I haven't even read the "Japanese Candlestick Chart" carefully. Do I really need
Yes, to excel in trading, it's not just about acquiring a wealth of trading knowledge; it also requires the ability to simplify the complex, otherwise, you may lose yourself amidst a plethora of intricate information. If you don't study at all, you're prone to being led astray by your own human nature, leaving you unable to find the reasons for your losses.
Everything we do has a cause and effect, a beginning and an end. The consequences of reckless indulgence are akin to the days before the college entrance examination when your classmates were burning the midnight oil under the lights, while you were playing games in an internet café. The divergent paths of life that result are a lesson in themselves.
Those who understand self-restraint, who take the initiative to learn, and who cherish opportunities will thrive regardless of the field they are in.
Diverting a bit, let's talk about what needs to be learned in trading.
1: We need to grasp the basic knowledge of technical analysis.
I often encounter friends with a weak grasp of technical knowledge, which makes communication very inefficient.
For instance, if you haven't read "Japanese Candlestick Charting Techniques" and don't understand candlestick charts, it's difficult for you to comprehend the points I'm making when we discuss trading techniques. For example, when the market retraces to the 50% level and a reversal candlestick pattern forms, that's when you should place an order. Many people wonder, what is a reversal candlestick? Why should you place an order when a reversal pattern forms? At such times, I don't know how to explain it, so I can only advise everyone to read the books themselves.
Therefore, learning basic technical knowledge is akin to learning Chinese pinyin in elementary school. Once you've mastered it, you can look up words in a dictionary, type, and learn unfamiliar characters on your own.
A trader should at least finish the basic knowledge of candlestick charts, understand the most fundamental components of candlestick charts, the meanings of candlestick patterns, the concept of trends in Dow Theory, and the concepts of support and resistance levels, etc.
"Japanese Candlestick Charting Techniques" and "Technical Market Analysis for the Financial Markets" are two books that are well worth reading, and they are worth revisiting until you thoroughly understand and master their content. The material inside is very foundational; if you can't bear the hardship of learning, then you will certainly not be able to endure the repeated beatings of the market.2: To learn the basic knowledge of the trading market.
A friend asked me: What kinds of products do you trade?
I said I trade more in the major forex pairs.
Then someone would ask: What is a major forex pair?
I said: EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/CAD, AUD/USD, NZD/USD, these are the 7 major pairs.
He would then ask: Why are these considered major pairs?
I feel that if we continue to talk, I could go through all the basic knowledge of forex, but in reality, it's meaningless because this information can be easily found online. The opportunity to communicate with someone is not easy, so it's better to ask more in-depth questions.
These basic knowledge of forex markets, such as types of products, quotations, pip value, quote currency, settlement currency, bid price, ask price, spread, overnight interest, margin, lot size, etc., are all closely related to daily trading and must be mastered.
I also encountered a friend who closed the position order window at the bottom of the computer version of MT.4, and when he wanted to close a position, he couldn't find it and hurriedly sent me a message. At first, he couldn't explain it clearly, saying the order was gone? It took a while to clarify that the software window was closed. I told him to select "Terminal" from the menu at the top to pop up the window, and by the time the order was found, the opportunity to close the position had been missed.
Just like this, due to not learning the most basic and simplest knowledge of the software well, real money was lost, and the bright banknotes were missed.There are indeed many similar instances where numerous individuals struggle with the most basic software functionalities, such as adjusting windows, modifying colors, or adding indicators. They hold a multitude of positions, only to find themselves unable to locate their orders or unsure of how to set stop losses and take profits.
Losing money due to these fundamental operational errors is truly more grievous than the injustice suffered by Dou E.
3: Misconceptions about learning to trade.
There are numerous perspectives online that dismiss the value of learning to trade, which I can particularly empathize with. Some people, despite extensive learning, still fail to achieve profitability, leading them to conclude that learning is meaningless.
Others argue that many trading legends have not really studied much and possess innate talent. For instance, Jesse Livermore never studied, Fu Hai Tang is a farmer, and Xu Xiang is not highly educated. However, we only see the halo around them but overlook the efforts they have made.
In "Reminiscences of a Stock Operator," Livermore spoke about how diligently he drew charts. Xu Xiang even drew thousands of candlestick charts himself. Fu Hai Tang's success in futures trading is also due to his in-depth research in the areas he excels in. There is no such thing as easy success; effort, timing, and luck are all crucial.
There is also a saying: To touch good cards, one must ensure they remain at the poker table. That's the principle.
If one does not even make an effort and just lies down passively waiting for success to arrive, it is highly unlikely that the opportunity will come. Opportunities are still reserved for those who are prepared. Let us all encourage each other with this sentiment.