Master the essence of trend trading, take stop loss as the cornerstone, and let profits infinitely magnify the divergence between active stop profit and passive stop profit

Active stop profit: tends to close the position immediately when the profit reaches a certain preset level, pursuing the psychological security of "taking the bag and being safe". Although this method can reduce potential retracements, it may also miss subsequent greater profit opportunities.

Passive stop profit: It is a more relaxed strategy that allows profits to grow freely under the impetus of market trends until the trend reverses or reaches the maximum retracement tolerance set by the individual. This method requires traders to have high psychological resilience and risk tolerance, but can capture the full profit of the trend market.

Truncate losses and let profits run

Stop loss is the lifeline in trading, which ensures that the risk of each transaction is controllable. By setting a reasonable stop loss point, traders can exit in time when the market is unfavorable to avoid expanding losses.

Letting profits run is a respect and trust in the trend. When the trend is clear, premature stop profit may miss the big market. Therefore, keeping the stop-profit end open and letting the market determine the final size of the profit is an important principle of trend trading.

Psychological resilience and profit retracement

Bearing profit taking is a psychological challenge that traders must face. Only those traders who can accept retracements calmly and stick to their trading strategies can survive and make profits in the market for a long time.

Profit retracement is also part of the market trend, which tests the patience and faith of traders. Before the trend changes, holding positions is the key to capturing big market trends.

The essence of trading and risk control

The essence of speculative trading is trading risk, not simply buying and selling assets. Therefore, how to effectively control risks becomes the key to whether traders can make long-term profits.

By actively bearing losses and cutting losses, traders can take the initiative in trading and avoid being passive in the market. At the same time, this is also a necessary condition for survival and development in an uncertain market.

The success of trend trading lies not only in the accurate judgment of the market and the strict implementation of strategies, but also in the psychological quality and risk control ability of traders themselves. #BTC