Traders naturally face the problem of closing a position after opening a position. At first glance, there is not much difference between closing a position and opening a position. It is nothing more than choosing an opportunity to make a transaction in the opposite direction. However, judging from the practical experience of many traders, the difficulty of closing a position decision is much higher than that of opening a position. No wonder some people conclude: "It is only the apprentice who can open a position, and the master who can close a position."
When a trader makes a decision to open a position, since he does not hold a position and does not involve winning or losing, he has no psychological pressure. In this case, it is relatively easy to maintain a certain degree of objectivity in the judgment and analysis of the market. However, once a position is held, the objective judgment of the market will be greatly reduced. This is because changes in the market will cause the profit and loss of the position to be in constant change, and the change in the amount of profit and loss will cause a great psychological impact on the trader. Shock, mobilize some bad emotions of traders. For example, when the position is profitable, although the analysis judges that the price will continue, the position is quickly closed because of fear that the market will reverse and the profit will be taken; or, although the analysis judges that the price will reverse, but out of greed for more profits Psychologically, I waited and watched again and again, and refused to close my position for a long time. On the contrary, when the position is facing a loss, although the analysis and judgment price will increase the loss, the unwillingness to admit defeat makes you unwilling to stop the loss, or even though the analysis and judgment price fluctuates slightly temporarily, you stop the loss quickly because of fear.
In the above-mentioned performances, the trader analyzed and judged the market when closing the position. Although this analysis and judgment may not be accurate, it somewhat shows the objective thinking of the trader to a certain extent. Under the influence of fear and greed, this kind of objective thinking will be suppressed. The stronger the traders' emotions, the less objective they are in judging the market. Over time, traders will find that the result of the emotional decision-making method of closing positions will be to win small money and lose big money, which will eventually lead to more losses and less wins.