In today's discussion, we'll focus on one of the key topics in the world of trading: self-adjustment in the face of adversity. When the transaction is not going well, the real challenge for the first hand is how to quickly adjust the mindset and holding strategy. A well-trained player knows how to exit the market in the face of adversity, wait and see the situation before making plans. This is an important principle regarding loss control.
Experienced traders assume that their positions may always move in an unfavorable direction, so they will keep an eye on stop-loss levels to limit potential losses. They want the market to move in line with expectations, but if it does, they are also ready to exit the market to avoid bigger losses. In trading, heroism has nowhere to go, and questioning one's own abilities and judgments is necessary, as conceit often leads to failure. The key to success is to avoid huge losses, not to buy and sell precisely.
From the beginning to the end of the transaction, it is necessary to strictly control the maximum loss amount of a single transaction, the current day and the month, and manage the capital curve to ensure that the single loss does not exceed 2% of the total funds. When there is no profit, the stop loss for the first entry should be set low. In the event of a loss, the reduced principal amount should be used as the starting capital for recalculation. The loss of the day shall not exceed 5% of the total funds, and the loss of the month shall not exceed 20%. Profits should never be turned into losses, and maintaining profits is just as important as capital preservation. Profitable orders should no longer become losses, and losses on a single trade should not exceed the profit of the previous trade, and losses on the current day should not exceed the profits of the previous trading day. Once these limits are exceeded, the position should be closed immediately and trading should be suspended.
After successive stop-losses, the weakness of human nature is often revealed, and this is when we need to adopt some strategies or ideas to avoid repeating mistakes. It is also crucial to control the frequency of trading, and three consecutive stop-losses should reflect on reducing or suspending trading. When you lose money for three days in a row, you should reduce** and stop trading to think calmly. When faced with losses, we should set expectations, control the volume and frequency of trades, otherwise it may lead to greater losses. When the fear of losing money rises, it is necessary to stop trading immediately and avoid emotional operations.
When the transaction is not smooth, it is the mentality and decision-making ability of the first hand that is tested. In the event of a sudden loss, you should immediately evaluate the losing position and accept the loss before proceeding to the next trade. Today we are sharing strategies on how to stay sane in the face of trading adversity and how to control losses and trading frequency.