treat trading behavior as a game or a shortcut to achieve your dreams. Trading itself is a business. If you are opening a store, you will care about the cost of rent, employee salaries, purchasing costs, the way you sell goods, and even more about income and profits. Then do you care about your hard work, the way you trade, income and profits when you trade? You must say that I care a lot, but if you really care, why trade at will? Why go into battle empty-handed and shirtless without even a system weapon? Why keep losing money and not change? Why do you always comfort yourself that I just try and fumble now?

If it is a business, it must be planned. If you can't start a business, you can try it first. If it doesn't work, you can withdraw!

We should not only plan for the future, but also for the present!

Don't try to make tens of thousands of dollars with a few hundred dollars without paying too much, that won't work. Why it doesn't work will be explained in detail later.

First, prepare:

Are you ready to enter the world of day forex trading? Are you ready? Are you really ready?

Are you ready to accept the state of life without entertainment, communication, and support? Are you ready to accept the tedious work state of statistics, transactions, and reflection for 8 hours a day for a long time? Are you ready to accept the state of existence that is almost closed for at least 2 years?

If you are really ready, then please follow me to do the next preparation and raise funds!

On the premise of not considering living expenses, please prepare for yourself (based on the principal of $7,000) $500 + $500 + $2000 + $2000 + $5000 = $10,000 in reserve funds. Please ensure that you have at least $10,000 in reserve funds at the beginning. These funds are used for real market verification, system running-in and final capital. If there is less, work hard until the end, and get stuck in the funding gap, what else can you talk about making money? It needs to be reminded that if the amount of funds is large, you can increase it by a multiple of the above funds. For example, I chose the ratio of 2000, 2000, 10000, and 16000 before.

Second, choose a trading platform

Day trading has very high requirements for the platform. Low spreads, stability, and good withdrawals are all necessary conditions for stable profits. I don't want to say who is good or bad here, but if the platform cannot meet the above conditions, it is impossible to achieve stable profits in day trading!

Third, trading ideas

If you don't even have a good day trading idea, please stop everything and go back to study, read books, and simulate first! If you want to "extract" money in the day trading market, you must first have a trading idea that feels that the probability of success is "seems" good. Don't think that you can fumble while trading, that's a waste! Wasting your time and wasting your money is pointless!

From another perspective, this is a kind of intuition, which is an intuition generated by long-term learning, practice, and trading. This is the formation mechanism of human right brain reactions. When you have such intuition (trading ideas), it means that the person can enter the stage of theoretical and logical analysis of intuition (left brain mechanism) and form a trading system through quantification. Don't skip this part. If you haven't formed an intuition yet, please don't continue trading!

Fourth, time planning

Give yourself 2 years, because it is a day trade, so the time required is shorter. If you can't achieve stable profits in 2 years, then give up. You must be born unsuitable for day trading!

The second part: two major mistakes in day trading

First, light trading

Almost all the talk points to light trading as the only way to maintain a stable position management. I think this is a major misunderstanding for day trading! Someone will definitely jump out and say, do you want to liquidate your position if you don't take a light position? The mentality of not taking a light position will deteriorate! Light positions are a weapon for stable trading!

Who says that heavy positions will definitely blow up? Who says that heavy positions cannot maintain a stable mentality? Light positions do day trading, are you playing or torturing yourself? Day trading itself is already the trading form with the smallest time frame. Every transaction is more than 80% sure to enter the market. Such transactions are not open to heavy positions. What other day trading do you do?

Intraday light trading, do you work hard for 8 hours a day, just for 30% annual return like medium and long-term trading? Intraday traders are for high returns! Note: it is high returns, not huge profits! High returns are accumulated through hundreds of trades a year!

The intraday trading method I am referring to has specific standards, and there is also a position management mode for heavy positions. The following article will explain the characteristics of this type of system in detail, but of course it does not refer to all intraday trading methods! For example, there is a trading method that involves dozens or hundreds of transactions every day, and every time it is 1 lot! I still don't understand what is going on with this trading mode. It is really incredible that it can be profitable for a long time.

