EagleTrader trader丨How to regain trading confidence step by step after experiencing a “cognitive cross-border” liquidation

In trading, we often use the number of years of trading to judge whether a trader is “experienced”, but time is never a bargaining chip that can be cashed out automatically.

More than ten years of experience may mean that you have seen more market conditions, or it may also mean that you are more likely to be overconfident in certain judgments. It was at this stage that Li Zhao experienced the liquidation that he still remembers clearly.

In this interview with an EagleTrader trader, he recalled the experience that became a turning point in his trading career.

More than ten years of trading experience does not mean that you are always on the right track

This kind of deviation often does not come from lack of ability, but occurs when traders have excessive trust in their own system.

Li Zhao’s exposure to foreign exchange trading began around 2010. For a long time, his manual trading performance was not bad: his account doubled many times, retracement was controllable, and the rhythm was clear. He is not the type of trader to rush into the market unprepared.

It is precisely because of this that the liquidation was particularly stinging – it was not a concentrated outbreak of technical errors, but a cognitive transgression.

At the time, he was using a programmatic strategy that he didn’t fully understand. In just half a day, all the funds in the account were quickly depleted. Looking back on this experience many years later, his judgment became extremely clear:

As long as a set of strategies has not been fully verified by himself, its risks can never be truly priced, let alone be entrusted with real money.

From “wanting to capture more” to “only doing familiar things”

Today, Li Zhao still relies on technical analysis in his trading decisions, accounting for about 60%. He hardly involves fundamental analysis and will actively avoid important data and news release periods.

In his view, all information that can be traded will eventually be reflected in price trends; too much subjective judgment can easily interfere with the execution itself.

Compared with the early days, his biggest change is not reflected in the method, but in the choices-only trading familiar forms, only trading inTake action at a fixed time period and only intervene after the signal is fully established.

In order to weaken the erosion of emotions on judgment, he even extended training beyond trading: meditation, fitness, and deliberate practice of concentration. These actions themselves will not directly bring profits, but they will allow him to truly stop at the moment when he must restrain himself.

Addition, retracement and the “stop button”

In terms of position management, Li Zhao’s principles have almost no ambiguity.

He will only add positions on orders that already have floating profits; once there is a loss in the added position, he will immediately accept the result and stop trading for the day. This is not a formal display of discipline, but a “hard brake” he set for himself after experiencing a retracement.

Faced with a large retracement after profit, he dealt with it decisively: placing orders to maintain capital, and placing orders to stop losses decisively.

There is only one premise for all operations – to retain the qualification to continue trading.

“Keep the green hills alive, don’t worry about running out of firewood.”

In his system, this is not a slogan, but an iron law written into the execution level.

Why choose to take the proprietary trading exam at this moment?

In Li Zhao’s view, when trading enters a stage that needs to be recalibrated, external rules become a necessary tool.

This year, in order to prepare for the proprietary trading exam, he systematically studied price behavior and adjusted his original strategy accordingly.

Rather than passing the exam, this is more like a proactive structural review.

Under the clear rules framework, he had to re-examine his position allocation, risk proportion and trading rhythm.

If he wanted to sum up the biggest change brought about by this experience, his answer finally fell on one word: money management.

A trader who is still on the road

If the risk tolerance score is 100, he will only use one-tenth of it on each trade.

After experiencing a large retracement, he is no longer eager to return to the high point of net worth, but defaults to taking 2 to 3 times as long to repair the curve – because after that, caution itself has become part of the strategy.

When asked if he had any advice for new traders, he did not have an answer. “Not yet,” he said, “I am still in the process of regaining my trading confidence.”

Perhaps, for a trader who has been in the market for more than ten years, being willing to admit that he is still adjusting and repairing is a profound and real progress in itself.