One of the most common mistakes that individual investors worldwide often make is holding losing positions for too long while hastily closing profitable positions. This mentality often stems from focusing too much on account balance rather than paying attention to important indicators such as market trends or trading volume. To succeed in trading, it is necessary to completely change the mindset: let profits grow and cut losses quickly.

Basic Rule: Self-discipline is the key factor

To achieve high efficiency, it is necessary to establish and adhere to clear discipline regarding stop-loss and take-profit levels. For example, an effective strategy might be:

  • Cut losses as soon as the loss exceeds 5% of the initial investment.

  • Only take profits when the profit decreases to 15% after reaching its peak, in order to optimize profits when the market continues to rise.

Even if the success rate of trades is only 50%, applying this strategy over 100 trades can yield profits of up to 300%, thanks to allowing profits to grow larger than losses. However, the biggest challenge in trading is not the tools or strategies, but psychological management. Greed and fear often lead to impulsive decisions, causing significant losses.

The golden rule in trading is: always follow the trend. Once the trend has been established, there is no need for deep analysis or trying to predict the market. Just follow the market direction and avoid speculative actions or bottom fishing during strong declines.

  • Short-term trend analysis: Use daily moving averages and monitor trading volume breakouts.

  • For medium and long-term trends: Observe weekly moving averages to assess the sustainable direction of the market.

Remember that trading against the trend is a highly risky action, with a very low chance of success. Instead, focus on high-probability opportunities and do not hesitate to admit mistakes when the market does not behave as expected.

Risk Management: A decisive factor for long-term survival

In trading, risk management is much more important than seeking short-term profits. A good investor is one who knows how to cut losses in time and protect capital. For short-term trades, it is advisable:

  • Monitor 15-minute, 30-minute, and 1-hour charts to find suitable entry and exit points.

  • Use technical indicators such as KDJ to identify trading signals and OBV (On-Balance Volume) to analyze the intentions of large investors.

Trading Psychology Strategy

To avoid mistakes from emotions, always keep a cool head and stick to the plan set out. Some psychological tips to help trade more effectively:

  • Do not have too much expectation of 'recovering losses' while forgetting the goal of controlling risks.

  • Learn to accept small losses to avoid larger losses in the future.

  • Regularly reassess your strategy and improve based on actual results.

Conclusion

Success in trading does not come from luck but from discipline, patience, and the ability to control emotions. Remember that the market is always volatile, but if you stick to the trend, cut losses in time, and let profits grow, the opportunity for success is always within reach. The only way to survive and develop sustainably in the market is to continually learn, improve yourself, and maintain your trading principles.