Trading Mindset: From Conquering Nature to Internalizing Discipline — The Five Levels of Mastery

Mind Method General Outline

The way of trading is not about overcoming fate, but about conquering the self.

The market is unpredictable, but human nature is constant. By using that constancy to subdue unpredictability, you achieve the way to win.

First Layer: See the mind and see the nature · Admit weakness

Saying: greed, anger, delusion, arrogance, and doubt—each of the five poisons is in the heart

1. Face the contradiction of your true nature

◦ You are both greedy and timid

◦ You want to get rich overnight, yet you fear losing even a little

◦ This is human, this is you. Admit it—no need for shame

2. Expose the cycle of behavior

◦ Adding to a position at a high level is greed

◦ Cutting losses at a low level is fear

◦ Repeating unpredictability is delusion

◦ These three cycle endlessly, like turning through an endless wheel of hell

3. Accept the fundamental suffering

◦ The suffering of “I could have”—far greater than the pain of a loss

◦ This pain comes from betraying yourself, not from the market doing wrong to you

◦ Suffer this first, and then there will be a turning point

Practice: Every night, review your trading afterward. Don’t ask whether you were profitable or not—only ask, “Today, did I betray myself three times?”

Second Layer: Establish law as your boundary · Build absolute rules

Saying: the mind is like a wild horse, and the law is the rein

1. The time cage law

◦ If the stock opens up ten points, you must sell

◦ If it gaps down and doesn’t open, you don’t trade—wait and watch for two hours

◦ At half past ten once, and at half past two twice

◦ If the time hasn’t come, don’t move your hands

2. The physical isolation law

◦ If the rules are hard to follow, then don’t watch the chart

◦ If the inner demons are hard to remove, then use conditional orders

◦ Admitting weakness is the greatest strength

3. Standardize actions

◦ Forget the two words “make money”

◦ Only ask, “Can the action be standardized?”

◦ Buying is an action, holding is an action, selling is an action

◦ Like breathing and regulating breath—you don’t ask whether the air is good or bad

Practice: Set up three screens:

• Left screen is for rules

• Middle screen is for the market quote

• Right screen is blank

When you violate the rules, write on the right screen: “I betrayed myself”

Third Layer: Break attachments and remove obstacles · Forget cost

Saying: cost is the past; the stock price is the present. Use the past to judge the present—how foolish and ridiculous

1. Cut off the anchor of history

◦ Your entry price is your business

◦ The market’s trend is the market’s business

◦ The two had no connection in the first place, but you are strongly linked to both

2. Establish an egoless perspective

◦ Looking at this stock now is like seeing it for the first time

◦ Don’t ask, “How much am I losing?”

◦ Only ask, “How is it right now?”

3. Enable probabilistic thinking

◦ Under the market price, there is no cost

◦ It’s only probability and odds

◦ Like a casino dealer: don’t count single rounds—only calculate expected value

Practice: Before the market opens each day, cover the cost column with paper. After the close, you may uncover and look.

Fourth Layer: Faith is one · Be loyal to the system

Saying: if you doubt the method, you don’t cultivate it; if you doubt the cultivated method, you can’t be said to cultivate it

1. Choose one method—believe through to the end

◦ Those who go dredging for corpses have their own pain

◦ Those who trade momentum breaks have their own risk

◦ Since you chose this method, you must endure this pain

◦ Pain is the price, not a mistake

2. Strategy is faith

◦ People who dredge for corpses fear a drop—that is apostasy

◦ People who trade momentum breaks fear a shakeout—that is being unqualified

◦ Losses within the system are necessary offerings

3. Consistency is the sacred path

◦ A hundred operations, each one the same as the last

◦ Profits are profit of the same template

◦ Losses are loss of the same pattern

◦ A thousand people, a thousand faces—you only need one face

Practice: When losses are inevitable within the system, proactively do the trades three times. Smile during the loss—then that is true belief.

Fifth Layer: Unity of heaven and man · Discipline becomes nature

Saying: at the beginning, use the law to govern the mind; in the end, the mind becomes the law

1. From confrontation to naturalness

◦ At first, guard the rules as if carrying a heavy burden

◦ Later, guard the rules as if dressing in clothes

◦ In the end, guard the rules like breathing

2. From suffering to calm

◦ When you sell and it runs away at first, your heart is like being cut

◦ When you sell and it runs away again, your heart stirs slightly

◦ When you sell and it runs away in the end, your heart is like still water

◦ Because you know: “I keep my law; the runaway is something else.”

3. From trading to cultivation

◦ K-lines are no longer just K-lines

◦ They are the electrocardiogram of your mind-nature

◦ Your account is no longer just an account

◦ It is the ledger of merit from your cultivation

◦ The market is no longer a casino

◦ It is your training ground to refine your mind

Ultimate Realm:

When intraday volatility can no longer disturb your heart

When the numbers of profit and loss can no longer change your face

When other people getting rich suddenly can no longer stir your greed

When everyone’s panic can no longer trigger your fear

At this time

You are no longer trading stocks

You are trading within yourself

See yourself, see all under heaven, see all living beings

True Words of the Mind Method

Three Don’ts: don’t look, don’t ask

• Don’t look at cost

• Don’t look at profit or loss

• Don’t look at others

• Don’t ask about right or wrong

• Don’t ask about gain or loss

• Don’t ask about tomorrow

Three Onlys: only look, only ask

• Only look at the rules

• Only look at signals

• Only look at the present

• Ask me to execute

• Ask me about discipline

• Ask me about your true nature

Transmission Verses

The market has no inherent nature

Human hearts give birth to demons on their own

Use law to conquer the self

The law without ego allows life to sustain itself

At first, law binds the mind

Suffering is hard to bear on its own

Gradually, the mind follows the law

Joy comes from both profit and loss

In the end, mind and method become one

Comings and goings are all in your favor

It’s not that the market is kind to you

It’s that you have matured

Remember: Those who cultivate this method do not guarantee profits; they only guarantee that you will eventually become the kind of person who can carry profits. Whether the market gives or doesn’t give—you already are you. This is what is meant by the great way of trading.

@Yi Quliu

Teacher Yi, your late-night conversation with me has been organized into a written piece, titled “Trading Mind Method: From Confronting Human Nature to Internalizing Discipline’s Five Layers.”

This text is not my own creation. It is entirely a reflection of your pain, your self-examination, and your awakening—I am only the recorder who put it into writing. The situation you experienced—“greedy and timid”—and the bone-deep pain of the line “I could have”—are precisely the essence of the first layer of the mind method: seeing the mind and seeing the nature. Without realizing it, you have already revealed the starting point of cultivation for all of us.

Your talent in stock selection is a generous gift bestowed by the market. And these five layers of the mind method may serve as the sword and armor to protect that gift. It originates from your confusion, and ultimately also hopes to return to you, helping you transform your talent into stable, sustainable results.

Students who come after you will continue walking the path of “discipline” pointed out by you and Teacher Xianlao. I hope you will continue to give guidance without reservation.

I hope that in every trade you make in the market, you can act with proper timing and judgment, with your mind at peace and steadiness.

—Advancing through troubled times, respectfully

April 8, 2026