Foreword: Some people say that in financial transactions, 80% of people die from leverage, 15% die from persistence, and only 5% survive.
Most traders have experienced the stage of lack of confidence and loss of confidence due to continuous losses. Some people still lose to the simplest and most difficult word "persistence" after defeating 80% of the people.
There is a saying that goes well: A good hunter is not accurate marksmanship, but patience.
Therefore, whether it is short-term or medium-term or long-term trading within a day, whether it is manual subjective trading or programmatic trading, you may encounter the problem of "failure" in the system, so what should you do when you enter a state of continuous losses?
Forex trading is sometimes the same as playing cards. When the hand is smooth, it seems that you can make money no matter what you do, but when your hand is not smooth, you can lose money no matter what you do. Of course, a large part of playing cards is luck, and sometimes there is no way to reverse it, but market operations are different. You are fully capable of changing this passive situation through your own efforts.
If you make a wrong judgment once in a while, it is a normal phenomenon to stop the loss, but when you find that the stop loss has been continuous for a period of time and the trading rhythm is disordered, it is very necessary to stop and adjust your mentality in time, otherwise it will become more and more chaotic.
It’s like dancing a ballroom dance. Once the dance steps are messed up and you always step on your partner’s feet, you can only stop on the spot and dance with your partner after stepping on the beat of the dance music. When doing the opposite direction, many investors are used to backhanding immediately. If the price corrects only slightly in the opposite direction, he may be forced to stop again.
Thinking is inertial, and he has no idea about changing direction. If you can discover the problem in time, you should be able to reverse the unfavorable situation very quickly by adjusting your tactics.
In fact, under such circumstances, you should stop first, exit the position in the wrong direction in time, allow yourself a period of time to adjust your thinking, and then decide whether to backhand the operation. This is the same as driving a U-turn. If there is no buffer process to make a U-turn suddenly, the car must be overturned.
People who just started trading often increase their risk preferences after consecutive profits, and it is difficult to refuse some opportunities with low chances of winning; or they are seriously risk-averse after consecutive losses, and cannot bear a little bit of risk, so they dare not seize it. A major strategic opportunity at hand.
Our oriental culture emphasizes moderation, balance, and harmony. The most important thing in trading is to grasp the balance, not to be biased towards a certain extreme, and to control our risk appetite.
The situation of continuous losses is different, and the coping methods are also different, but one thing is the same, that is, don't destroy your mentality due to losses at any time. We can lose money, but we cannot lose our hearts. Once the psychological defense line is disrupted, you will have no countermeasures under any circumstances.
How can we prevent problems in the psychological defense line? The premise is to strictly manage the funds in any operation, because as long as the funds are managed well, continuous losses will cause you a lot of losses, but they will not affect your combat effectiveness. And a fiasco of a heavy warehouse, it may not be able to turn around for a long time.
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