Many people engage in trading simply because they believe it's a way to make money and rush to deposit funds to give it a try. However, they never consider whether they are suited for trading or which trading model might be more appropriate for them.

Sometimes, it's not a matter of lack of ability or bad luck; it could be that you've chosen the wrong market or model, which prevents you from entering a profitable state. By the time you start thinking about this, it might be too late.

Today, I'd like to discuss how to conduct self-analysis and how to choose a trading model that suits you.

1. Choose a market that suits you.

Different markets have different trading rules. Selecting one that suits you can make trading much more efficient.

For example, the rules of the domestic stock market are T+1, allowing only long positions and not short positions, with trading hours limited to the morning and afternoon each day.

Futures, on the other hand, operate on a T+0 basis, allowing for both long and short positions, with leverage, and have trading sessions in the morning, afternoon, and evening.

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Foreign exchange operates on a T+0 basis as well, with both long and short positions, leverage, and a continuous trading session 5 days a week, 24 hours a day.

How do you choose among these three markets? Consider three main points.

First, market rules. Futures and forex markets are definitely more flexible than the stock market, allowing for closing positions on the same day and trading in both directions, which is more suitable for technical analysis. However, the pace of futures and forex markets is also certainly faster than that of stocks. If you're someone who gets heart palpitations from minor fluctuations in mutual funds, futures and forex might not be suitable for you.Second, trading hours. The trading time frames for these three markets differ, allowing you to schedule according to your own daily routine. For instance, if you are busy with work during the day and have no time to monitor the market, you can opt for the evening session of futures trading and the night session of forex. It is also important to select the corresponding active instruments.

Third, leverage. Among these three markets, forex offers the highest leverage, which also makes it the most challenging to navigate. Leverage implies risk; those who are disciplined and have strict risk control measures in place might consider high-leverage futures and forex trading. Of course, high risk can also lead to high returns. However, if you are a beginner, it is crucial to deeply ingrain the expectation of risk.

2. Choose a trading model that suits you.

Market trends can be broadly categorized into two types: oscillation and trend. Consequently, the main trading models in the market are also divided into oscillation-based trading and trend-based trading.

Among all market trends, oscillation is more common, so when comparing these two types of market trends, an oscillation-based trading system has a higher frequency of trades, a higher success rate, but a lower profit-to-loss ratio. Oscillation systems primarily rely on accumulating small profits to achieve gains.

In contrast, a trend-based trading system operates differently, with a lower frequency of trades, a lower success rate, but a high profit-to-loss ratio, relying on a single large breakout for significant profits to offset minor losses.

If you have a quick temper, you are likely not suited for trend trading, as you may lack the patience to wait, potentially falling just before the dawn. For you, an oscillation-based trading strategy would be more appropriate.

If you have a slow and steady temperament, with a slower reaction to the market and the ability to withstand repeated minor losses, and if you are the type of person who can run a marathon, then trend-based trading would be suitable for you.

Let me elaborate a bit.

The vast majority of people lack patience, making trend-based trading more difficult to execute and more counterintuitive. It is advised to choose this approach with caution. Additionally, in the domestic stock market, be cautious when selecting a trend-based trading model, as the overall market tends to oscillate more, with very few stocks showing significant trends. One can easily observe this by looking at the daily chart of the Shanghai Stock Exchange Index; it is better to trade based on oscillations in the domestic stock market.3. Choose a time frame that suits yourself.

The selection of the time frame is the most crucial aspect.

Because when you choose different time frames, it means you are opting for intraday, short-term, medium-term, or long-term trading styles. They represent different trading frequencies and require allocating varying amounts of energy to trading. If not managed well, your life, work, and trading can all become chaotic.

For instance, if you trade on a 1-minute or 5-minute time frame, whether it's range-bound or trending, the trades usually conclude within the day, which is considered intraday trading. However, with such short time frames, market changes are extremely rapid, and the trading frequency is high. You need to devote a lot of energy to monitoring the market. Do you sometimes feel exhausted from trading? It might be because the time frame you've chosen is not suitable.

If you trade on a 15-minute time frame, trades may conclude within the day if the market moves quickly, or they might extend to the next day if it moves slowly, thus reducing the trading frequency. If you trade on an hourly or 4-hour time frame, your positions could last for several days, further lowering the trading frequency.

Most people trade part-time while also managing their jobs and families. It's advisable to engage in longer time frame trades to reduce stress and not affect profitability. This approach allows for persistence in the long-term battle of trading.

Regarding the choice of time frames, I suggest avoiding very short time frames and opting for levels above 1 hour, which are more suitable for part-time trading.

Additionally, every trading software has a simulation feature. I recommend that everyone practice and get a feel for the trading rhythm on a demo account before entering live trading. Once you've honed your trading style, then transition to real trading. Patience is key, so avoid rushing into live trading prematurely.