The real secret of short-term trading is that the shorter the time you trade, the less money you make. It's disappointing, but it's true. Think about the investments you've made. Have you ever made a big profit in one day? If you have such good luck, how many times can you repeat this good luck? Profits take time to accumulate. Failed traders want to complete transactions in the shortest time possible, so their profit potential is naturally greatly limited.
By the definition above, you limit your profit potential and lead to continued losses. No wonder so many people perform poorly at short-term trading.
The difference between losers and winners is that losers are unwilling to take losses and sell out. Another difference is that winners will hold on to profitable positions, while losers will exit too early. Almost no loser can hold on to profitable trades for a long time. They are often very happy when they make a little profit, so they take profits too early. They often enter the market on the same day and sell it in two or three days.
You have to learn to hold on to profitable positions to make big money, and the longer you hold on, the greater the potential for profit. It takes time to make a profit from investing.
Frequent traders believe they can predict short-term trends and the highs and lows and when the market will form a top or a bottom. Sorry, my friends, I have to tell you that this cannot happen often. This is just a dream of frequent traders, an unrealistic dream.
Based on the principle that it takes time to make a profit, choosing the medium-term moving average as a reference for operation may be the best way. To make short-term trading profitable, you need to understand the following points.
1. Short-term fluctuations are difficult to predict
2. We need to control the extent of losses
3. Only after making a profit, you can get a relatively large profit if you hold on to it
4. Time is our friend because we need time to create profits
In the words of futures trading guru Kroll: Loss-making trades are short-term, and profitable trades should become long-term.
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Most people’s trading now is just the opposite. Their profitable trades are short-term and their losing trades are long-term.
Profits come from risk control, and risks are controlled by you. When trading, the only thing we can control is to set a stop loss point. We use the stop loss point to control the transaction within a certain range, while the losers do not have a reasonable stop loss, which often results in a single large stop loss.
When you open a position, you should establish a reasonable position and stop loss point, and you may only lose so much. No matter when you enter the market, whether you buy after a new high or a new low, the risk is the same for transactions with stop loss points. So we have to use stop loss points to control losses within a certain range.
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Let me diagnose him. These are the two problems that cause retail investors to lose money.
1. Frequent trading and blind trading will cause frequent stop losses, and the accumulation of small stop losses will turn into big losses.
2. Blindly following the trend, chasing hot spots, trading with heavy positions, and not setting stop losses will eventually result in a single huge stop loss.
The second situation is the situation of most retail investors, who are still in the reckless stage.
In the first case, you already understand stop loss, but lack a broad perspective, resulting in frequent small stop losses. This is the exploratory stage.
For reckless investors, who know nothing about stocks and buy stocks randomly, they don't know when to buy, let alone when to sell, and they don't know what the company does. This type of investor should first learn, and then learn to use moving averages to look at stocks, follow the trend of the medium-term moving average, and use appropriate moving averages to stop profits and losses.
For investors who are in the exploratory stage, they should give up chasing rising and selling falling, wait for the emergence of the general trend that you can rely on, make light moves in the right places, and use reasonable stop losses to gamble your time and space.
The reason why I wrote such a post is that few people can truly profit from the bull market. We can only say that the market rose by 10,000 points and they once made money. However, because they did not have a general view and did not set reasonable take-profit and stop-loss measures, 90% of the people in the bull market would eventually return their money to the market with interest.
If you read my posts carefully, you will know what stage the overall market trend is in, what opportunities and risks it faces, what overall trend you should rely on when investing in individual stocks, and how you should stop losses and take profits.
If you want to make money, you must put aside your impetuousness and greed, don't try to take shortcuts, calm down, settle down, and trade with a down-to-earth perspective of the general trend.
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