The Four Stages of Trading - The Road to Stable Profitability

second stage

Master certain profit rules and learn to attack. Compared with the first stage, the certainty is increased. It no longer predicts the trend, but follows the market. Only follow up when there are signs of the trend starting, and then let the profits run. At this stage, the profitability is very strong and you can make a lot of money. However, you do not have enough understanding of the importance of stop loss and lack of flexible stop loss techniques, and you will eventually be wiped out. Because you have made a lot of money by sticking to the trend, and you have tasted the sweetness, it is easy to stick to it when profits retrace, stick to it when you lose, and let the loss run away.

It is okay to make no money in a transaction (it is acceptable to retrace the profit from the profit to the cost), or to make a small loss. Since it has no impact on the principal, it is treated as if there is no such opportunity. If you continue to repeat it, at least it will not lead to quitting the table, as long as As long as you're at the poker table, there's always an opportunity to make a lot of money. But if a big loss occurs, then a bigger profit will be needed to restore the principal. Before this big profit, it is likely to experience another big loss. Two big losses will cause your mentality to collapse, and you will be on the verge of liquidation. Once you realize this, you will start to study stop loss in depth, continuously improve your stop loss ability, avoid the possibility of big losses in the trading system, and prepare for the next stage.