Intraday heavy position trading is the only way to get high profits for small funds. Although it is a bit dangerous, the advantage is that the absolute value of funds is small, and the absolute risk is limited. Add a few constraints, so that the safety of funds can be guaranteed. These constraints will be reflected in the characteristics of the trading system, the management of heavy positions and the withdrawal method.

Second, compound interest growth

Many people believe that compound interest growth can quickly accumulate capital. Some people believe that I can start with $500 and make it $20,000 or even more. Some people think of continuously expanding their positions after investing capital, so that they can quickly earn their first pot of gold through compound interest growth!

But I want to tell you that the idea of compounding growth in day trading will not work! Day trading must fix the principal and the number of trading lots over a long period of time! Only in this way can the mentality be stable! Day trading is prone to rapid growth in capital in the short term. Many people will have a lot of confidence at this time, and then enlarge the trading lot and continue to make heavy positions! However, usually the nightmare starts here! Changes in mentality can lead to out-of-control trading, so compounding is not feasible in day trading!

Of course, there are also workarounds, but you must leave enough time and space to adapt, and you must not be too hasty! For day traders, it is recommended to adjust the number of trading lots in as little as 3 months, and gradually increase the initial adjustment, not too much at one time!

Part 3: Full Day Trading System Features

The intraday stability system includes three parts: trading system, position management, and emotional management. These three parts are indispensable!

First, the trading system:

1. Basic conditions

A quantifiable and falsifiable trading system is the basic condition for achieving stable profits! Day trading and long-term cycle trading are completely different, and there is almost nothing in common. This is a matter of two worlds! Day trading must abandon all analytical judgments and focus on probability calculations! Whether you value a certain pattern, a technical indicator signal, or a K-line feature, or a price feature, they must have an average frequency of more than 2 times a week, otherwise there is no opportunity for the system to profit, and exceptions cannot be used as the goal of system trading. When the links you value can be precisely defined, then you have the basic conditions for forming a trading system.

2. Quantification and falsification

Quantitative means that each link is precisely defined in the trading system can be calculated various probabilities, you can know your trading system by quantifying the frequency of occurrence, probability of success, average volatility, average profit, average loss, profit and loss range distribution, actual trading success probability and distribution of various data. With at least half a year of data, you can know where your system is wrong, where it is worth modifying, and where it needs to be strengthened to avoid blind changes, which is falsifiable. Only by clearly knowing where your system is wrong can you correctly improve system efficiency!

3. Characteristics of the trading system for stable and profitable day trading

A day trading system that can make stable profits and meet the needs of long-term life should meet the following characteristics: high position, high win rate, low frequency, low profit and loss ratio, and precise definition. Among them, high position and low profit and loss ratio can be said to subvert the orthodox view of the current market tutorial. Not to mention high position, it is all about low position trading. You should have never heard any "master" talk about the benefits of high position trading. And low profit and loss ratio is even more subversive. It is said that high profit and loss ratio should be able to continue to make profits. How can low profit and loss ratio work? I do not deny that high profit and loss ratio is very good, but in certain circumstances, low profit and loss ratio is effective.

① High win rate

The trading system must have a theoretical success rate of more than 80%, a maximum stop loss of 30 points, an average profit of more than 30 points per order (but most of them should be around 20 points, and a few cases will have a profit of 50 points to 150 points), an average positive fluctuation of more than 40 points, and an actual trading success rate of more than 70%. A high win rate is the first requirement to maintain a stable profit in a high position. An 80% success rate means that every 5 orders have a loss of 30 points, while the remaining 4 orders have a profit of more than 120 points, and every 5 orders have a profit of more than 90 points. Only such a high win rate trading system can stabilize the output of profits.

