In the global investment field, retail investors seem to be trapped in a similar dilemma. When facing losses, they often choose to hold on tightly, as if just persisting will bring hope for recovery; once there is a slight profit on the books, they can't wait to sell, completely disregarding market trends and changes in trading volume, their eyes fixed only on that meager profit. This operational model is actually a misconception; the correct approach should be to operate in reverse: hold firmly when in profit, allowing profits to accumulate; if losses exceed 5% of the principal, decisively cut losses to prevent further losses.

Taking my profit-taking and loss-cutting principles as an example, when profits reach 15%, if they fall back to 10%, timely take profits; if the market continues to improve, then follow the trend and continue to hold. If after buying, the stock price drops and losses exceed 5% of the principal, cut losses without hesitation. Assuming one can ensure a profit-taking of 10% each time and a loss-cutting of 5%, even if operating 100 times with only a 50% win rate, the return can reach as high as 300%. However, this seemingly simple strategy is fraught with difficulties in execution, stemming from the greed and fear of human nature, making it hard to achieve the unity of knowledge and action.

In investing, trends are key. Once a trend forms, there is no need for overly complex analysis; just follow the flow of funds, and do not subjectively guess, blindly predict, or make unfounded assumptions. If one is not good at judging trends, moving averages serve as a good reference indicator. Moving averages can clearly divide the market into bullish and bearish; bullish indicates the market is moving up, while bearish indicates it is moving down. When doing short-term investments, focus on the daily moving average; if there is a breakout with increased volume, consider following in; if it is a medium to long-term investment, focus on the weekly moving average, enter when there is a breakout on increased volume, and exit when it falls below.

Following the trend is the core essence of investing. When the market is poor, decisively stay in cash and observe. For example, when the trend of a certain coin is downward, do not easily attempt to catch the bottom; do not fantasize about being lucky enough to buy a coin that is rising against the trend, nor expect an immediate rebound after buying; such low-probability events should be avoided in investing. Trading coins should focus on high-probability events, be brave to face mistakes, and timely control losses; this is fundamentally necessary for long-term survival in the market, and its importance far exceeds short-term gains or losses. Regardless of the investment method used, mastering one and applying it to the extreme is sufficient.#BTC☀