Seeing the divine fish discussing trading, I also want to throw in a brick:
Assuming you have a capital of 1 million, you must lose it all within a week, and if you exceed the time, you will be executed directly. How would you operate?
1. Go all in and bet heavily on the direction
It seems like a gamble that can yield the fastest results, but what if you win the bet?
The capital doubles to 2 million, making the task of losing it all even harder!
2. Crazy frequent trading
Open a position and immediately close it, relying on transaction fees to gradually deplete the capital.
This does work, but what if some trades happen to be profitable?
Profitable trades must be closed immediately, absolutely no waiting!
On the contrary, losing trades can be held onto longer, hoping to lose even more.
Think carefully, do these strategies resemble certain behaviors in daily trading?
Worried about giving back profits, eager to lock in profits;
Choosing to stubbornly hold on when facing losses, hoping for a market reversal.
The scariest thing in trading is not the loss itself
but those seemingly harmless habits that gradually erode your performance.