If you cannot strictly follow discipline, you might make 10,000 mistakes; but if you can strictly adhere to discipline, you won’t make a single mistake.

Phase 1: Learning to Read Key Levels

When you first enter a market, you'll likely encounter various comments and suggestions, some mentioning indicators like RSI, KDJ, MACD, etc., and others referencing trend lines, winding theory,  wave theory, and more. If you're interested in the market, you’ll find resources to study these theories, which provide the basics of technical analysis. As you build your foundation, you’ll learn the simplest method—reading key levels. Over time, you’ll understand the significance of support and resistance levels, their importance, and which levels matter most.

Technicians often believe that once you can accurately identify key levels, you won’t lose money; you’ll know when to enter a position and set a reasonable stop-loss price. Sometimes, you’ll even set a reasonable exit point. However, at this stage, you’re unlikely to be profitable; simply being able to identify key levels isn’t enough.

Phase 2: Learning to Identify Direction

After Phase 1, you realize that merely identifying key levels isn’t enough to ensure profitability. You start using indicators to determine short-term entry and exit points and apply broader cycle theories to judge the overall trend. At this stage, your account may begin to show profits, and you understand the importance of letting profits run. However, consistent income remains elusive. You might catch a major trend and see your account grow several times over a few months, only to lose it all back later.

Because you cannot consistently grasp the overall market direction, you might frequently test trades during choppy markets, hit stop-losses, and then lack the courage to enter when a major trend emerges. Overall, this is a long process of accumulating experience, and many investors leave the market during this phase.

Phase 3: Learning to Judge Between Trends and Consolidations

You begin to assess the market's current state by analyzing the broader economic environment, supply and demand, purchasing power, and long-term technical cycles. You also incorporate concepts from behavioral economics, herd behavior, and market equilibrium theories to gauge market sentiment. Using these factors, you form a comprehensive judgment about the market's direction. Over time, you become familiar with the temperament of the assets you invest in, much like how a romantic expert becomes adept at understanding women through experience.

At this point, your account starts to show stable profits. You won’t be swayed by short-term fluctuations or news, whether positive or negative. You also understand that in some situations, it’s acceptable to widen your stop-loss because certain fluctuations don’t affect the big picture. Your biggest takeaway is learning when to hold cash and wait, knowing that if it’s not money meant for you to earn, you shouldn’t pursue it.

Phase 4: Understanding Economic Cycles Without Being Influenced by the First Three Phases

You become a true investor, no longer influenced by the phases of speculation in the earlier stages.

We Need Both an Investment Decision System and a Belief System

There’s a famous saying on Wall Street: "Mediocre traders trade with techniques; top traders trade with conviction." This statement highlights that the difference between a mediocre trader and a master trader lies not in technical skills but in trading beliefs and internal strength.

Many people possess a profitable investment decision system but fail to execute it, often because they doubt the system and lack conviction in it. Hence, there’s a well-known saying in the investment world: "We need both an investment decision system and a belief system."

People often attribute successful traders' achievements to their intelligence and hard work, but that’s far from sufficient. For investors, the key factor controlling the success of their trades is belief—one’s level of confidence determines the size of their achievements.

It’s said that whenever Napoleon took the field, the soldiers’ combat power doubled. Much of an army’s fighting strength depends on the confidence of its leaders. Before a major battle, the leader's confidence can greatly enhance the army’s courage and combat power. Conversely, if the leader shows doubt and panic, the entire army will likely fall into chaos and waver.

A person’s spirit and ability, like an army, also rely on the support of their will and beliefs. Those with strong convictions can achieve extraordinary things even with the simplest trading system. Doubtful and timid people, however, often accomplish nothing. A person’s level of achievement usually does not exceed their level of self-confidence. The prerequisite for success is confidence.

So, how can we develop firm belief in our investment decision system? The answer is simple: Familiarize yourself with the system, understand it, and integrate it. Technical aspects must be deeply integrated with a trading philosophy you believe in, creating an internal source of thought. Only then can the technology take root. Technique is essentially a form of thought. Only when you fully understand and believe in your system can you use it smoothly, without obstacles. Techniques learned second-hand will lack internal strength, like duckweed on water, easily scattered by wind and rain.

The journey toward perfect trading is a continuous process of aligning with oneself—integrating an external system with your internal self, moving towards consistency and unity.

When we first start trading, we operate with other people’s systems and strategies. As a result, when we encounter difficulties, we tend to question the system, leading to investment failures. Gradually, we begin to reflect on ourselves through these failures and start to develop our own trading methods and philosophies. We transform what was once "someone else's" into "our own." Only at this point do you fully integrate the system with yourself and begin to establish your own trading beliefs and internal strength, achieving a state of unity between yourself and your tools. It is only when you operate with a system born from your own practice and understanding that you can trade with peace of mind and confidence, leading to inevitable and sustained success.

Repeated operation and constant reflection quickly transform someone else's trading system into your own. Initially, differences in thought may cause your use of others' systems to feel awkward and rigid. However, as you continue trading, you’ll gradually understand the system’s principles and philosophy, integrating them into your thoughts and beliefs. Perfect trading is always your own trading—using a system you can fully understand and agree with.

Throughout your trading journey, if you start operating a system without fully understanding the significance of each step or how the system generates profits, and if you judge the system based solely on a few trades’ profits and losses rather than its principles and market philosophy, such trading will inevitably lead to losses and failure.