Share my secrets with you
During trading, most investors are easily confused by the constantly changing market conditions and cannot see the essence of trading. They pursue certainty, huge profits, and the legendary Holy Grail every day, only to get lost in the gains and losses of trading interests and fail to understand the principle of trading—learning to balance gains and sacrifices.
1 Learning to balance gains and sacrifices is the first step toward successful trading. Both taking and giving are important. If you only take without giving, the market will not give you a chance to survive; if you only give without taking, you will cut off your own chances of survival. A trading system that can achieve stable profits must include the art of balancing gains and sacrifices. If you want to achieve huge profits, you must understand that the premise requires holding a large position, and heavy trading does not have the safety of light trading, so you sacrifice safety. On the other hand, if you prioritize safety, then you need to trade with a low position, sacrificing the short-term realization of huge profits. If you take the initiative to close positions with some profit, you can feel at ease and avoid the pain of profit withdrawal, but you sacrifice the possibility of future profits. Conversely, if you choose to continue holding, you sacrifice peace of mind. However, most investors cannot correctly and reasonably balance gains and sacrifices. They exhibit their greedy nature through their trading methods, wanting both low risk and high returns, to buy at the bottom and sell at the top, to catch the trend but avoid volatility.
Under the temptation of various interests, everyone expects to find a perfect trading method. Unfortunately, this is the biggest lie in the market.
2 Most people get lost in the temptation of profits
I once had a trade that I want to talk about. I held a short position, and during the trading process, the market plummeted sharply and then significantly rebounded. I had a considerable floating profit during the rapid decline, but due to the sharp drop at that time, a friend of mine proactively closed the position, manually stopping the equity fluctuation, and retained most of the profit, foregoing respect for the system.
There is no definitive right or wrong outcome in this case. It is clear that we both made gains and sacrifices. I chose absolute respect for the system, but sacrificed the smoothness of the equity curve and was willing to endure its retracement. He chose definite profit but sacrificed absolute respect for the system.
From this result, he may be right because his profit far exceeded mine. However, at some future point, he may not make the right choice due to fear of extreme market uncertainty. In future larger market movements, he may lack the courage to hold positions till the end. His resilience and tolerance for trending markets would diminish, and over a longer period, his choices may turn out to be less favorable than mine.
3 Make your own balancing choices based on your actual situation
People have desires, reflected in the balance of your account. If your desires are large, your account balance relative to your assets should be substantial. Only significant profits can satisfy your desires and motivate you to continue trading in the market.
However, we need to understand and make trade-offs. To gain more profit from the market, you must sacrifice more, such as your total assets experiencing significant fluctuations, and you may lose your composure and calmness due to profit volatility. Conversely, if you lower your desires and maintain them at a balanced level, control your positions, and pursue your own profits, you may become more composed, deepen your understanding of the essence of trading, and significantly improve your trading skills.
Buying low and selling high is difficult to achieve sustainably. Even if it can be done, it lacks sustainability. If you only take without sacrifice, the market will abandon you. Therefore, traders should value the art of balancing gains and sacrifices, let go of unrealistic fantasies, lower profit expectations, reduce positions, avoid excessive leverage, and do not chase overnight riches. In this way, you will gain more in the end.
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