Although the prerequisites required by short-term traders and long-term investors are different, they must be logical and able to provide real and effective help.

1. Survival is the first priority

It's not a cliche, speculation is a very dangerous activity. Speculation is not as simple as winning or losing. The first task is to survive the fluctuations between peaks and troughs. If you cannot survive, you are not qualified to win at all.

Even with good money management, the right systems and a prerequisite for action, it is very important to control yourself.

The first requirement for survival is that all your transactions need to be justified. Reasons such as rumors, reminders from others, good weather, or feeling good today are not enough to be the basis for trading. This basis should be based on facts or truth before it can become the premise for your actions.

Although the prerequisites required by short-term traders and long-term investors are different, they must be logical and able to provide real and effective help.

It is undeniable that there are methods and theories that can tell you how, how and when the market will move, but there are not many useful methods. More methods and theories on the market are ineffective. Before going crazy in the financial markets, it is recommended that you spend enough time to understand these key things.

Even with good money management, the right systems and a prerequisite for action, it is very important to control yourself.

2. Everything is still a game of emotions after all

Any time your money is involved, your blood will boil, your palms will sweat, and your nervous system will short-circuit with all kinds of ridiculous emotions. This causes many traders to still buy when they should be selling; or fear keeps them away from what could have been great investment and trading opportunities; perhaps, their bets are too big, It made them a little scared. At this time, decision-making becomes a slave driven by emotions, and rationality and logic disappear.

3. Greed prevails - Prove that you are driven more by greed than by fear

If you consider yourself a speculator, this means one simple fact: you should be less fearful than the average person. What drives you is making money and being profitable.

Speculators are easily driven by greed, which makes greed their most fatal weakness. Greed creates unrealistic hopes and drives you to hold on to positions that are already losing money. Hope is a trader's worst enemy. It often makes people fall into the dream of huge profits and forget the true appearance of the real world.

The world of speculation has a cruel reality. Huge losses will leave people with nothing, broken marriages, and disintegrated families. Larry himself always takes these issues very seriously to warn himself not to be blinded by greed and to help him exercise self-control. Everyone has a different approach to their own greed, and Larry's own approach is just a reference. But he emphasized that if you want to survive in the market, you must be able to control yourself.

4. Fear makes you want to run away - but sometimes you have to take risks

Fear makes people want to escape and stop doing what they should do. Fear makes you run away from transactions that can continue to make profits, and makes you hesitate to face losing positions. Fear often makes people do things they shouldn't do, but makes people afraid to do things they should do.

Even worse, they miss out on winning trades. Why? The more likely it is that it will become a big profit opportunity, the more frightening the process of holding a position will be. Many investors are scared away by themselves.

5. Big funds are not meant for making big bets

Larry mentioned a type of traders, including Jesse Livermore, John Warner Gates, Victor Niederhoffer, and Frank Joe, who all belong to this type of traders. They all had their moments of glory, but ultimately failed with big money and big bets.

Use your money wisely and never bet too big. Because the losses caused by all-you-can bets will destroy you in the market, remember the first thing Larry said: Survival is the first priority.

Just like Russian roulette, maybe you think you've won many times and haven't lost yet. But if you bet on this for a long time, there is only one final result: death. The same is true in the speculative market. Making big bets over the long term will only make you a loser in the end. Blindly hitting and rushing is destined to be a loser's game, and this approach is doomed to failure for traders. Larry said that he never invests too much money and only invests a small part of the money in his account at a time. This is an effective way to control losses.

6. Your wealth will come from your focus

A person who travels through all trading markets can never become a successful trader. Why? Because traders need to focus on the market and pay attention to many details happening without having time to look around. Distractions in trading come with costs. Distraction can cause you to miss an important trade or result in huge losses.

Focus not only means concentrating on the current task, but also means that the trading vision should be focused on one or two markets or the concentration on the use of trading methods. Like those great athletes, they must have their own specialties; the greatest achievements of artists are also limited to a few areas. No matter what career you are in, the more focused you are, the greater your achievements will be.