Many traders have had this experience: after several consecutive profits, they feel they have 'seen through the market,' and the originally strict position rules begin to loosen. They dare to move their stop-loss back and even think, 'I'll make one more profit and then take a break'—the result is often a large loss that gives back a significant portion of the previous profits.
Profit itself is not the problem; the problem is the 'complacency' and 'arrogance' that can easily arise after making a profit. A truly mature trader can maintain discipline while making money, allowing profits to snowball rather than become a roller coaster.
1. The three pitfalls that are easiest to fall into after making a profit
Increasing position 'betting bigger': For example, if normally only opening 2 lots, after profits feel that 'the market is accurate', directly increase to 5 lots. Once the market reverses, losses can be several times more than usual. Trader Xiao Zhou once increased his position from 3 lots to 8 lots after making profits in industrial products, only for one pullback to wipe out previous gains.
Relaxing stop-loss 'waiting for a rebound': After making profits, thinking 'even if there is a pullback, it will rise back', moves the original stop-loss position back, or even cancels the stop-loss. For example, after a 5% profit in agricultural products long position, moving the stop-loss from the 'cost line' to 'a 10% loss', eventually turns a small loss into a big loss.
Frequent position increases 'greed for more': Seeing profits makes one want to 'add more to expand gains', ignoring whether 'the trend continues'. For example, at the end of a trend, continuously increasing positions due to profits can lead to being trapped when the market reverses.
2. Four methods for calibrating mindset after making profits
Reviewing 'profit logic': After every profit, first ask yourself 'Was this profit due to a correct strategy or good luck?' For example, if industrial product long positions are profitable, is it because the trend breakout aligns with the strategy, or did it just happen to coincide with a short-term news stimulus? Only by confirming it is the strategy's credit can you continue to operate according to the original rules.
Not changing 'position rules': Regardless of how much profit is made, strictly adhere to the rule that 'single trade risk does not exceed 2% of the account'. For example, with an account of 100,000, the maximum loss per trade is 2,000 yuan, and this limit is not exceeded even if there are continuous profits.
Locking in part of the profit in advance: When profits reach 50% of the expected target, close 1/3 of the position first. For example, originally opening 6 lots long, when profits reach half the target, close 2 lots. This locks in gains and reduces psychological pressure from subsequent fluctuations.
Reviewing 'like in loss times': After making profits, don't just be happy; also record 'did this operation deviate from the plan?', for example, whether to take profits early or if there were opportunities to earn more, making every profit an opportunity to optimize strategies rather than a reason for indulgence.
Profit is the market's reward for discipline, not an excuse for indulgence. When you can remain calm while making money and adhere to the rules in victory, you can make profits continue to 'snowball' rather than being fleeting.
Good morning ☀, may each of your profits become a medal of discipline rather than an impulsive beginning.
