Someone previously asked about my asset allocation. Apart from some fixed assets, all of my liquid funds are now invested in financial management and speculative trading.

20% of my funds are placed in the bank for large fixed deposits, 30% of the money is invested in the stock market, and 50% of the funds are used for futures and foreign exchange trading.

Let me give a word of caution here: as a professional trader, my own risk preference is relatively high. The average trader should not invest more than 30% of their assets in speculative trading.

After 2015, my expectations for stock market returns are not very high; outperforming the market is sufficient. My main focus remains on futures and foreign exchange, with an average annual return of 40% to 60% from my trading system (depending on the market conditions of the year).

I have maintained this asset growth rate for five or six years. Some people ask what it feels like to make a stable profit. Today, I will combine my past experiences and talk about the four psychological stages I have gone through, which I believe will be inspiring to everyone.

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1. The Confidence Addiction Phase

Many old friends know that I used to do business in Africa. Domestic ordering, container transportation, shipping schedules, deposits and final payments, a container of goods takes more than two months of hard work, and the profit is just a few thousand US dollars.

Later, at a business dinner, I met an older brother who traded gold. He could easily make thousands of US dollars a day just by clicking the mouse at home, so I also started trading.

99% of people start trading and make a profit. With futures and foreign exchange being high leverage trades, small funds can multiply several times, making money seem too easy to come by, and thus the heart begins to become restless.

When you make a profit, you will definitely feel an overwhelming sense of confidence, thinking you are a trading genius, and also start to feel that money is not money anymore.Things you were reluctant to buy before, buy them now; money you were hesitant to spend before, spend it lavishly, because you know that money comes in quickly through trading, and even if you spend it, you can earn it back swiftly.

So you increase your capital, almost wishing to sit in front of the computer every day, feeling that any trade that comes along must be taken, with gains and losses, fresh and thrilling.

At that time, I particularly disliked weekends because the market was closed and I couldn't trade, which was a significant hindrance to my earnings.

Looking back later, I reflected on why I was so confident and fanatical.

There were probably two reasons:

First: The market cooperated; at that time, during a period of consolidation, if I didn't stop losses, the market would drift back and I could make money, and the money came in especially easily and quickly, far exceeding my labor income, so I became addicted (this is also why many gamblers can no longer work normally).

Second: I had never lost, so I was bold and extremely confident. At that time, I hadn't encountered a major one-sided market, nor had I ever had a margin call, and I hadn't learned what fear was.

I feel that throughout my trading experience, those days were also the happiest times for me because I hadn't lost all my money yet, and every trade was an indulgence of my desires, with heavy positions and decisions made on feelings, with losses and profits, not at all afraid, and every day was filled with the mad secretion of adrenaline, it was really exhilarating.

2. The Period of Loss-Induced Mania

When did I realize that I had already suffered severe losses?One morning, I woke up with tinnitus because I was addicted to trading, only sleeping for three or four hours each day. But I still checked the market first and found an opportunity. I didn't even have time for breakfast; I planned to deposit money and start trading right away, only to discover that I had no funds left in one of my bank cards.

In fact, I had become numb to trading, losing and gaining, losing again, and I no longer saw money as actual currency, just a number, and I was too afraid to calculate the total.

I found myself depositing a bit of money, losing it all, then depositing again, thinking I couldn't believe the bad luck, that the loss was nothing, and I'd make it back in one trade. So I kept increasing my position, adding more and more.

But the market never turned around. Then suddenly, the market accelerated, and "pop," I got a margin call, my head buzzing.

At that time, I felt like I had lost money and was not willing to accept it. The hard-earned money was gone just like that, and I wanted to try one more time, just one last time.

So I started borrowing money from relatives and friends, using every conceivable excuse. At that time, they didn't know about my situation and thought I was in trouble. After borrowing money, I immediately started trading again, with each position being very heavy, and eventually, I lost it all.

Then I began to use credit cards, and I managed to get hundreds of thousands of dollars out, started trading again, and lost it all.

One day, I sat in front of the computer, staring blankly at the market, having lost all my money and owing over a million dollars in debt, while my girlfriend was breaking up with me. I suddenly felt scared and agitated, slapped myself a few times, smashed the keyboard, and then sobbed on the desk.

Looking back on my past experiences now, it feels like a dream.

Analyzing my mindset at the time.After suffering significant losses, I became filled with fear towards trading. Every time I made a small profit, I would close my position, fearing that I would lose it all again. When I made mistakes, I was reluctant to cut my losses, resulting in small gains but large losses.

At that time, I was also extremely obsessed with trading because I felt the losses were severe (the two worst months resulted in a loss of 1.6 million RMB). I wanted to recover my losses, and trading seemed to be the fastest way to do so.

It was like a gambler who has lost a lot of money at the gambling table. The thought of having to work hard for many years to make up for the debt is daunting, so the only option seems to be to recover the losses at the gambling table. However, the outcome becomes increasingly worse and uncontrollable.

