1. Make good use of stop-loss
When trading, you should establish a tolerable loss range and make good use of stop-loss trading to avoid uncontrollable losses! The stop-loss range should be based on the account's funds. If a stop-loss occurs, do not hesitate, as you have eliminated the risk of the market continuing to worsen and unlimited losses.
2. Do not rely solely on luck and intuition
If you do not have a fixed trading method, then your profits are likely to be very random, relying on luck. Such profits cannot be sustained. In other words, on a bad luck day, you will incur the same losses. Trading intuition is important, but relying solely on intuition is a risky behavior. Understanding the reasons for profit generation and developing your personal profit operation methods is the most crucial.
3. Act within your means
You should measure your trading volume based on account amount and avoid overtrading. Generally, do not let the risk of each trade exceed 20% of the account funds. Following this rule can effectively control risk. Overtrading in one transaction is an unwise practice that can easily lead to uncontrollable losses.
4. Sufficient trading capital is necessary
The smaller the account amount, the greater the trading risk. Therefore, avoid allowing your trading account to have only enough for a 100-point fluctuation. Such an account amount does not permit a single mistake, but even experienced traders can make errors in judgment.
5. Learn to thoroughly execute trading strategies and avoid making excuses to overturn original decisions
To avoid this fatal mistake, you must remember a simple rule: do not let the risk exceed the previously set tolerable range. Once the loss reaches the predetermined limit, do not hesitate—immediately close the position!
6. Mistakes are inevitable; learn from them and do not repeat them.
Errors and losses are inevitable; do not blame yourself. The important thing is to learn from these experiences and avoid making the same mistakes. The sooner you learn to accept losses and gather lessons, the sooner profitable days will come. Additionally, learn to control your emotions—do not be arrogant when making money, nor be discouraged by losses. In trading, the less personal emotion you have, the clearer you can see the market situation and make correct decisions. Face gains and losses with a calm mindset, and understand that traders do not learn from profits but grow from losses. When you understand the reasons for each loss, it indicates that you are one step closer to profitability, as you have found the correct direction.
7. Yourself is the biggest enemy
The greatest enemy of traders is themselves—greed, impatience, uncontrolled emotions, lack of preparedness, excessive self-importance, etc. Such factors can easily lead you to overlook market trends and make erroneous trading decisions. Do not trade simply because you haven't entered the market for a long time or out of boredom; there are no strict standards that require a certain amount of trading within a specific period.
8. Follow the trend, do not go against it
Words are just words; actions are actions. Some people may understand every point mentioned in the above text, but their practical operations are still full of problems, as the mindset during trading is completely different from when reading this article. At this moment, it is necessary to find a trustworthy teacher to help you with risk control, allowing you to trade without worries and effectively manage risks.
The most important thing in investing is not how much you can earn at once, but whether you can control risks and achieve steady long-term profits. For any operation, before entering, first look at the trend, identify the correct trend, then find a suitable entry point, and finally control the timing. Find the correct direction, minimize risks, and maximize profits. Because of focus, one becomes professional. In investing, everyone has their own unique experiences and stories.