Avoid emotional interference, trade rationally
Always set a stop-loss when opening a position
When trading, it is essential to set a stop-loss. If you do not set a stop-loss, all your energy will be focused on hoping the market will recover, neglecting other trading opportunities. A common mistake is to increase positions against the trend, hoping to lower the average price to reduce losses, but this often leads to liquidation. Another mistake is locking in positions, which means opening a reverse order for hedging; this can often lead to a situation of being trapped and may result in deeper losses.
Do not easily modify stop-loss levels
When the price approaches the stop-loss level, many people will adjust the stop-loss level temporarily out of a desire not to be stopped out. Although this practice can avoid an immediate stop-loss, it actually increases the risk of greater losses because the market may continue to move against you.
Behind these mistakes lie emotional interference and psychological hope. How do I know this? Because I have made these mistakes, suffered significant losses, and only gradually learned to understand and avoid them. By writing this down, I can remind myself and also hope to help others avoid taking the wrong path.