If you want to avoid losses in short-term trading, there are indeed some small tricks that can be lifesaving.
Recently, many new followers have come to me after being shaken out by the market fluctuations. I've summarized a few of the most practical points for them; every little bit of loss reduction counts:
1. Don't chase highs.
The market moves in waves and can't always keep surging.
Chasing highs easily leads to being trapped.
How to judge?
If the price has already surpassed half of the previous high/low range, don't chase anymore;
Or, if it has surged more than half of the daily volatility in one go, the risk of jumping in is high.
To simplify, use BOLL; don't rush when it's near the upper band, wait for a pullback to the middle band or near the 10-day moving average before getting in.
2. Don't catch falling knives.
Bottom fishing isn't a matter of life and death. Wait until it's stable before making a move.
How to determine stability? Look at the structure; double bottoms and rounded bottoms are the safest patterns.
A V-shaped recovery is just an exception; most declines will consolidate for a while.
Remember: If the consolidation area appears near the 1-hour midpoint, it's mostly a continuation, not a reversal.
3. Don't trade during off-peak hours.
Try not to open positions after 2:30 PM and after 10:30 PM.
During those times, the trading volume is low, and the direction is unclear; the market has basically run its course.
4. Pay attention to trading volume.
The volume at the 5-minute level is the most critical.
A rise without volume is false;
A breakout with volume is the real signal.
The best opportunities often occur when moving averages converge and suddenly increase in volume; that's mostly the main force exerting pressure.
5. Manage positions and losses.
If a trade is uncertain, it's better not to take it.
Stop-loss is not about confidence; logic is.
If the logic is correct, even if you incur losses, you can come back again.
Don't fear being slow; fear being chaotic.
The essence of short-term trading is not to make money every day, but to first learn to "minimize losses." If you can protect your capital, the market will eventually reward you.
