Dear Hui friends, how to solve the situation of small profits and big losses?

Hello, the subject, I have been a trader for nearly 10 years. I also had the problem you mentioned when I first started trading. So let me first talk about some of my personal experience.

In terms of trading profit and loss, it can basically be divided into five types: big loss, small loss, no loss, no profit, small profit, and big profit. Then we need to get rid of big losses and no losses and no profits. Because a big loss is likely to cause the account to shrink greatly, and the situation of no loss and no profit, I personally feel that there is no need to stay in this market. Then there are only small losses, small profits and big profits left. The reason why small losses are included is because we cannot guarantee a 100% correct rate, so what we have to do is not to let ourselves lose a lot, and then make up for this small loss with the small profits later, and then use the big profits to make up for it. To realize the profit of the account. Let me draw a sketch below to illustrate the capital curve of such an account:

A simple sketch illustrates what I personally believe to be a funding curve. It’s a bit like the trend of the market. In the small loss and small profit, our capital curve belongs to the consolidation stage. After the breakthrough, it belongs to the violent rise stage to realize the growth of capital.

Let's get down to business now. In daily transactions, the most common situation is a small profit and a big loss. It can be summed up into two categories: the first category is one's own technical problems; the second category is mentality problems, which we can also call execution problems. So let's start with these two aspects.

1. Technical issues:

Have you ever had the feeling that "those bigwigs on Wall Street have hundreds of billions of dollars in their hands, but they are still staring at you?" Because when you buy, it will fall, and when you sell, it will rise. Staring at you, how could such a thing happen? In fact, it's not that they are staring at you, but because of the ever-changing market itself, you can't tell when it is rising and when it is falling. No matter what industry you are in, for technicians, you must have excellent skills to be competent for this job. Well, in the foreign exchange market, traders are also technicians, so we must also have our own set of trading techniques, commonly known as trading systems. But this trading system must be an effective trading system that has been tested for a long time. It cannot be said to be effective if you put it together or put it together. It must be a complete set of trading system.

2. Psychological problems:

When we have our own effective trading system, there may still be problems of small losses and big profits. So this is a matter of heart. Mental problems can also be divided into two types: the first is that the investment is too large or the number of orders for transactions is too large, which makes it impossible for oneself to have a good mentality. Many people use loans or borrowings to conduct transactions. Using such money to conduct transactions must belong to the kind of situation where only profits are allowed but no losses are allowed. Such money cannot be used to carry out such high-risk investment products. Assuming we have 1 million, then we can spend up to 200,000 for this high-risk investment product, because even if all the money is lost, it will have little impact on our life and our mentality will be more peaceful. The other is that the order lot is too large. Just imagine, if you invest a total of 10,000 US dollars, then you place 10 hands in each transaction and 0.1 hands in each transaction, do you feel the same in your heart? The answer is definitely not the same. Therefore, we should carry out light positions. It is recommended that the maximum loss of each transaction is set at 2%, which is 10,000 US dollars, and each transaction is only allowed to lose 200 US dollars. In this way, the burden on yourself will be better, because the position is relatively light. Moreover, it takes 50 consecutive losses to liquidate the position, which is almost impossible to happen.

The second is lack of self-confidence. This situation will basically happen after a continuous loss, and you will start to have thoughts. Because after consecutive losses, many people will wonder whether they have not learned it, or whether there is something wrong with this trading method? Once such a mentality is generated, it is easy to lead to an uneasy mentality, unable to strictly follow one's own trading plan to trade, and will eventually suffer a big loss. Therefore, when we have doubts about ourselves or the trading system, we should not make a conclusion based on a few orders. I personally think that it takes at least 100-200 transactions before we can make a conclusion. I also lost 10 transactions in a row, but I still have confidence in my trading system, because I have traded tens of thousands of transactions in the past few years, and it is clear at a glance how high the correct rate is and how good the profit-loss ratio is.

In a word, if you want to have a good mentality, you must first have trading skills, so that you can have a bottom in your heart, use technology to match mentality, use mentality to achieve technology, and finally achieve the increase in account funds.

Thank you for watching, welcome to reprint and comment, please pay attention to me, thank you!