1. Reduce the risk-reward ratio
Newcomers often find it difficult to endure long periods of floating losses and constant stop-losses to catch a big trend, and may very well run out of funds or collapse mentally before the big trend appears. Therefore, I recommend that newcomers reduce the risk-reward ratio, but not too low. Generally, the risk-reward ratio can be set around 2 to 3 times. The specific ratio should be adjusted based on market conditions. If the market is suitable for a 2 or 3 times risk-reward ratio, use 2 or 3 times; if the market is particularly good, you can boldly try a 4 or even 5 times risk-reward ratio. Doing so can bring the win rate closer to 50%, that is, between 45% and 55%, making it easier to maintain a good mindset. A win rate of 20% like that of a couch potato is hard for most people to persist. If one pursues a risk-reward ratio of 10 times or even 20 times, they must endure long periods of stop-losses and floating losses.
2. Accept missing out:
Not wanting to miss any market movement and trying to catch every big trend will inevitably sacrifice the win rate. Newcomers should calmly accept missing out, sacrificing a portion of the market opportunities to capture the more certain parts. For example, if there are 10 market waves within a year, we only need to catch 2 to 3 of them, and the profits will still be considerable, with a smoother profit curve and fewer stop-losses. Focus on the market context rather than technical details: instead of delving into a large number of technical books and videos, it is better to learn to judge the market context. Invest more effort in good market conditions and observe and rest more in bad conditions, only making easy money. This is very crucial. The couch potato's operations are very simple; most of his profits come from the last two trades. If he does not persist in executing his plan and gives up early, he would not have such results.
Having navigated the market for many years, I am well aware of the opportunities and pitfalls within it. If your investments are not going well and you feel frustrated by the losses, leave a 999 in the comments! I will share insights.
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