The essence of trading is to improve the tolerance for holding positions, allowing the account to 'live longer' amid volatility. 99% of retail investors lose money, and the crux lies in two extremes: unable to hold onto winning positions and stubbornly holding onto losing positions.

The deadly issue for retail investors is emotional trading, acting like 'gamblers': they run away with small profits for fear of profit withdrawal; they stubbornly hold onto large losses, fantasizing about a rebound. For example, buying 'metaverse concept stocks' out of trend, cutting losses after a limit down, only to see a 20% rebound in a week; a futures novice wanting to 'get rich intraday' misses out on the rise of BTC. The core problem is that greed makes people run away with small profits, while fear causes them to stubbornly hold onto large losses.

The core of a scientific trading system is stop-loss, position sizing, and hedging; stable profits rely on 'dumb methods':

• Set stop-loss points based on technical levels, determine stop-loss before calculating position size. For example, if going long on BTC, set the stop-loss below the support level at 28,000 USD, and exit if it breaks. If the support level is close, the position can be heavier; if the support level is far, the position needs to be lighter.

• Use light positions to test and hedge risks. Experts only use 30% of their funds for testing, for example, with an initial capital of 800 USD, they first invest 240 USD to go long on ETH, losing 5% means losing only 72 USD, which does not affect the principal. They can also short ETH while going long on BTC to hedge against volatility.

• Replace 'gambling' mentality with probabilistic thinking. The Kelly formula shows that with a win rate of 55% and a win-loss ratio of 2:1, one will win in the long term. Retail investors often neglect probabilities due to 'overconfidence', such as heavy investment in delisted stocks ultimately resulting in total loss. One must acknowledge that the market is unpredictable, replacing 'precise errors' with 'vague correctness'.

Once, a fan frequently cutting losses lost 80% of their capital, later strictly following: only trading daily line breakouts, position not exceeding 30%, stop-loss at 5%, take profit at 20%, cut position at a 5% loss.

The market is not short of opportunities, but what it lacks is 'stability'. Retail investors always dream of 'getting rich overnight', but neglect 'compound interest'. True experts prioritize survival before making money, controlling positions before seeking profit. $BTC #杰克逊霍尔会议 $ETH #美国初请失业金人数 $SOL