As a trader, finding your investment direction and establishing the right trading mentality is a seemingly easy, but in fact difficult and lengthy course. This course is not the same. Some courses may require studying trading strategies first, while others may require multiple actual exercises. Some experienced traders may not have found it, while some newbies may suddenly realize it soon after starting trading.

Therefore, this chapter will guide investors/traders to establish the foundation in this regard with the simplest and most necessary points.

Set up investment rules

Successful traders have already set their own investment rules. When to enter and exit the market, when to increase the position or execute the order of reducing the position and stop loss have become a habit or even a natural reaction. However, this is by no means a random operation based on feelings. Some traders use technical analysis as a signal, some use the time axis as a basis, and some use price distance or capital size as an objective standard for entry and exit. Newbies should also first establish a simple trading strategy. If it is too complicated, it may have a counterproductive effect.

Understand the psychological preparation for losses

No trader will never lose money in the market. What needs to be done is to have the right mindset when losing money. New traders may need to prepare for losses in order to adapt to and explore the market. Many unsuccessful traders are afraid of facing losses, and are unwilling to take the first step after thinking about it. After entering the market, they are unwilling to accept losing orders and are unwilling to stop losses, which may result in forced liquidation. Behind successful traders, there are definitely countless accumulated losses, because this is part of trading. They will review their trading strategies to avoid repeating mistakes, manage risks for each transaction, and limit losses to protect profits.

Trading mentality adjustment

Emotions are absolutely the enemy of traders, because once fear and greed are not properly handled, trading failures can begin at any time. When profits are made, people's mentality is always somewhat inflated, and the trading rhythm is inevitably affected. They may frivolously increase their positions and may extend the trading time in the hope of greater profits. On the contrary, when there are some losses in trading, they will doubt their trading strategies, psychologically begin to magnify market news or data, and feel uneasy. They may make random trades to make up for the losses. There are also some examples where, when losses occur, traders will be overly worried and rush to leave or "lock positions" without being firm; when profits occur, they will have a short-term mentality of small bargains and have no patience to close positions too quickly. These are common bad habits in trading, and such undisciplined trading will ultimately be difficult to achieve long-term success.

These are just some of the basic points. On the road of trading, traders need to spend more time to learn and digest them. However, as the saying goes, all roads lead to Rome, traders can also communicate with fellow travelers and find their own unique trading system.