The way of trading is to defend the unlosable ground and attack the winnable enemy.
A loss of 50% on 1 million becomes 500,000, but to grow 500,000 to 1 million requires a profit of 100%. Each success only takes you a small step forward. But each failure can set you back a big step. It takes an hour to walk from the first floor of the Empire State Building to the top. But it only takes 30 seconds to jump from the rooftop back to the ground. In trading, there will always be unexpected events that can lead to losses. The simplest way to determine whether to use a stop-loss is to ask yourself one question: If you hadn't established a position yet, would you still be willing to buy at this price? If the answer is no, sell immediately without hesitation.
Trading against the trend is the beginning of failure. You should not fight the market or try to defeat it.
There is no need to be smarter than the market. When the trend comes, respond and follow it. When there is no trend, observe and stay calm. It is not too late to act once the trend becomes clear. This may cause you to miss some opportunities, but it wins you the safety of your funds. Your goals must align with the market and follow its trends.
If you align with the market, profits will naturally flow in.
If you misinterpret the trend, you must use the old and reliable umbrella—stop-loss orders. This illustrates the relationship between trends and profits. The two most basic rules for successful trading are: cut losses and hold long. On one hand, stop the losses and control the passive. On the other hand, do not easily exit until the profit trend is over; let the profits grow fully. In a bull market, most stocks can withstand temporary setbacks. Because the next wave of rises will quickly get people out of trouble and even make a profit. At this time, if you bought right, you should also learn to remain still, regardless of the winds and waves; it feels like strolling in a quiet garden.
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Seeing the market clearly gives you the confidence to operate. Stably earning profits is far more practical than fantasizing about getting rich.
