The 'Addiction to Holding' in Contract Trading!

In the unpredictable world of contract trading, many trading behaviors may fall into a psychological trap known as 'Addiction to Holding'. In this state, traders insist on holding positions even when facing losses, unwilling to cut their losses in a timely manner, hoping for a market reversal that will miraculously bring them back to break even or even profit. However, the risks hidden behind this wishful thinking are far more serious than one might imagine.

The Temptation of Luck:

The appeal of holding on lies in its seemingly offering a possibility of 'getting something for nothing'. After one or several lucky escapes, traders may believe they have grasped the market's rules, leading to a kind of blind confidence. This psychological state drives traders to continuously challenge the market, neglecting the objective existence of risk.

The Psychological Mechanism of Addiction:

Similar to gambling, the behavior of holding on may bring excitement and satisfaction in the short term, especially when the market unexpectedly reverses, allowing traders to recover their losses or even profit. This brief victory reinforces the trader's illusion of luck, making them more inclined to continue holding on when facing losses, creating a vicious cycle.

Accumulation of Risk:

However, market fluctuations are complex and unpredictable. Long-term holding can exacerbate losses and even lead to the risk of liquidation. Traders often ignore the true market trends and risk signals during the process of holding on, instead immersing themselves in their own fantasies. This neglect of risk can ultimately lead to severe financial losses.

Awareness of Reality:

To maintain a clear mind in contract trading, traders should:

1. Set clear stop-loss points: Timely stop-loss is key to avoiding significant losses. Setting stop-loss points can help traders quickly adjust their strategies when the market trends do not align with expectations, avoiding emotional decision-making.

2. Remain Rational: It is crucial to stay calm and rational during trading. Traders should constantly remind themselves that market trends are uncontrollable, and wishful thinking cannot replace rigorous analysis.

3. Learn Risk Management: Understanding and applying risk management strategies, such as reasonable capital allocation and avoiding excessive leverage, can help traders maintain a steady investment attitude when facing market fluctuations.