In trading, both profit and loss are common occurrences. However, in order to maintain profitability in long-term trading, besides being familiar with the market and trading, it is more important to control your emotions, maintain rational thinking, and develop good trading habits, so that you have a greater probability of making a profit rather than a loss on each trade. This requires deliberate practice.

Preparation Stage: Selecting Market Instruments and Trading Systems

First, you need to choose a market and select actively traded stocks and futures for trading. At the same time, you need to choose a trading system, such as a moving average system. This practice is to train your thinking to become your advantage and help you achieve stable profitability—probability thinking.

In this practice, regardless of the system you choose, it should have the following key points:

Timeframe

First, ensure that all entry and exit signals in your trading system must be unified within a timeframe framework. For example, if you confirm support and resistance levels based on a 30-minute moving average chart, your risk and reward targets should also be calculated based on the 30-minute chart. However, trading within the same timeframe framework does not mean that you cannot use other timeframes to filter signals. For example, in trend trading, the longer the timeframe, the clearer the trend. Therefore, the trend on a daily chart will be more obvious than on a 30-minute chart. To determine the direction of the trend, you can refer to the trend direction on the daily chart. If the daily chart shows an upward trend, you can wait for a pullback to the support area on the 30-minute chart.

Entry Point

You must clearly define entry criteria that are favorable to you, and try to eliminate subjective decisions or judgments as much as possible. If the market and your system align, then you should execute the trade. If the market and your system do not align, then you should not trade. There should be no external events or random factors interrupting this process.

Stop Loss Point

You must clearly define the maximum risk you can bear, and once it is reached, you must close the position immediately. Similarly, regardless of the situation and the type of trading system you choose, there should be no unnecessary subjective judgments, meaning that external fluctuations and random variables unrelated to the trading system variables should not interfere with the current execution of trading system decisions.

Timely Profit Taking

If you initially do not know how to handle this objectively, the best way is to divide your position into multiple parts (such as 5 or 10 parts), and then allocate the position based on market fluctuations. For example, if you make a profit of 10 basis points in a trade, you should close one-third of the position according to the plan. The number of positions closed depends on the market and instrument you are trading, as well as your current advantageous position. In addition, you also need to consider one factor: a reasonable risk-reward ratio.

Formal Practice: Accepting Risk and Strictly Executing Trades

After selecting the trading instruments and system, you can begin formal training. Let's assume that you need to make at least 10 trades. This practice requires you to know your risk before making the 10 trades. You need to learn to accept the risk of the practice calmly.

The rules of the practice are simple: trade completely according to your system. Before you complete the 10 trades, you cannot be influenced by external factors, nor can you change the system parameters. When you are familiar enough with your trading system and gradually overcome the emotional fluctuations caused by gains and losses in trading, then you have acquired the most basic and important psychological qualities for successful trading.

Once you believe that trading is a game of probability and develop such trading and thinking habits, concepts of right or wrong, winning or losing, become less important.

- I am Zhou Yueying, a teacher dedicated to technical analysis. If you have any questions or issues related to operations or trends, feel free to communicate and learn with me! Let's exchange ideas and profit together! Public Account: I am Zhou Yueying, V Blog: Financial Expert Zhou Yueying

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