A few days ago, there was an article labeled “Investment Methodology”, “Emotion is the biggest enemy of the trading market”. The article is about people's completely different mental journeys as the trend of Bitcoin fluctuates.
It is true that behind every K-line that jumps up and down, there are countless traders' anxious eyes, greedy desires, and panic about whether the sky is going to collapse. But I read this article carefully, and there is no direct argument in the article that "emotion is the biggest enemy of the trading market."
According to my understanding, there are countless places to see "doing investment, you have to be patient, don't be impatient, don't be impulsive, don't be emotional" and so on, I think "emotion is the biggest enemy of the trading market" The biggest application scenario should be "making a good trading plan, not letting the market affect your emotions, acting firmly on your own plan" and "being careful before each transaction, don't be impatient."
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I have been receiving such education since the first lesson in my investment. I was so stunned that I saw "emotions are the biggest enemy in the trading market", and the familiar formulas seem to be so correct and impeccable. However, I have been educated by the market for seven or eight years, and I feel that there is something wrong.
Where is it wrong? The teacher taught me that when you are confused, you must learn to break the problem apart and solve it step by step.
First of all, the emotion, according to the definition of Baidu Encyclopedia, emotion, is a general term for a series of subjective cognitive experience, is the psychological and physiological state of a variety of feelings, thoughts and behaviors. The most common and popular emotions are joy, anger, sadness, surprise, fear, love, and so on. In the field of investment, we may wish to divide emotions into "greed" and "fear."
Let's analyze the reason why you believe that "emotion is the biggest enemy of the trading market." The big probability is that "when the currency was turbulent last year, because of fear and rashness, the meat was stopped, and the result was on the dog, I really shouldn’t be emotional. "The big probability is that Bitcoin fluctuated at $6,000 last year. The $6,000 is a sign of iron bottom. I bought it because of greed, and then fell to $3,000. It shouldn't be emotional." The big probability is "self." I plan to invest in eos for a long time. As a result, I can't attack the RMB 25 yuan for a long time. The signs of falling are more and more obvious. The days of quilt cover are on my mind, and I am worried. I just sold it. The result was just selling, and the eos flattened the onion and rose to 28 yuan. That confession, I really shouldn’t panic, I shouldn’t be emotional, I should stick to the strategy.”
Have you found any problems? If it is not found, we will switch the scene.
"When the currency was turbulent last year, I was afraid of it and sold it quickly. As a result, the stable currency proved to be seriously over-represented. Since then, I have been devastated and embarked on the road of zeroing. I am so dangerous, but fortunately I sold it at the time.咱 Continuing, “Bitcoin hit the 6,000 US dollars three times last year without breaking, which proves the effectiveness of the support, and buys itself. As a result, Bitcoin actually rose to 9,000 US dollars. It is very powerful, wise, buying at 6,000 US dollars is really "Too tactful." Continue, "eos long attack 25 yuan is not broken, according to the K-line theory, I feel that the possibility of falling is very large, gave up the strategy of the bear market fixed, sell, after the result of selling eos really turned down, Oops, good and dangerous, fortunately, I changed my strategy in time, decisively sold, too smart."
Have you discovered that the same scene, the same emotions, and whether the emotions produced are good or bad, are entirely derived from the identification of Zhuge Liang after the event, and are a kind of determination that the king is defeated. Success is good, failure is bad. Then sum up the lessons learned from the perspective of ex post. "Emotion is the biggest enemy of the trading market." If you get the treasure, you feel that you have finally opened up, and success is just around the corner.
Then use this sentence to guide yourself, "Emotion is the biggest enemy of the trading market", then I will not bring emotions, completely cold and rational. Coupled with the fact that we have heard many such stories, certain investment masters, insist on their own opinions, and insist on being alone, not being touched by any external ones, and have achieved great success. There is also the teaching of the classic quotes of Buffett’s "I am greedy when others are horrified, and I fear when others are greedy." I think Bitcoin can rise to 1 million, constantly adding and fixing, and rising in Bitcoin. When I was 20,000 US dollars, I added a position, and I couldn’t go up in Bitcoin and went down sharply. I was unmoved and continued to increase my position. Or because the digital currency has fallen sharply, the belief is shattered, and it is felt that eos is a scam, that is, garbage, it is necessary to return to zero, sell, sell, sell, even when it is around 11 yuan.
