This wave of the bull market suddenly started when most people did not expect it, and the most critical part is that at that time, whether on the square or Twitter, many people were shouting not to chase the market and to short at highs. As a result, many not only missed this rally but also suffered losses from shorting.
🔻 Why do we say that trading should only be based on what is seen on the market, rather than guessing the trend?
Let me share a typical example from around me recently.
He observed the trends of previous years and found that the market usually weakens in July and August. He thought it was perfect to short now and then buy at the bottom later, waiting for the interest rate cut in September to kick off a major bull market. At the end of June, he saw that the MACD of BTC's daily chart was about to cross the midline (it was about to cross but did not actually go down), which further confirmed his guess that now was a once-in-a-lifetime shorting opportunity. Of course, shorting at that position was not a problem.
The issue came when, after hitting his stop loss, he felt that there was no interest rate cut and no good news, so why would it rise so much for no reason? He was sure that the big players wanted to scare off the bears and then lure in buyers before crashing the market. So he continued to indulge in K-line fantasies and shorted at even higher positions.
In the end, he kept guessing the top and was repeatedly worn down, feeling even more resentful, wanting revenge, and ultimately got liquidated. He came to me lamenting that his originally good relationship also ended, and now he not only had nothing but also owed hundreds of thousands in loans.
This is a very typical case of indulging in K-line fantasies combined with a revenge mentality. Trading should be done one order at a time, rather than following your script.
At the same time, do not let the emotions from the previous trade affect your next trade. If you can't control your hands, I really advise you not to touch contracts, especially when experiencing a painful stop loss, you need to control your hands even more. Use a small position to explore the market and first build up your trading confidence.
