Why do many people like to add positions with floating profits, so that a reversal will not result in floating losses faster?
What you think of adding positions with floating profits:
The principal is 100,000 yuan, and if you do it right, you will make a profit of 300,000-1 million yuan, and if you do it wrong, you will be liquidated.
The actual floating profit adding position:
The principal is 100,000 yuan, and the position is only 10,000 yuan or even lower,
Only look for opportunities with odds of 10 times or even 100 times,
Either make a profit of 100,000-1 million yuan, or only lose 10,000 yuan.
Assume a capital volume change trajectory:
1.1✖️2.8✖️0.95✖️10.6✖️0.2✖️1.09
In this trajectory, 10.6 and 0.2 have the greatest impact,
But whether there is 10.6 is not something you can control,
What you can control is that 0.2 must not appear.
This is the root of compound interest!
"Only look for opportunities with odds 10 times or even 100 times the odds" is the patience that is repeatedly emphasized in trading.