Each time I had three to five thousand US dollars in my account, I would trade heavily and blow up my position, then deposit a few thousand more dollars. Sometimes I would blow up several times a day, losing tens of thousands. On some occasions, when the market cooperated, I could make a huge profit in a single day, but overall, I was consistently losing.

As a result, my emotional fluctuations during trading became extremely volatile. Sometimes I was so excited that I could stay awake all night, and at other times, I was very agitated. The more I lost, the heavier my positions became. The heavier the positions, the worse my mindset, and the more I lost, starting a vicious cycle.

Here's a reminder:

If you do not have a trading system and trade based on feelings, and if you suffer consecutive losses for three days, you should at least stop trading for a week to stabilize your emotions.

Otherwise, if your gambling instincts are triggered, you will enter a period of continuous losses and agitation like I did, which can lead to very serious losses and possibly an irreparable gap. After a year of agitation, I lost all my savings and had to stop trading, so do not let it come to that.

3. Period of Isolation

At that time, I had lost all my money and was in debt for over a million. My girlfriend could no longer see any hope in me and broke up with me.My bank account is also out of money, and I can't borrow any more, so I was forced to stop trading.

Previously, some people were curious about how I started over and where the funds came from. Actually, it's quite simple. At that time, in order to repay the debts, I sold the house that I was preparing to use for marriage. That house could be said to have embodied all my hopes for life, and every decoration and furnishing inside was arranged by me bit by bit, all for the purpose of providing a home for my girlfriend and me.

However, I owed over a million, and there was no legitimate source of income. So I sold the house, sold my Audi A7 at the time, paid off all the debts, and with the remaining money, I bought a second-hand Volkswagen Sagitar and rented a room, starting my two-year period of self-imposed isolation.

At that time, I often sat in front of the computer in a daze, feeling that there was no hope in my life, not knowing what to do. To give up trading felt very painful, but not giving up trading, I was afraid of continuing into that crazy state.

So I didn't trade at first, but started reading books. I read a lot of books, almost all the books related to trading that I could find.

I also stopped going out with friends, because some people, when they see you down and out, either stop associating with you or subtly or openly mock you. At that time, my pride got the better of me, and I chose to stop socializing.

It was also during that period that I had a lot of time to think. I would run 7 kilometers by the river every day, contemplating the principles from the books, reflecting on past behaviors, as if watching a movie, observing my past crazy self, and feeling very ridiculous, like I had experienced a nightmare.

This is also why I now insist on popularizing knowledge about trading, and insist on telling everyone the truth about trading, because many people are still in the dream, and many have not yet entered the dream. I hope everyone will have the day when they wake up.

Later, I realized that I had three absolutely wrong ideas:

First: It's not acceptable to lose money today; I must make up for the losses before I can stop.Second: It's just a few thousand dollars, so high leverage must be used to make huge profits; otherwise, what's the point of trading? One must go all in with a heavy position.

Third: Every day, as soon as I turn on the computer, I have to trade. If there's no opportunity, I have to find one; I must place an order, or I'll feel uneasy.

Gradually, I came to realize how foolish all of my behaviors were. It cost me millions to understand this simple truth.

After much reflection, combined with the books I read, I began to have a new understanding of trading. I learned what a trading system is and the significance of technical analysis.

So I started to build my own trading system and began to think about problems from a probabilistic perspective. After a year or two of review and adjustment, I was still in a losing state, but I always stopped at small losses.

Later, I met my business partner, and we attended some trading training together, gaining a deeper understanding of the trading system. We revised and implemented it again, moving from backtesting to paper trading, and from paper trading to live trading, starting with small amounts of capital and being very cautious.

After a long period of verifying the feasibility of the trading system, I started to use the money left from selling my house for trading.

After years of executing this strategy, I slowly achieved my current level of assets through compound interest.

4. What does stable profit feel like?

When I first started implementing the trading system, it wasn't exactly calm and easy. Especially at the beginning, I was very apprehensive because I had lost before and was afraid.However, at that time, the amount of capital was relatively small, my mindset was much more stable than before, and the risk control was very strict, so the fluctuations in my mindset were not that significant.

Later, when I put all my assets back into it, I actually went through a very painful period, which was how to strictly execute my trading system without exception.

Because once it involves your own money, and a large amount of it, your mindset is definitely hard to stabilize.

I also encountered a period of decline, where I didn't make money for two or three months and was losing. But I knew that if I didn't strictly enforce it, I would return to my previous state, losing money in a daze.

So I kept mentally reminding myself: I must persist, only by persisting to the end can I make a profit, if you get through this, you will be enlightened, and you must get through this ordeal.

Later, I really gritted my teeth and persisted, and after a year and a half, I felt like I had run a marathon. Halfway through, you feel so tired, really unable to continue, sweating all over, and you can choose to stop and relax. But if you break through this critical point, the steps you take afterwards won't feel so tired, and you will only be left with pleasure and a sense of achievement.

