Recently, the market has continued to decline. Although there are occasional technical rebounds, both bulls and bears are facing the dilemma of being caught in large-scale positions. The in-depth analysis of the impact of being trapped in positions is as follows:
1. The primary impact is the liquidity crisis. Being trapped in positions directly leads to the freezing of trading capital. If strict risk control management is not implemented in a timely manner, in extreme cases, it may evolve into long-term capital stagnation, severely restricting the efficiency of capital usage.
2. Being trapped in positions can trigger the psychological account effect for traders, excessively focusing on the psychological anchoring of floating gains and losses. This cognitive bias leads to indecision in executing stop-losses, both worrying about the "stop-loss trap" of being closed out just as a rebound occurs, and fearing the "expansion of floating losses" if the trend continues. More importantly, this psychological pressure can create a "frozen effect" in trading decisions, significantly reducing the willingness to execute subsequent trades.
3. From the perspective of capital management, being trapped in positions can cause serious capital occupation issues. This not only limits the ability to capture trading opportunities but may also lead to missing out on quality trading opportunities during critical market windows due to insufficient margin, creating a typical "opportunity cost trap".
Follow the trends of Guoxing, helping you see beyond the surface, staying calm in both bull and bear markets.
