To trade well, one must first have a correct trading philosophy. Common mistakes made by ordinary investors include the following: trying to catch the bottom and the top, increasing positions against the trend, averaging down on losses, over-leveraging (more than 70% of total funds), revenge trading, failing to cut losses when in the red, or constantly moving stop-loss levels. If you lose 2000 today and then stop-loss at 1000, you might think about making a heavy bet to recover, but after touching the stop-loss multiple times, the market may move back in the direction of your original position, and you might choose to stop cutting losses and hold on with heavy positions. Often, in such situations, the final result is liquidation. Some investors are more conservative and hesitate to open positions, missing opportunities even when they arise.
I believe every trader must have their own trading system; only a profitable trading system can ensure long-term gains in investments.
When opening a position, the criteria for entry must be met, with a basis for entry and exit; building a trading system is both difficult and easy. A positive return system can be created even with just one intraday moving average. However, establishing a positive return system requires backtesting and repeated optimization to truly achieve stable profits. A trading system based on an intraday moving average needs to be predicated on trending markets, where prices oscillate around the moving average. Only when prices depart from the oscillation range and form a trend is it suitable to apply the moving average system.
Only go long above the moving average, only go short below it, trade lightly when far from the moving average, and cut losses if it breaks the moving average. Take profits after significant gains, and when prices fluctuate around the moving average, it indicates a ranging market. After consecutive stop-losses, do not open new positions; the validity of a breakout should be assessed by trading volume, as a valid breakout from a range must be accompanied by an increase in volume.