How to escape the top, how to stop loss, how to stop profit, what is your expectation?
1. The problem of "stop loss but not stop profit" has troubled me for a long time. My stop loss point has always been set at 30%-50%. Because there is no fixed trading system, I mostly trade intraday, and occasionally try intraweek trading. I used to think that there was no big problem with my stop loss setting, but in fact, this is the main reason why I have not been successful for many years. I missed the trading opportunities that I should have held, and once the loss reached 30%-50%, I would rush to cut the position. To be honest, this behavior is really stupid. I always fantasize that the market is just a temporary decline, and I also fantasize that I can get rid of the position and then close the position. However, once I get rid of the position, I start to fantasize about reaching the stop profit point, and this cycle continues. It was not until the end that I realized that a loss of 50% requires a profit of 100% to make it back. Why not cut the loss at the beginning? Thinking of this, I found that it is really simple to survive and make money: "Stop loss early and let the profit continue to run." In the past, I have always pursued fast turnover and high profits, but once I lost money, I never reflected on whether my decision-making was wrong. It was not until now that I realized that these things I have been pursuing are actually the reasons for my repeated failures.
2. "If the market does not develop in the direction you expect, then your ideas are meaningless." I have always believed that trading is about making expectations, but I have never realized that my expectations may be too idealistic, whether I am too confident in my judgment, so that even if I suffer losses, I will not reflect on the reasons.
3. "If I stand on the railroad track and see a train coming towards me at 60 miles per hour, I will definitely leave the railroad track quickly before it hits me, and come back after it passes, instead of insisting on staying there and waiting for the collision." This metaphor is very vivid, and almost anyone can understand its meaning. But why am I always obsessed with trading? These three points are all about risk control, which is very easy to understand, and is similar to Buffett's "protecting the principal" principle. However, for many years, I have never woken up and have been pursuing higher profits, but I don’t know that controlling retracements is the key to climbing the "high mountain".
When making any investment, whether you are in full position or split position, you must be responsible for your funds, and stop loss is your compulsory course!
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