The essence of trading is "rules" and "sample size"🧵 Roadmap to...
Yumi🌸@samuraipips358
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Feb 25, 2025
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The essence of trading is "rules" and "sample size"🧵
Roadmap to success in trading
↓Thread 1/6
Roadmap to success in trading
↓Thread 1/6
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The essence of trading lies in adhering to established rules and demonstrating the superiority of those rules through a sufficient sample size.
Rules cover all aspects of trading, such as market analysis, trade timing, and risk management.
And, sample size refers to the process of pursuing profits probabilistically by repeating trades based on the rules many times.
However, putting this simple principle into practice is not easy for inexperienced traders.
This is because emotions become a significant barrier.
The essence of trading lies in adhering to established rules and demonstrating the superiority of those rules through a sufficient sample size.
Rules cover all aspects of trading, such as market analysis, trade timing, and risk management.
And, sample size refers to the process of pursuing profits probabilistically by repeating trades based on the rules many times.
However, putting this simple principle into practice is not easy for inexperienced traders.
This is because emotions become a significant barrier.
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Emotions in trading reflect your current thought processes and beliefs.
Emotions in trading, unlike primary emotions such as fear of thunder or darkness, always require your recognition and understanding.
Babies do not get angry or happy when looking at charts because they do not assign any meaning to them.
How you perceive your own actions and results triggers emotions in you accordingly.
In trading, if you value or focus on immediate wins and losses, emotions will prompt you to take actions in line with those results.
For example, if you experience a series of losses, doubts arise such as "Is this rule wrong?", leading to impulses to win even by breaking the rules, or making hasty decisions with a very small sample size. This is because you place great importance on immediate results.
In this way, emotions are based on your thoughts and beliefs, and because emotions are byproducts of thoughts and beliefs, they are always perceived as "correct" for you.
Therefore, resisting emotions is very difficult and becomes a factor that hinders rule-following.
Emotions in trading reflect your current thought processes and beliefs.
Emotions in trading, unlike primary emotions such as fear of thunder or darkness, always require your recognition and understanding.
Babies do not get angry or happy when looking at charts because they do not assign any meaning to them.
How you perceive your own actions and results triggers emotions in you accordingly.
In trading, if you value or focus on immediate wins and losses, emotions will prompt you to take actions in line with those results.
For example, if you experience a series of losses, doubts arise such as "Is this rule wrong?", leading to impulses to win even by breaking the rules, or making hasty decisions with a very small sample size. This is because you place great importance on immediate results.
In this way, emotions are based on your thoughts and beliefs, and because emotions are byproducts of thoughts and beliefs, they are always perceived as "correct" for you.
Therefore, resisting emotions is very difficult and becomes a factor that hinders rule-following.
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Instead of trying to control emotions, changing the thoughts and beliefs that are their source is a shortcut to trading success.
Since emotions are rooted in thought processes and beliefs, by changing these, emotions will naturally change as well.
For example, if you start to see trading not as gambling but as a probability-based business, your emotions will also align with that.
Even with consecutive losses, the thought "This is probabilistically possible, and it's important to keep following the rules" will stabilize emotions and make it easier to follow the rules.
However, these beliefs and thought processes do not change with mere intellectual understanding.
Beliefs are very powerful, so no matter how much you understand them theoretically, it is not easy to transform them.
But experience transforms your strong beliefs.
No matter how logically you can explain that ghosts do not exist, if you repeatedly have the experience of ghosts appearing before you, you will come to believe in the existence of ghosts no matter what anyone says.
Nothing is as persuasive to convince you as experience.
That is why probabilistic "thinking" is not just thinking, but needs to be embodied as probabilistic "action" through experience, and what is needed there is experience and practice.
Instead of trying to control emotions, changing the thoughts and beliefs that are their source is a shortcut to trading success.
Since emotions are rooted in thought processes and beliefs, by changing these, emotions will naturally change as well.
For example, if you start to see trading not as gambling but as a probability-based business, your emotions will also align with that.
Even with consecutive losses, the thought "This is probabilistically possible, and it's important to keep following the rules" will stabilize emotions and make it easier to follow the rules.
However, these beliefs and thought processes do not change with mere intellectual understanding.
Beliefs are very powerful, so no matter how much you understand them theoretically, it is not easy to transform them.
But experience transforms your strong beliefs.
No matter how logically you can explain that ghosts do not exist, if you repeatedly have the experience of ghosts appearing before you, you will come to believe in the existence of ghosts no matter what anyone says.
Nothing is as persuasive to convince you as experience.
