I have talked with you about many experiences and insights of contracts before. There is another very important issue in contracts, which is holding orders. I believe everyone has had such an experience. Let’s talk about holding orders again today.
Before we talk about how to solve the problem of holding orders, we must first understand what holding orders is. Let's first give a clear and correct definition of holding orders.
Holding back means not stopping the loss when the stop loss is reached. First of all, you must set a stop loss line when trading. Those who do not set a stop loss have either already lost money or are on the way to losing money. Setting or not setting a stop loss is the difference between gambling and investing. It can be said that no one in this industry has never held back.
First of all, we need to know why people resist orders. This has a lot to do with our human nature of "losing aversion". Everyone hates losing and losses, and the pain caused by losing is much stronger than the happiness brought to you by getting something of equal value. If you lose 10 yuan, you have to earn 30 to make up for the pain of losing 10 yuan. When we stop loss, that is to say, we will lose real money, which is unacceptable to most of us, so at this time their inner activities are like this: I will change the stop loss position, what if it is pulled back? This is also the reason why most people go from small losses to huge losses and finally blow up their positions. Do you know? The real harm of resisting orders is not that you didn't resist this time, but that you survived this time. Because if you survived this time, you will have a concept in your heart: it turns out that resisting orders works. This is how survivor bias is generated. Next time you reach the stop loss position, you will still choose to resist the order, because you will think that it worked last time and it will work this time, and then resisting orders becomes a habit, and then gradually embarks on the road of destruction. So for retail investors, how can we avoid resisting orders? I think the most feasible way is to stay in a high-quality community and around teachers, because they will remind everyone from time to time about the harm of resisting orders. Whenever you want to resist orders, seeing their reminders will most likely pull you back. Over time, even the pigs next to the temple will chant sutras, and you will slowly eliminate resisting orders from your operating system. Staying away from resisting orders can help us live longer and live until dawn.
