Depth! What is the difference between a top trader who has advanced from 100000 to 10 million and an ordinary trader? Like my brothers, I have been constantly pondering a question: What is the fundamental difference between top trading experts and those ordinary people? Is it because they are smarter? Or is it because they are working harder? But this cannot be justified, because there are so many traders who have tried their best but still struggle, and so many people who have been immersed in the K-line world for decades still cannot rise to dominance. I kept thinking about this question until at some point, I discovered that some people with academic backgrounds were trapped in the analytical illusion they were proud of. I have found that some trading veterans are immersed in their information world every day. I have found that the obvious and seemingly logical basic principles of speculation can actually lead to different people having different observations and thoughts, resulting in various outcomes. I suddenly understand that in the world of trading, it's not about effort, education, or experience. Cognition is the only gap. 1. It's not easy to know and difficult to do, only to not know In the trading field, many traders like to use one word to explain their lack of execution: 'It's easier to know than to do'. But in reality, in the world of trading, these four words are meaningless. Speculative trading is easier said than done. The reason why it's difficult is actually because I don't know. For example, many people know that smoking is harmful to health, why not quit smoking? Because my understanding of the harmful word 'harm' is still insufficient. For example, I smoke, and I have tried to quit smoking but ultimately failed. I have repeatedly examined my inner self to find reasons for failure, is it because of my execution ability? Is it because my ability to resist temptation is not strong? I don't think so, because in certain fields, I can demonstrate exceptional execution skills. What's the reason for that? I kept thinking about this question until one day, I suddenly realized the fundamental reason: because of cognition. I ask myself, my true understanding of smoking is that it is indeed harmful to health, but the degree of harm is limited. With so many smokers around me, I have never seen anyone have an accident because of smoking, and smoking is one of the few ways I have left to suggest that I am very relaxed .. The reason why I can't quit smoking is because in my shallow and limited understanding, I believe that the benefits behind smoking outweigh the harm for me. So I can't change my perception, no matter how you force me to quit smoking, it's meaningless. I can eventually come up with a way to find one and click on it. But what if one day I get sick from smoking and face life-threatening situations? Without a doubt, I will quit smoking immediately. My execution ability will be stronger than anyone else's. Because my cognition has undergone a tremendous change, there is no need for any coercive measures. So, there is no such thing as knowing is easy but doing is difficult, there is just a lack of understanding. Changing behavior and trading patterns is fundamentally about changing your cognition and your perception of the pros and cons of the trading factors involved. 2. Cognition with action is the true cognition The most common trading problem may be stop loss, without a doubt, stop loss is the most fundamental trading skill. In the eyes of many laymen, stop loss may be wrong. They will say: losses are all stopped by stop loss. However, in the more than 10 years of trading career, the true trading masters I have seen are all decisive figures in terms of stop loss. Pick up the knife and drop it without any hesitation. Why are they doing this? What supports their decision? It's cognition. Many traders think they understand the principle of stop loss, but in reality, many people start to hesitate when they need to take action at the moment of stop loss. Countless images begin to emerge in their minds, and various emotions arise in their hearts: Why stop loss? What should I do if the market improves after the stop loss? This market trend is designed to wash me out, we must withstand it! Although stop loss is correct, this time I have full confidence that the market will go back! This stop loss position is not good, I need to change the stop loss position! Today's market is a panic market, we cannot let it panic out. At the moment when a stop loss is needed, whether in the cryptocurrency industry or the US stock market, traders have countless reasons to intervene and make their own decisions. The reasons are varied, but the fundamental reason behind this is actually only one: He believes that his stop loss will result in losses. It should be noted that speculative trading involves one's fundamental interests, and human instinct is to seek benefits and avoid harm. We will always make the choice that we perceive to be "most beneficial" to ourselves. So, at critical moments that truly involve real interests, true cognition will definitely be reflected, and at that moment, the fundamental cognition that supports his decision is his. This is the fundamental mistake of knowing is easier than doing. Many people think they know but cannot do it because their understanding of it has not reached the point where it can dominate their behavior. Actually, I have emphasized before that stop loss is only two words. But behind these two words, there are at least countless cognitive levels hidden, which can be roughly divided into the following 7 layers: ① I don't understand why we need to stop loss ② Recognize stop loss ③ Strive to avoid stop loss ④ Recognize the reasonableness of stop loss ⑤ Understood. Profit and loss come from the same source ⑥ Unconditional stop loss ⑦ Embrace stop loss A trader may feel that they truly understand stop loss, but in reality, they may only be at the second level and their understanding may be at a very superficial level. And who can truly achieve unconditional stop loss when touching the stop loss? They must have an absolute understanding of stop loss. After experiencing various pains caused by not stopping loss, they are the ones who prioritize the importance of stop loss in trading. What will they think when the price touches the stop loss? The thought is: stop loss. They don't have any thoughts of locking up, intervening, or not stopping losses at all. Because they know that at this moment, stop loss is the perfect choice. So, they will make a resolute decision with iron blood, and their hearts will be as calm as water. True trading masters do not have any magical exclusive secrets, they have only forged high-level trading cognition through countless experiences. 3. The threshold for trading has always been understanding and executing The correct trading behavior cannot be achieved due to insufficient cognition. Unable to execute trading systems consistently due to insufficient understanding; Die hard, because of insufficient cognition; Heavy warehouse, due to insufficient cognition; Take a gamble and change the trading rules; Changing plans is all due to insufficient understanding. It is your understanding of risk, trading logic, K-line, and fundamental sources of profit that led to all these erroneous behaviors. The basic principles of speculation have long been established, and all we need to do is understand and execute them. The threshold for trading is never the depth of knowledge, the accuracy of analysis, or how long you have been trading. The threshold for trading has always been understanding and executing. The king of speculation, Jesse Livermore, said: Speculation is as old as mountains, and there is nothing new on Wall Street. The basic principles of trading, which seem to be known by everyone, but the degree to which each person "knows" is different. Because the understanding behind these principles is divided into multiple levels, and also because the logic behind these principles is interconnected. To grasp all of this globally, you need to have sufficient insight. Therefore, it can be said that the gap between ordinary traders and top traders has always been the depth rather than breadth of understanding of various aspects of trading. Encouragement together!