Many times, trading losses do not stem from a misjudgment of the market but from succumbing to one's own operational inertia. The following six short-term trading principles may seem simple but are often overlooked; mastering them can help you avoid many pitfalls:
1. Wait for trend reversal signals, avoid engaging in uncertain market trends
If high-level consolidation has not ended, there is a high probability of new highs; if low-level sideways has not bottomed, it is easy to continue to explore new lows. Maintaining a wait-and-see approach before clear reversal signals appear is a more prudent choice; blindly entering will only increase risk.
2. During the fluctuation period, keep your hands off, refuse ineffective operations
During the sideways phase, fluctuations are chaotic; entering the market often depletes patience and funds. Most beginners' losses stem from frequent operations during fluctuations, attempting to make quick money, ultimately getting washed out repeatedly.
3. Follow the daily line sentiment operation, reduce subjective judgment
Consider buying when the daily line closes in the red and choose to sell when it closes in the green. Following the overall market sentiment is more reliable than making decisions based on gut feelings, especially suitable for beginners to establish operational discipline.
4. Understand the rhythm of decline and grasp rebound opportunities
A slow and shallow decline usually has limited subsequent rebound space; however, after a sharp drop, a quick rebound often follows. Clearly perceiving market rhythm changes is essential to timely capture fleeting opportunities.
5. Pyramid-style position building, reserving buffer space
Enter the market in batches, gradually increasing your position, always keeping some funds as 'bullets.' This approach can reduce the risk of a single entry, allowing for adjustments and additional purchases even if a misjudgment occurs.
6. Extreme market conditions will definitely consolidate; determine the direction after a reversal
After a significant rise or fall, the market will inevitably enter a consolidation phase, and after consolidation, it will choose a new direction. Do not go all-in at a high point, nor blindly invest at a low point; wait for clear signals to act in order to better grasp the trend.
The market is never short of opportunities; what is lacking are those who can stabilize their mindset, endure fluctuations, and survive. Internalizing these principles into operational habits is essential for a longer trading journey. The so-called 'experts' are merely those who execute these basic logics with sufficient resolve.
