The mindset of a trader determines success or failure.

Every trader believes their position will likely align with market trends when opening a trade. Traders lacking probabilistic thinking often exhibit two behaviors: heavy positions and no stop-loss, as they fail to guard against low-probability events. Thus, regardless of past profits, a single black swan event can force a trader out of the market.

The persistence of water wearing away stone is not due to the force of the flow in the short term, but whether the flow can continue unabated over time. As long as the stream flows steadily, even a mountain-sized boulder will eventually be worn through. Perseverance, year after year, will ultimately recreate the natural miracle of water wearing away stone. A broad-minded attitude is positive; even if Mount Tai collapses, one must remain steadfast and continue trading according to principles. Many things seen on the surface are mere illusions, and even the end is just a perfect answer to the process.

Although I had strong predictive abilities long ago, I never predict in trading. Predictions can have significant side effects on long-term trading and violate the principle of simplicity. Predictions can assist in analysis but should never be the basis for trading. Trading is more of a mission than an art. Only when one is mentally unburdened can one adhere to the principle of simplicity in trading. The ultimate simplicity, following nature, allows one to achieve simplicity, happiness, health, and success in trading, life, and career.

Even if one temporarily succeeds on the wrong path, failure is inevitable; conversely, even if one temporarily errs on the right path, as long as the direction is correct, faith is firm, and execution is in place, the outcome will ultimately be victorious. Living without regrets, even a day may be worth a lifetime. How long one lives is not important, as life will eventually end, but only thoughts and spirit can achieve immortality. Thirty years may be too short. If one trades simply and easily according to the true essence of trading, those thirty years will be happy and peaceful, and also thirty years of water wearing away stone. However, no one starts something with a thirty-year or lifelong perspective. Short-sightedness determines that most people, even if busy all their lives, will achieve nothing. If thirty years pass without success, or even if there is success but it ultimately fails, that is the most terrifying.

Mindset determines the pattern; the mindset in youth largely determines the direction and fate of a lifetime. Following nature is correct, but merely liking trading is far from enough. Without the belief and will to pursue it for a lifetime, it is difficult to achieve true training and accomplishment. If young people waste their precious time on so-called impulsive actions, they will not only fail to gain much joy but may also experience more failure, pain, and regret. For thousands of years, the value of life has been changing, but the rules of value itself have not. Observing from another perspective may bring a different mindset. An old saying goes, "The younger generation is to be feared," but perhaps it is not the younger generation that is to be feared, but the thoughts and spirit representing an era.

If you believe you can live, as long as you don't give up, you will live. Otherwise, even if you live but give up, there is no difference from being dead. Although "water wearing away stone" is a short phrase, each word is worth a thousand gold. Seeing through things may not necessarily be meaningful, as seeing through is just the basics, and only by achieving unity of knowledge and action can one reach the ultimate goal. Luck is the enemy of trading and the main culprit leading to the collapse of countless people's funds. Each trade is ordinary, like eating. At any time, especially during trading, despairing words should not appear. When words like emotion, feeling, and mood appear, it means the inner demons of emotional trading are at work, and feelings are the most unreliable things, often the source of failure in trading.

Excessive effort often backfires. Effort implies dissatisfaction with the status quo. If effort is misguided and emotional, it is hard to avoid going astray. However, this does not mean opposing effort. In the initial stage of trading, effort is relatively important, especially on the right path. Once reaching the final stable profit stage, effort becomes irrelevant. When a thing is about to undergo a significant qualitative change from quantitative change, it often faces unprecedented resistance, such as human thinking. The difference between breakthrough and closure is just a step away. On the right path, especially in the initial stage of trading, effort is still necessary.

Trading is a process of continuous learning and accumulation. A trader with 20 years of experience and a novice with 2 months of experience are vastly different. However, this does not mean that the longer the trading experience, the better the trader. The fundamental reason is that many traders trade with a wrong mindset. Even with years of trading experience, they rarely gain trading experience. They do not know how to observe, think, and summarize, making trading decisions based on feelings, which is not true speculation but a form of disguised gambling. The core of trading is probabilistic thinking, simply put, actively participating in high-probability events while guarding against low-probability events.

Every trader believes their position will likely align with market trends when opening a trade. Traders lacking probabilistic thinking often exhibit two behaviors: heavy positions and no stop-loss, as they fail to guard against low-probability events. Thus, regardless of past profits, a single black swan event can force a trader out of the market. Knowing to maintain probabilistic thinking in trading, the next question is how to find high-probability events and guard against low-probability events.

In seeking high-probability events, some traders use technical analysis, some use fundamental analysis, and some use a combination of both. For a long time, fundamentalists and technicians have been at odds, attacking each other. In fact, no method is inherently good or bad; their judgments are not 100% accurate but merely probabilistic. In guarding against low-probability events, most traders agree on capital management.

However, more important than capital management is self-management, as most subjective traders lack consistency. Participating in high-probability events involves two processes: first, identifying high-probability events, and second, timing participation. Essentially, the former tests the trader's ability to select targets, while the latter tests the trader's timing ability. If we judge based on fundamental analysis that the market will rise later, why not enter now? Because fundamental analysis helps in target selection, while entry timing requires clear signals from technical analysis. Many traders confuse the roles of fundamental and technical analysis, leading to operational confusion.

In fact, fundamental analysis mainly helps in target selection and direction judgment, while technical analysis helps in entry and exit timing. Many technicians do not recognize fundamental analysts, some believing fundamental analysis is hindsight, and others thinking retail investors cannot understand fundamentals. In fact, fundamental analysis uses deductive reasoning to judge market trends, while technical analysis uses inductive reasoning. The former is based on strict logical reasoning, while the latter is based on assumptions like history repeating itself. However, trading is not a science, so fundamental analysis is not always effective, and history does not simply repeat, so technical analysis is not always effective either. Both methods' judgments are probabilistic. Smart traders always maintain probabilistic thinking, finding high-probability events through fundamental analysis and participating in them with clear signals from technical analysis. Meanwhile, to guard against low-probability events, they manage their capital well. Respecting probabilistic thinking, when they find what they believe to be high-probability events, they do not rush in but patiently wait for strong entry signals from technical analysis.

Trading is not a one-time deal; it requires long-term accumulation. Therefore, you should not deny your trading system due to a period of adversity. The market always fluctuates, and any trading system will face unfavorable periods. Just get through it.