To control losses, the most important thing is to determine the exit criteria before entering the market. If it's at the original price, how do you define the stop-loss range set after opening a position? What if you open a position and immediately incur a loss? What if there is a floating profit, and then the market pulls back, only to continue in the original trend?

1. When opening a trade, you must allow the market to move against you for a certain distance, meaning you must allow for losses on each position; otherwise, you simply cannot trade! Because you are almost guaranteed to encounter situations where you open a position and immediately see a loss, which could even last for a long time. Should you really stop-loss as soon as you encounter a floating loss?

2. Some say that I can wait for a floating profit and then not allow a pullback that exceeds the original investment; I absolutely will not allow a loss of capital! This contradicts the logic of point 1. The formation of a trend is never immediate; even if you already have a floating profit, there is still a possibility of a significant pullback. If you do not have a set standard to define this, you will fall into the trap of holding onto losing positions and high-frequency trading.

3. Generally speaking, the larger the allowed pullback, the lower the frequency of stop-losses and the greater the amount, thereby enhancing the ability to capture trends. Otherwise, you will only find yourself in a continual cycle of high-frequency stop-losses, which can explode your mindset.

4. Habitually, the stop-loss point should be a dynamic amount set according to the profit and loss situation of the position, and should not be a psychologically preset amount (for example, breaking even at the original price).

Prices never move straight up or down; there is always volatility. Therefore, to capture a trend, you must allow the price to occasionally, or even frequently, move in an unfavorable direction. In the early stages of a trend, this often means that 10% or even 30% of profits may vanish, turning into a loss of capital. In the mid-term of a trend, you may watch helplessly as 80%-100% of profits get cut in half. In these situations, the fear of returning to the original price or the strong desire to lock in tiny profits is very powerful. Trend trading usually opens positions at resistance and support levels, and often, this situation is initially characterized by fluctuating losses. If stop-loss management is not handled well, over time, such trend traders will ultimately become losers.