The source of the following content: Wechat public number Hui classroom
I have seen many traders who have been trading for 8 years and are still losing money.
Why do you think you are still losing money after doing it for 8 years?
But there are also people who can make a profit after half a year!
We may not be able to use trading time to measure the level of trading. To some extent, the ability to iterate through mistakes can better determine a person's profit and loss. The best traders learn from their mistakes and avoid falling into the same pit repeatedly.
In fact, it is the ability to think and summarize the mistakes made. Today we will think about and summarize what situations will lead to trading mistakes.
1) Unwillingness to liquidate losing positions
One of the reasons why some investors can lose again and again in the investment market is that they refuse to admit defeat and follow the market to the end.
When this kind of mistake occurs, the common psychology is to expect the price to eventually return to the break-even point. But the market often does not work like this. It is your luck that it can return to the original point. If you cannot go back and fall to the bottom, the loss may be unbearable for you.
Therefore, we must face the mistakes in the market with a timely stop loss attitude. Don't compete with the market, admit that you lost when you lose money, and try to win it back next time.
2) Go short when the trend is up
This is the second common mistake, going against the direction of the market, or even wanting to outperform the market. Many traders want to seize market opportunities and try to make orders against the trend through some gossip, but the market is far more complicated than we imagined. What method is reliable to obtain the market direction in advance?
Regardless of short-term or long-term trading, the best way to trade is to follow the trend. Don't take in all possible information, too much will definitely do more harm than good.
3) Trading based on emotions
This is the mistake most novices make, relying on intuition to make orders, and applying trading strategies based on hunches instead of prudence. Those traders who can lose money for a long time may not reflect on their mistakes, but rely on intuition and have no experience to sum up.
Profitable trading requires trading planning, discipline, and perseverance. Our intuition will be disturbed by too many emotional factors. A disappointing transaction will make you narrow your position and make orders cautiously; a satisfactory transaction may make you enlarge your position and make orders recklessly. Emotion-based trading directly affects trading results, so be sure to strictly adhere to your trading system and eliminate trading emotions.
4) Selling too early
Traders are inherently greedy, so they may cause small losses in originally profitable transactions due to their reluctance to close their positions. For questions like this, remember to set profit targets. But there is another situation where the position is closed too early. Determining when to take a profit is a difficult problem in trading because we don't know how much the price will rise or fall.
One way to do this is to refer to your trading profit and loss statement, if the profit and loss numbers are growing, there is still room to trade; if the numbers start to flatten or drop sharply, then you need to close the position.
5) Operational behavior regardless of risk
People who just started trading have no risk awareness, heavy positions, large leverage, and frequent transactions, which stem from the eagerness to make money. But it often has the opposite effect. There is no point in trading the market if you think otherwise. This kind of thinking will let you try the "fun" of losing money quickly in the investment market.
In the trading system, risk management is more important than trading methods. In the investment market, adhering to long-termism and making money steadily is the right way.
The above is today’s sharing. What other mistakes do you often make in trading? Think about how to avoid them.
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