There is a very important principle in trading: do not be greedy for small profits, and stop losses in time.
Although this sentence is only eight words, it is very difficult to really do it.
Imagine that you opened a trading order with 20,000 yuan. As the price steadily rose to 21,000 yuan, a little satisfaction came to your heart. You chose to stop profit and gained 5% of the profit. However, the market was like a wild horse that ran away, and continued to run wildly to 25,000 yuan. At that moment, you might feel a little regretful, because the 5% profit was so insignificant compared to the potential 50% profit.
So, you made up your mind to stick to your position next time and not be shaken by small profits. When the market returned to 20,000 yuan again, you mustered up the courage to enter the market again, and the price climbed to 21,000 yuan again. This time, you learned from the previous lesson and chose to stick to it. However, the market is always full of variables, and the market suddenly fell back, even falling below your cost line to 19,500 yuan. Faced with such a situation, you have to make a decision to stop loss.
This dilemma, like a puzzle in the trading world, has trapped countless investors and made it difficult to extricate themselves. So, is it possible to be able to handle both large and small market conditions with ease, making profits and avoiding big losses?
In fact, such a perfect state is not easy to achieve. In the world of trading, we must make a choice, whether to pursue short-term petty profits or stick to the long-term overall situation. My personal choice is not to be greedy for small profits. This does not mean that I turn a blind eye to small profits, but I know that only by sticking to the overall situation can we maintain stable profits in long-term transactions.
Of course, this is not easy. Even I cannot guarantee that I can do this 100%. But I can share my trading philosophy, hoping to help you be more stable on the road of trading.
In the end, the proportion of realizing this concept still depends on personal cultivation and market changes. However, as long as we keep working hard and constantly improve our trading level, we will definitely be able to go further in the world of trading.
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