Many friends involved in trading have asked me this question, as there is a natural curiosity and even a sense of admiration for the profession of a trader. People tend to think that traders should be quite wealthy, able to make a lot of money by just casually tapping on the keyboard in front of a computer.

However, this industry is quite unique, with no formal vocational training, and the requirements to work at a legitimate institution are extremely stringent (essentially, it's for those with a master's or doctoral degree from a top 100 university in a relevant field), which means that many of our traders are self-taught and develop freely.

I myself had never been exposed to trading before the age of 30 and was completely ignorant of financial markets. Previously, I was in the foreign trade business, and after saving some money, I embarked on the path of a self-taught trader.

This path is very liberating; you can choose to indulge your human desires, chasing the market trends by buying high and selling low, or you can be very disciplined and demand a lot from yourself. It is this degree of freedom that allows each trader to present a completely different state in front of this vast market.

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I have been trading for a full 12 years, experiencing failures and getting back up, so I have a lot of experiences of both failure and success to share. Today, I will discuss how to navigate the path of a self-taught trader in order to possibly see the dawn.

1. Never start with a live account at first; learning is more important.

The barrier to entry for trading is very low; you can simply open an account and prepare some money to begin. Sometimes it's even like playing a game, when money becomes a number, rising and falling in your account, it seems like everything is very simple.

Many novices have beginner's luck when they start trading. If they happen to make money right away, they will underestimate the risks of trading and overestimate their own trading abilities, thinking they are particularly talented. At this point, if they encounter bad luck and suffer losses, it is essentially a devastating blow to themselves.

So, if you decide to pursue the path of a trader, you should absolutely not start with a live account right away. Many people come in with a "let's give it a try" mentality and end up becoming addicted and unable to extricate themselves.

From the beginning, we must have a psychological expectation: the more money you want to make, the more risk you must bear. Trading is not a surefire way to make money, nor is it something that ends after one or two attempts. You must be prepared for long-term learning and in-depth research.Please treat the following passage seriously, as I have personally experienced all of this. Initially, I was fortunate to make a lot of money, which led to arrogance, and then I suffered significant losses. After that, I became addicted, and my trading perspective was extremely distorted for a long time, which was a very bad state to be in.

2. What should one learn to do well in trading?

I will use futures as an example to briefly explain, and you can apply the same principles to other markets.

(1) Basic knowledge of futures trading, including the types of futures traded, trading rules, trading hours, the use of trading software, contract knowledge, and so on.

(2) Trading techniques, including candlestick charts, indicators, patterns, the logic of trends, trading systems, and money management.

(3) Building a trading system, which includes reviewing the system, analyzing data, modifying details, improving standards, and forming a complete trading system.

These topics are all very fundamental and can be mastered by reading a few professional books. However, more than 90% of self-taught traders may not have gone through such an in-depth learning process.

It is possible to open and close positions without studying, just as you can drive an automatic car by starting it, stepping on the brake, and shifting gears. It's simple, but to get a driver's license, you have to study, practice, and pass four subjects. To truly drive on the road, you need even more practice, and to drive on the highway alone, you need at least a year of driving experience.

Trading is 100 times more difficult than driving. Driving is regulated by rules and regulations that you have to follow, whereas the world of trading is completely unstructured and relies on self-discipline. Therefore, as a self-taught trader, you should be even more disciplined, approach trading with a serious attitude, and study it diligently to have a chance at profitability.

3. The pace of entering live trading should be moderate.Having a trading system does not mean that we can start making profits immediately, which is a common misconception among many traders who believe that a trading system is the sole condition for profit.

A good trading system accounts for 50%, and the execution process also accounts for 50%. To improve execution, it is necessary to conduct extensive testing and statistics. You can use a demo account to simulate live trading, testing how your trading system performs in real market conditions. This can save you a lot of money because you might only be wasting time, but your money is still in your pocket.

However, if you jump straight into live trading and use your own money to test strategies, you might end up losing both your money and time.

Wait until you have confirmed that your trading system is effective in practice, then enter the live market with a light position to test your tolerance. For example, determine how much position you are comfortable with, and ensure that trading does not impose too much psychological burden until you find your limit, and then gradually increase your position.

In fact, most self-taught traders have gone through the same process, starting as novices who suffered losses, then learning, establishing their own trading systems, and gradually accumulating profits.

However, many people die in the novice period of losses because they run out of money, their confidence is shattered, and they are confused about the future, not knowing the right path or what is right or wrong. Their trading perspective has gone astray, and it is difficult to correct.

Therefore, the attitude with which you enter trading is crucial, determining whether you will be on the right path in the future, which is why I hope you can avoid pitfalls during the novice period.

Finally, I want to remind everyone that trading is different from anything else we do. If we fail a driver's test, we can retake it; if we make a mistake at work, we can find another job; if a relationship fails, we can start a new one. But if trading fails, it could be a quagmire of losses, like a swamp that drags you in, no matter how hard you struggle, you cannot escape. You could lose all your savings, turn decades of accumulation into nothing, become heavily indebted, and have no hope for the future, making life feel like a desperate situation.

So the path of a self-taught trader must be steady and solid, it can be slow, but it cannot be wrong.