The ten characters in the Tao Te Ching awakened me, the dreamer.
I still remember when I first got into trading, my mentor looked at my desk full of trading books and various technical analysis charts and casually said, 'In the end, trading is about subtraction.' I was taken aback at the time, subtraction? Isn't it better to learn more techniques?
Six years have passed. Today, when I opened my trading notes from six years ago, I truly understood the weight of this sentence.
Entering the market: thinking that 'more' is 'better'
Like most people, when I first started trading, my mind was filled with 'doubling' and 'financial freedom'. I chased whatever was popular in the market, piling up various technical indicators on the trading interface, as if that would make me look professional.
At that time, I had read dozens of classic trading books, frequented major forums, and followed various influential blogs. I naively thought that as long as I found that legendary 'winning system', I could sit comfortably and wait for the money to come in.
The result is predictable. After the first year, not only did I not make money, but I also completely lost my principal.
The market gave me a heavy blow, but it also woke me up: I was just an ordinary person, not destined to take shortcuts.
Transformation: From 'Addition' to 'Subtraction'
After losing my principal, I had to rethink the essence of trading. I stopped live trading and honestly began backtesting.
I pulled out the movements of mainstream coins and altcoins one by one, from hourly charts to monthly charts, meticulously reviewing each trade. After a few months, I finally had my own 'map': able to identify how the market transitions from consolidation to trend, and which structures are likely to present real opportunities.
I found that if I gave up all seemingly opportunistic opportunities and only made high-probability trades, I could actually achieve stable profits every year.
However, when I confidently traded again, I encountered consecutive liquidations. The worst was when a large bearish candlestick at night directly caused my liquidation on ETH. In that cold winter night, I walked aimlessly on the street for two or three hours, my mind was filled with questions: Why, when the method was correct, did the result still go wrong?
Moment of enlightenment: Ten words awaken the dreamer.
The turning point came when I reread the Tao Te Ching. Two sentences struck me like lightning: 'The opposite is the movement of the Dao, the weak is the use of the Dao.'
These ten words completely cut through the tangled mess in my mind.
The opposite is the movement of the Dao—things always have two sides. We enter the market to make money, but 99% of people lose money. Could it be that the direction we are pursuing is problematic?
The weak is the use of the Dao—always wanting to catch all market movements is 'strong'; admitting that one can only capture a segment of the market is 'weak'. To give up is to gain.
I suddenly realized. The essence of trading is not to predict the market, but to manage risk; it's not about maximizing profits, but minimizing risks.
My subtraction trading practice.
Realizing this, I completely restructured my trading system:
Limit risks and protect the principal.
I no longer pursue a high win rate, nor do I fixate on windfall profits. Before placing each order, I only ask myself one question: 'If this order goes wrong, can I afford the loss?' If I can't afford it, I resolutely do not trade.
Learn to give up, just take a scoop.
I gave up 80% of what seemed like opportunities. I only make trades that I understand, have backtested, and have a high probability. Profits are like a fat fish; the head and bones are hard, and the tail has many small spines. I only eat the middle, the most delicious part.
Reduce trading frequency.
I no longer trade every trading day. Now I only trade once or twice a week, or even less. This gives me enough time to wait for truly good opportunities.
Many people may say at this point: 'I already understand these principles.'
But just like 'smoking is harmful to health', every smoker knows that only when they are truly lying in a hospital bed do they really understand.
Trading is the same. That layer of window paper is not knowledge; it's realization. It's not what others tell you, but what you really understand after having sacrificed, lost, and suffered.
What does trading subtraction reduce?
Six years of tempering made me understand that the 'subtraction' in trading is not about reducing technical indicators or simply reducing trading frequency.
What is reduced is desire, obsession, greed, anger, and ignorance.
When we can honestly admit that we are just ordinary people without the ability to predict the market, we will willingly give up those opportunities that do not belong to us and will honestly do risk control.
In the end, trading is about subtraction. But this subtraction is not about reducing methods or frequency, but about reducing 'desire' and 'obsession'.
Only by giving up what should be given up can we gain what should be gained.
Now, I no longer face liquidations or large losses. It's not because I have become smarter, but because I have finally learned to admit my ordinariness, worked hard, and learned to give up.
To all the friends still struggling in the market, why not ask yourself: What can I 'reduce' in today's trading?
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