I have said that "80% profit target for each market wave". Some people ask why it is not 100%? Of course, everyone wants to do things more perfectly, buy at the lowest and sell at the highest. But which point is the highest and lowest? We cannot know before the market is finished. During the market development, we can only estimate that a certain point is the highest and lowest. By chance, the estimate may be correct, but this chance is no more than a few percent.
If we exit the market based on this possible accidental profit, we will often miss out on a huge market. If I count from the highest point in a big uptrend, and exit the market after the market reverses 20%, it seems that theoretically I will make 20% less profit (only in theory), but how big a market will it take to have a decent correction in a strong market? You often win a huge profit space for yourself with the casual mentality of "giving up" 20% at any time, but overall it is definitely "not worth the loss".
Looking back, how many traders who sold at the "high point" that just appeared and missed the big market are now regretting it? Although new high points continue to appear in a round of rising trends, we cannot judge which is the highest point. But when the market is pulled back, we can count whether it has been pulled back to 20% from the last high point, and whether it is time for us to leave the market and sell. This is exactly what we can see and do. So why choose 20% instead of 10% or 30%? This is not absolute, but just a matter of experience.
However, the following two points should be met when choosing the ratio:
(1) The market is always fluctuating. Don’t be frightened by a slight fluctuation and run away, thus missing out on a great opportunity to make a lot of money. To do this, you must be mentally prepared to give up a certain percentage point, and this percentage point obviously cannot be too small.
(2) You must ensure that most of the profit is not lost. To achieve this, the proportion cannot be too large. Of course, you must concentrate on increasing the exit price when the high point rises, and pay close attention to the proportion and momentum of the callback when the callback occurs, so that you can do better and more reasonably.
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