Is investing always about 'small profits and big losses'? These key questions deserve your attention

Friends who have been through the investment market have likely had such frustrating experiences: after finally catching a profitable trade, you panic and cash out early, only to miss out on a subsequent surge; but once you encounter a losing trade, you cling to hope and stubbornly hold on, ultimately losing everything. Why does this happen?

Firstly, many people lack a stop-loss awareness and do not set reasonable stop-loss levels when trading. The market changes rapidly, and once the direction contradicts your position, they are reluctant to take a small loss and exit, resulting in a bigger hole. The solution is simple: strictly implement stop-loss and take-profit strategies; if the direction is wrong, decisively “cut your losses”.

Position control is also very important. Many people operate cautiously with light positions when making profits, but when they incur losses, they throw caution to the wind, heavily investing in hopes of making back their losses, resulting in small wins but significant losses. Reasonable position control is necessary; avoid going all in impulsively to reduce risk.

Mindset is crucial. Feeling panicked during losses and overly tense during profits makes trading difficult. It is important to maintain a calm mindset and not let emotions dictate your trading decisions.

A shallow understanding of the market and trading can also lead to hesitation and unrealistic expectations of profits and losses. Spend more time researching market trends and improving trading skills to feel more confident.

Additionally, trading without a clear plan and strategy, relying purely on impulse and making arbitrary decisions, is not effective. You need to establish a trading system that suits you, clearly outlining entry, exit, and stop-loss/take-profit rules, and strictly adhere to them.

So how can we overcome these challenges? Learn technical analysis methods to enhance your market judgment; develop a detailed trading plan and strictly execute it; regularly practice mindset training through simulated trading or small capital real trading; and keep a trading journal.