From the perspective of outsiders, will you feel that this is a fool or a madman? Or fall back into the shackles of defeating the king. Everyone will be confused, what should they do? So many people say that "emotion is the biggest enemy of trading", and Buffett’s father said so, did he really do this, why do you seem to be a fool or a madman?
There must be a problem, right?
Let us look at the word emotion again. It is the timely feedback brought about by our perception and interaction with the outside world. It can be externalized into a feeling. When greed, it is a feeling of being positive, comfortable and at least not painful, so I have to increase investment and even go all out. When you are scared, it is a kind of pain, and the feeling of anxiety is at least uncomfortable. I have to flee quickly. So how do we decide whether it feels good or bad? When you have a toothache, you hate the feeling of pain. When there is a fire, you can instantly feel the pain of a fire burn, and quickly flee, you will feel painful to save your life.
At this point, do you feel that the "emotion is the biggest enemy of the trading market" is absurd? It is like saying that pain is the biggest enemy of your own survival. It can obviously make you feel the danger in time, or it can be your friend. Then we said that "emotion is the biggest friend in the trading market", right? We obviously will find the same vulnerability. Emotion is just a subjective existence, just a kind of perceptual interaction ability that we have.
In fact, when we trade, there is a kind of subjective emotion that is correct. The other party is wrong. "The buyer and the seller have a silly cross." They trade with their existing knowledge and wait for the facts. Verification. Success, fortunately, my cognition is correct, failure should also lead to my own cognitive or low-conceptual conclusions, but how do you get the paradox that "emotion is the biggest enemy of the trading market?" Shouldn't the biggest enemy be low cognitive or wrong?
At the time of the transaction, because of the existence of the buyer and the seller’s opponent, half of the people lost money, and the other half must be profitable. If half of the people think that “emotion is the biggest enemy in the trading market”, the other half should feel "Emotion is the biggest friend in the trading market." Yes, for everyone's approval, "Emotion is the biggest enemy of the trading market?"
I know how to brush up to a high praise: When people take pictures and look good, they will feel that they look good. When you take pictures of ugly, you will blame the camera is not good or the person taking pictures will not take pictures? A: People always blame their success on themselves and blame others on failure.
Everything happened to be a matter of course. When we trade successfully, we have strong cognitive ability and high level. When we failed in trading, was it because of our low cognition, not because I was impulsive, sloppy, underestimated, and so on.
When everyone carefully looks at the logic of making money, useful information asymmetry to make money, useful cognitive asymmetry to make money, but have you heard that using emotions to make money? Or is patient people more likely to make money than people without patience? If that is the case, the gods of the world should be the old man who has been heavily tempered by the wind and the ice, and there is still something "from the ancient heroes to the young."
Father Buffett puts forward that "I am greedy when others are afraid, and I fear when others are greedy", but does he really rely on this to make money? If this sentence is so useful, why is there only one Buffett in the past 100 years? We take a serious look at Buffett's way of getting rich because of the choice of good industry and good business (the consumer industry and the energy industry are industries that have continued to develop rapidly for more than half a century). Being able to choose a good industry and a good company and firmly hold it is the real ability to resemble a black box. Others can't learn. Everyone can't think of the kindly loyal Buffett father who will deceive everyone.
In fact, everyone should not blame Buffett, and other "pseudo-prophet", blame yourself, blame you do not dare to really admit your own shortcomings.
The Buddha said, "People, please recognize yourself."
Also remember that when others say "emotion is the biggest enemy of the trading market", you have to tell him loudly "Sorry, the mood is not against this pot, your cognitive level is not enough to be the biggest enemy of your trade"!
(End of the article)
(Author: Waiting for Godot 178)