If you take 5 lots of the $10,000 account (the specific position setting is detailed in the position management of the heavy position trade) and 10 trades per month (2.5 trades per week), the monthly theoretical profit is 180 points, the monthly expected return is $9,000, and the monthly expected return rate is 90%. Of course, this is only theoretical. There will be many average trades in the actual trade, and the income will be reduced due to imperfect experience, data or poor psychological quality, but it is still very easy to reach 20%.

② Low frequency

After a long period of exploration, low frequency is one of the main characteristics of a day trading system that can stabilize profits. If there is a reason, it can only be said that the success rate of more than 80% can only be said. If it occurs at a high frequency, all good things will be taken up. Suo Screw will be jealous! Of course, this is just experience. If you find a day trading system with high frequency and high success rate, please give me your advice! The range of low frequency is that the average trading signal appears 2 to 4 times a week. If it is lower than 2 times, the trading value will be lost. If it is high, it will be a bit scary. Occasionally, it is normal to appear 6 or 7 times a week. If only 1 signal appears for 2 consecutive weeks, it is also possible. The key lies in the average.

③ High position

A high position with a high success rate and a stop loss within 30 points is a powerful tool to ensure a profit of more than 20% every month! How to set a position, the following will provide some simple personal experience.

④ Low profit and loss ratio

The profit-loss ratio is the ratio of the average profit per order to the average loss per order. Usually a high profit-loss ratio corresponds to a low success rate. For day trading, if you continue to lose money, it will deal a heavy blow to trading confidence. I am afraid that it has collapsed before you can resist success. Since the maximum stop loss has been set at 30 points, it is impossible to lose more than 30 points per order. Coupled with a high success rate and a stable average return, although it is a low profit-loss ratio, it is the best way to make stable profits. You will definitely say that a high profit-loss ratio is better, but the reality is that the best environment for day trading is not in the intraday trend state. On the contrary, the more volatile the market characteristics are, the easier it is to make intraday profits, and the volatility value of each order in the intraday environment with volatile characteristics must not be large, and usually most of the profits that can be grasped are only about 50% of the opening position to the end of the wave. After all, there are spreads and the confirmation process required for right-hand transactions, so most of the characteristics of such systems are low profit-to-loss ratios.

⑤ Precise definition

The exact definition was easy to understand. The system required that there was no link that could not be precisely defined. As long as there was a link that could not be precisely defined, there would be an opportunity for your inner demons to find reasons to take advantage of loopholes.

Second, position management for heavy positions

Compared with medium and long-term trading, position management is not the most important part of day trading. Day trading position management is simple and conducive to staying awake in the midst of complex trading information!

My experience is to trade the maximum position under the premise of guaranteeing 3 consecutive maximum losses of 30 points. For example: If I want to open 10 lots of EUR USD, the minimum capital required is 10*1245+10*300*3=21450 USD. Since the success rate of system theory is above 80%, it is already a small probability to have 2 consecutive maximum losses. The above position ratio satisfies the situation that even if there are 2 consecutive maximum losses, I can still open 10 lots.

III. Emotional management

Emotional management is the most important part of intraday trading, and execution is the key to stable profits! Be sure to face up to the hypnotic effect of the market, this is no joke, it is real. Long-term intraday trading, especially in the case of holding positions, can amplify emotional changes and even change your established plans.

Intraday trading requires one hit, not far away! Reflected in the transaction is to do only one currency pair, up to one order per day, position squaring on the same day, one opening, one position squaring!

Maintaining the number of trading lots for a period of time is also part of emotional management! The reasons for this involve many factors, such as when there is a continuous profit, people's hearts will swell and trading will get out of control; for suddenly enlarged trading lots, it will not adapt; when you are used to fixed maximum losses, enlarged trading lots means increased losses, which will amplify negative emotions; etc... Basically, it is all about emotions. To increase the number of trading lots, you must use 3 months as a period, and no increase in trading lots is allowed within 3 months.

