In our previous session, we discussed how to become wealthy through trading: Want to get rich from trading? First, address these two prerequisites! The answer to this question will only be revealed much later, but the prerequisites can be put forward now. So, as we face these prerequisites in seeking the correct solution and the right mindset on the path of trading, I can tell everyone that although mastering these two prerequisites allows you to see the broad road, the correct path, it is merely the right direction.

On these two broad roads, it can still be said that they are full of thorns, with many difficulties and even dangers lurking. Why is that? It is because there are five challenges in trading, which I will explain one by one.

The first one: Choosing an unsuitable product with no market movement;

We said that the premise of making money is to select a product with volatility, but the corresponding challenge arises, which is that the product you choose is unsuitable, and it has no market movement. You buy and hold, but it doesn't move. Although you may not have lost any money, your capital is tied up, and your trading becomes a process of inaction. This is the first challenge.

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The second one: The analysis of the trend always goes against expectations;

Next, even if the product has volatility, your analysis of the trend always goes against your expectations. When I am bullish, why does it go down? When I finally think it has peaked, it continues to rise. What should I do?

I want to tell everyone that going against expectations, being wrong, and making mistakes are inherent challenges in trading. It's not about being stupid or foolish; it's the nature of trading. You have to get used to things not going as you wish, to trading not always following your desires, and to calmly and rationally accept this fact.

Congratulations, you are continuing on the right path.

The third one: Being unwilling to admit mistakes after losing money and getting stuck, allowing the situation to worsen;

Some friends have a strong attachment to their views and do not accept things not going as they wish. They will think, "Why? How can the market be different from what I think? I said it would rise, so why doesn't it rise?" It's like in our growth process, when we are young, stubborn, and attached to our views, always thinking we are right and others are wrong, believing we have our own opinions.Things not going as planned is not the most terrifying thing. The obsession with the self, the ostrich-like refusal to accept and admit mistakes when things go contrary to one's wishes, that is the most terrifying.

When you are trapped, when you suffer losses, you are unwilling to admit your mistakes. You are unwilling to say, "I'm sorry, I was wrong. Maybe my previous views were flawed. Now I admit my mistake, reflect, and learn so that I can improve what comes next."

But this is a challenge. In life, admitting one's mistakes is very difficult. In any situation, at any age, for any matter, to sincerely admit one's mistakes, let go of one's ego, and seek the truth of the matter is extremely difficult. Hence, this is the third challenge in trading.

The fourth: Adding to a losing position, getting deeper into trouble.

If the unwillingness to admit mistakes is not the most difficult challenge, then the life-threatening challenge in trading emerges: adding to a losing position, getting deeper into trouble. When I reach a certain level of understanding, I might feel that, well, I'm going to fight it out with the market. Why are you rising? I want you to fall.

Please pay attention, if you do not have enough funds to overwhelm your counterparty, if you do not have a continuous flow of liquidity, before having these things, adding to a losing position is like a mantis trying to stop a chariot, and it will end very badly. It's not just about economic loss; it also leads to the fifth challenge, a complete collapse of self-confidence, not knowing how to trade, or even how to be a person.

The fifth: The collapse of self-confidence.

Some students may have read many books about trading in the early stages, and we have learned about Soros, his theory of reflexivity, his teacher Karl Popper, and his "The Open Society and Its Enemies," understanding some of the logic within, which is how I can apply my active trading ability to intervene in the market, influence the market, and ultimately make things go as I wish.

Soros does it this way, so I will do it too. Please note, that's Soros, not you.Regarding Soros's method, he is not always successful. In 1997, he targeted the Thai baht and created turmoil in Southeast Asia. But do you know what happened in Hong Kong? Soros amassed a substantial amount of capital and employed a multi-dimensional trading strategy, utilizing synthetic indices, options, cash markets, futures, and so on, which at one point left the Hong Kong dollar defenseless.

However, at that time, he overlooked a crucial issue: China, as a great nation, is not a small Southeast Asian country that can be easily manipulated. The decision-making of our State Council was timely and appropriate; they mobilized funds and supported Hong Kong in a way that did not completely violate market principles. As a result, Soros was defeated and fled in disarray.

Soros's actions can be effective in immature markets and foreign exchange markets where central banks do not have as much capital as he does, especially when he exploits some loopholes in free market economies. He can add positions against the trend, using his theory of reflexivity to achieve his trading goals.

But for our other markets, especially our A-share market or futures market, adding positions against the trend is a very dangerous behavior.

If you do not use leverage, the worst result of adding positions against the trend in the stock market is that you lose all your money, but generally, stocks do not fall to zero, so it might not be too bad.

However, if you use leverage, such as margin trading in the stock market or margin trading in the futures market, adding positions against the trend is a very dangerous behavior. It will certainly lead you deeper and deeper until you are unable to extricate yourself.

Therefore, there are five challenges in trading that make the path to success full of challenges and setbacks. Before reaching the desirable outcome of wealth and prosperity, one must always remember the five difficulties of trading.

Always ask yourself if the product is right, if there is a trend, and if the trend analysis can be as close as possible to the future reality. Especially if you are wrong, it does not matter, but you must admit your mistake, do not let the situation deteriorate, and do not use leverage to add positions against the trend, amplifying your mistakes.

And always maintain confidence. Confidence comes from what? Confidence does not come from your excellent trading performance; even the best trading performance can be ephemeral. Confidence comes from your reflection, admitting mistakes, thinking, and critical thinking.Here are the five challenges in trading, which also serve as a seed of wisdom on the realm of trading for everyone.

Well, that concludes today's sharing. I wish you all smooth investments.