So now, the feeling of trading is that I no longer indulge my desire to trade as a very enjoyable thing; instead, I have turned the persistence of my trading system, getting through the period of decline, and finally making a profit into a very fulfilling, enjoyable, and proud thing.

My pleasure has changed. Although the process of trading is a continuous mechanical repetition, every day is a routine of reading the market, making plans, and executing plans. The process is very monotonous and tedious, but the result is good. The pain of persistence makes you feel your existence, just like the soreness all over your body after exercise, but you are addicted to the feeling of exercise.

In the early stage of achieving stable profits, there was an exciting phase where the account was continuously profitable, and the amount was increasing. I felt a bit unreal, and I would keep checking the account to confirm, and I would be so excited that I couldn't sleep. Later, I gradually got used to it, and my heart became calm.

I earned my first pot of gold in Africa, lost it all in trading, and then earned it back through trading, returning to the starting point. The success of trading did not bring me much sense of achievement, nor did I feel that I was different from others, leaving behind only an unforgettable past.That concludes my entire trading experience. Now, let's discuss several questions that many friends are concerned about.

5. Questions of Concern

Question 1: Does stable profit equal financial freedom?

Absolutely not.

In the pursuit of stability, the most important aspect is "steadiness." Stability implies that your position is certainly not heavy. If at this time your capital is not substantial, then accumulating wealth will take a certain amount of time.

If you are overly eager for quick success, it will backfire. Therefore, I suggest that everyone should use their spare money to trade part-time, which allows you to treat trading as a side business and an additional source of income to improve the quality of life.

Question 2: Should we pursue stable compounding profits or stable windfall profits?

Firstly, we are not deities and cannot achieve stable windfall profits. Stability and windfall profits are two things that cannot be obtained simultaneously.

The period when I suffered the most significant trading losses was when I was pursuing windfall profits. To achieve windfall profits, one must take heavy positions, which in turn challenges one's mentality.

For example, the limit of human weightlifting is 475 kilograms. Beyond this weight, it is impossible for a person to lift, and there is a risk of being crushed to death. In fact, human mentality also has its limits. If the position is too heavy and the fear it generates is too intense, a person will be unable to control it, and uncontrollable fear leads to losses.It is precisely because the extreme value of mindset lacks a clear standard that many people do not have this boundary, leading to losses. I provide a standard for everyone to measure: after entering the market with an order, set the stop loss and take profit, and if you can consistently avoid checking the market and not worry about gains and losses, then this is a reasonable position size.

As for compounding, the position is not heavy to begin with, so the mindset remains stable. After having a surplus, increase the principal, although the position size increases, but the proportion to the total position remains the same, which allows for maintaining a good mindset and absolute execution, making the trading increasingly stable.

Question 3: After achieving stable profits, are there no emotional changes at all?

Of course not.

Emotions in trading are always present. Even after trading for 10 years, I still feel happy when I make a profit and upset when I suffer a loss, but I can control these feelings of happiness and upset without letting them affect my trading.

To digress for a moment, traders are human beings. The reason we are called human is not because everyone has a head and two legs. It is because as humans, we possess human nature, which includes desires, emotions of joy, anger, sorrow, and happiness, and these will never be extinguished.

A reminder to everyone: In trading, reduce your position size and desires, and do not challenge human nature. This way, you can better control your trading emotions, and profits will be more stable.

Question 4: After achieving stable profits, is it a one-time effort and no adjustments are needed?

No, it is not.

Firstly: When increasing position size, one must adjust their mindset.As the amount of capital increases, the positions in trades become heavier, and the fluctuations in profits and losses during each trade become larger, which can cause new psychological impacts and challenges for traders.

In practice, I have encountered a trader who made money no matter what with a $10,000 account, but when the capital was increased to $50,000, they became hesitant and unable to make profits. This is a matter of mindset.

I suggest that everyone should gradually increase their positions instead of jumping to larger ones. For example, changes from 1 lot, to 2 lots, to 3 lots, to 5 lots, rather than jumping directly from 1 lot to 5 lots.

Secondly, as capital increases, the trading products should be adjusted.

With a large amount of capital, placing orders in one go can be too large, affecting market liquidity and prices. Many foreign exchange platforms have restrictions on the number of orders placed at once, such as not exceeding 50 lots at a time, and the larger and more formal the platform, the higher the requirements.

Adjustments need to be made here, allocating capital to trade in different varieties. For example, if you were trading in one variety, with an increase in capital, you would need to adjust and allocate it to several varieties. This issue is particularly evident in the futures market.

Additionally, with a large capital, from a risk-avoidance perspective, it is also necessary to diversify capital into different varieties, so that even if a black swan event occurs in one variety, not all capital will be lost.

The above is the process of achieving profitability and the state after achieving profitability. Ten years of experience condensed into these few thousand words are my true thoughts and reflections. Later, I also started my own public account (Eight-Digit Garden) to share my trading experience, hoping it can be helpful to everyone, at least to avoid going through what I have experienced.

In conclusion, I hope everyone can achieve stable profits.