Recently, many friends have been feedbacking that their short positions at low levels are trapped, asking me what they should do?
In fact, when faced with such problems, I find it very difficult to provide an answer because I cannot predict the market.
Often, when you are unwilling to cut losses on a wrong trade, it is because your subjective thoughts are too strong. You are reluctant to believe your own eyes, always fantasizing that the price will drop back to break even and release you from your losses.
Actually, if you think from another perspective, opposing a position that goes against the trend will not only lead to losses but also cause you to miss out on future opportunities.
The reasoning is simple: because you have floating loss orders, the more the price rises, the more you lose, and the less likely you are to cut losses. At this point, all your analysis is subjective; the market is not complex, but your thoughts are.
When you are in a floating loss, you are unlikely to take a long position to hedge, because this operation contradicts your subjective awareness. If that's the case, why not just cut off the floating loss order and open a long position?
Assuming you strictly stop loss on a long position at a low level and remain flat, you can calmly analyze and find the trend, then make a long position in the direction of the trend.
Therefore, holding onto losing positions not only expands your losses, but also prevents you from participating in better opportunities later. What you lose is not just your principal, but also the bullish trend you see slipping away.
Trading reflects the weaknesses of human character; too proud, too persistent, too concerned, and having a heavy sense of gain and loss, all hinder good trading. Only those who dare to admit their mistakes can trade well.
We do not predict the market; we simply choose to follow the market, which makes trading much simpler.
Some people ask, can this order definitely make money? No one can guarantee that.
Trading is a choice of probabilities; if the structure is bullish, the rise is highly probable. If the structure turns bearish, the drop is highly probable. Does a bullish structure necessarily mean a rise? Not necessarily, does a bearish structure necessarily mean a drop? Also not necessarily.
Since we are trading probabilities, there is no such thing as 100%. Since there is no 100%, we need to manage risk. Set stop losses and move stop losses.
Preserving capital is always better than losing it; let go of the sense of gain and loss.
There are no missed opportunities because there are opportunities 24 hours a day. What you consider a bad market might still be profitable for others, and what you think is a super market, others might choose not to engage. Understand this principle.