The most important thing is to execute! Regarding this part, the following is a separate section for introduction

Part 4: Effective Execution, Zero Errors! - Separation of Decision and Execution

The biggest difficulty in day trading is that due to long-term interest in the market, it will be hypnotized by market trends, reduce the mind, cause emotional loss, and then do not follow the system signals to trade, resulting in heavy losses. Such losses are often not stopped or later forced to stop because they are not in the system. Often, long-term profits are wiped out by one-day losses, and then the mood further deteriorates. The vicious cycle of trading begins, and eventually it is exploded! This is a common problem among day traders. Many people try to control and solve it, but it has been ineffective. They often use various methods to get better for a period of time, and then they commit it again after a while, and then try to control and solve it.

I have also encountered such a situation before, which often caused the capital curve to drop sharply. Eventually, I realized that there is no solution to change by myself! A person's character is bound to be flawed in trading, and people have emotions. All kinds of influences will lead to failure! Therefore, instead of using 20 years to change their character, or even be a "monk" with few desires, it is better to separate decision-making and execution, and let their "sinful" hands never touch the button of buying or selling!

Wrong trades can cost traders a lot of capital and profits. In addition to making wrong trades outside the system, even trades within the system often bring subjective emotions and lead to wrong trades. Such wrong trades are often the incentive for major losses. Therefore, avoiding wrong trades is also an important part of execution!

So how to achieve effective execution with zero mistakes? The solution is simple, but also crucial - decision-making and execution separation!

The trader (trading system setter) is the decision-maker, responsible for qualitative and confirmation, and the executor is also commonly known as the trader, responsible for monitoring, early warning, supervision (supervising whether the trading request made by the decision-maker conforms to the trading system), opening and closing positions, stop loss setting, and statistical work. In this way, under the premise that the trading system has been perfected, the decision-maker is completely liberated from the state of being hypnotized by the market, and only needs to regularly characterize the market environment for the trading system, and confirm whether it conforms to the trading system and which type of transaction belongs to the system when the executor issues an early warning. After confirmation, it is confirmed through the supervision and confirmation of the executor, and the executor can issue trading orders to the executor.

Making a sound decision-making and execution process is the prerequisite for effective execution and zero mistakes. The entire process is based on your own trading system, so you can't leave any loopholes for yourself. You must ensure that the decision-maker cannot operate outside the trading system! With the right to trade and supervision in the hands of the executor, you can achieve effective execution and zero mistakes!

What? This will all go wrong? That can only be a problem with your trading system, and the greatest possibility is that it is not precisely defined!

Part 5: The Exclusive Secret

Haha, this title is a bit exaggerated, the purpose is to let you, who have read so much text and are already drowsy, pay attention to the content that follows! Pay attention! Pay more attention!

Those who have had the experience of withdrawing money will be very happy at the moment of withdrawing money, and even gain confidence. By the way, be sure to capture this feeling, which is the key to forming a virtuous circle of your trading!

You may not think that the secret trick is a way to withdraw money! However, I can tell you that this is the key to making a stable profit in day trading! If you can't understand and experience it, please try the method I mentioned! You will experience the feeling of entering a virtuous circle of trading.

The most important thing in day trading, I have repeatedly emphasized - is the state of mind! The various methods of emotional management mentioned earlier can only help you maintain a stable state of mind, but they cannot be further improved. The withdrawal methods mentioned next can effectively improve confidence, eliminate fear and prevent capital shrinkage caused by special circumstances!

Exclusive secret trick - set up a second account under the same trading platform and transfer half of each profit to this account! Accumulate $2,000 to $10,000 in withdrawals! Keep the remaining half of the profit in the account, but do not increase the trading position.

Obviously, this approach has many benefits. Within a short time of starting trading, the withdrawal of funds should have fully recovered the cost of invested funds, and at the same time, the trading account has also doubled the amount of funds invested in the initial trial. I believe that under such circumstances, traders must have great confidence and be more open-minded! And every profitable trade can directly bring real money to traders, and the mood will be better! At the same time, funds are also growing at the same time. In this way, a virtuous cycle begins, and profits will become easier and more confident. With money in hand, hehe, you know!