Long-term futures trading easily falls into the cycle of "making small profits and losing big money." How to break this vicious circle?
Don't let your mindset dictate your actions; firmly stick to your strategy and trading rules.
What causes this?
Seeing a good signal and entering the market, making a small profit, and then hurriedly exiting. Afraid of profit retracement, feeling pleased with making a little money. But once there's a missed opportunity or being trapped, the mindset collapses immediately.
Regardless of whether the long-term trend has reversed or whether the key signal is still there, in a moment of heat, over-leverage, or blindly chasing others' strong varieties. The result is that all the small profits are lost, and quite a bit more is lost.
Who can we blame for such issues? Not the market.
Blame yourself for treating the fantasies in your head as the market's reality; when greed and fear take over, you throw your trading system out the window.
Finding a solution is actually simple; just two things: First, don't rush to exit when making small profits.
As long as the multi-cycle resonant trend is intact and the key support and resistance levels are not broken, hold onto the position and let the profits follow the market.
Don't be overly anxious about small floating profits and miss out on big trends. Second, when losing, don't stubbornly hold on. Set a stop-loss level before entering, and this stop-loss level must be a critical point where the multi-cycle resonance fails, not just a random number you thought of.
Once the stop-loss is triggered, leave the market without hesitation; absolutely do not entertain the thought of averaging down your costs. Also, don't be envious of others' positions.
No matter how well someone else's asset performs, if it doesn't fit your system, don't touch it.
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