That is why probabilistic "thinking" is not just thinking, but needs to be embodied as probabilistic "action" through experience, and what is needed there is experience and practice.
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Probabilistic thinking means believing in the superiority of rules from a long-term perspective, rather than being overjoyed or saddened by the results of individual trades.
To embody this, the following steps are necessary:
👉Education and Preparation
Acquire the necessary knowledge for trading, such as market mechanisms and technical analysis.
👉Rule Establishment
Build a trading strategy that suits you and define clear rules.
👉Backtesting and Practice
Verify the effectiveness of the rules through a large sample size, and experience "in chronological order" how the randomness experienced there probabilistically converges as a large sample size is built, and deepen your understanding.
Because belief transformation requires "experience," backtesting must be done "manually," "experience randomness in chronological order," and repeatedly experience the convergence of probability while building a large sample size with rule-following behavior.
In this way, by thinking probabilistically, it is important to focus on the win rate and risk-reward balance from a long-term and statistical perspective, rather than immediate wins and losses.
Let's create a thought process of "Even if I lose a few times, I will eventually be in profit" and "Keep winning with win rate x risk-reward."
By taking these steps, your way of thinking about trading will change, and your emotions will also align with it.
Until now, you prioritized immediate results over following rules, making it emotionally difficult to follow rules. But now, you will emotionally resist breaking the rules, making it difficult to break them.
Probabilistic thinking means believing in the superiority of rules from a long-term perspective, rather than being overjoyed or saddened by the results of individual trades.
To embody this, the following steps are necessary:
👉Education and Preparation
Acquire the necessary knowledge for trading, such as market mechanisms and technical analysis.
👉Rule Establishment
Build a trading strategy that suits you and define clear rules.
👉Backtesting and Practice
Verify the effectiveness of the rules through a large sample size, and experience "in chronological order" how the randomness experienced there probabilistically converges as a large sample size is built, and deepen your understanding.
Because belief transformation requires "experience," backtesting must be done "manually," "experience randomness in chronological order," and repeatedly experience the convergence of probability while building a large sample size with rule-following behavior.
In this way, by thinking probabilistically, it is important to focus on the win rate and risk-reward balance from a long-term and statistical perspective, rather than immediate wins and losses.
Let's create a thought process of "Even if I lose a few times, I will eventually be in profit" and "Keep winning with win rate x risk-reward."
By taking these steps, your way of thinking about trading will change, and your emotions will also align with it.
Until now, you prioritized immediate results over following rules, making it emotionally difficult to follow rules. But now, you will emotionally resist breaking the rules, making it difficult to break them.
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It is no exaggeration to say that trading is all about "rules" and "sample size".
Even if you set superior rules, it is meaningless if emotions get in the way and you cannot follow them.
However, emotions are "natural reactions" generated by thoughts and beliefs, and there are limits to suppressing them by force.
That's why, first, let's acquire probabilistic thinking, and then build a sufficient sample size to construct a thought process and emotions where "following rules is natural".
Eventually, following rules should become a "emotionally" comfortable state.
When you reach that point, you will have built a foundation for consistently achieving stable results as a trader for the first time.
This is "maturity" as a trader.
This thread is a brief summary of my two books.
If you want to know more details or haven't read them yet, please do read them.
They explain in detail the essential items for building a foundation as a trader.
【THE PATH TO SUCCESS IN TRADING】
E-book:payhip.com/b/H1ZBo
Paperback:a.co/d/fXmRhIa
【Trading Psychology】
E-book:payhip.com/b/SNnJC
Paperback:a.co/d/d0QJMxK
Hope these insights help your trading journey 😊
It is no exaggeration to say that trading is all about "rules" and "sample size".
Even if you set superior rules, it is meaningless if emotions get in the way and you cannot follow them.
However, emotions are "natural reactions" generated by thoughts and beliefs, and there are limits to suppressing them by force.
That's why, first, let's acquire probabilistic thinking, and then build a sufficient sample size to construct a thought process and emotions where "following rules is natural".
Eventually, following rules should become a "emotionally" comfortable state.
When you reach that point, you will have built a foundation for consistently achieving stable results as a trader for the first time.
This is "maturity" as a trader.
This thread is a brief summary of my two books.
If you want to know more details or haven't read them yet, please do read them.
They explain in detail the essential items for building a foundation as a trader.
【THE PATH TO SUCCESS IN TRADING】
E-book:payhip.com/b/H1ZBo
Paperback:a.co/d/fXmRhIa
【Trading Psychology】
E-book:payhip.com/b/SNnJC
Paperback:a.co/d/d0QJMxK
Hope these insights help your trading journey 😊