Core Principles of Trading:
Stop Loss: The core of stop loss is to limit losses caused by directional errors, ensuring that losses are always within a bearable range. The purpose of a stop loss is to timely halt losses, rather than trying to reverse a losing trend. It is important to realize that stop loss is not meant to avoid small losses, but to prevent larger scale losses.
Take Profit: Take profit should be viewed as a means to protect already gained floating profits, rather than blindly pursuing the market's "peak" or "trough." Market fluctuations are complex and variable, making it impossible to accurately predict every price movement. Therefore, one should learn to lock in profits within a reasonable range, rather than purely seeking the perfect exit point.
Increasing Position/Rolling Position: Going with the trend is key in trading, while operating against the trend requires caution. In the case of existing profits, it is appropriate to increase positions and move the stop loss of the original position up, ensuring that already gained profits are not given back. New positions also need to set stop losses, with specific points determined by personal judgment. In summary, one should follow the trend and be careful when operating against it.
