$BEAT "No one likes to lose, but we must learn how to lose."
This statement applies in every field, especially in the cryptocurrency world.
In trading, the most important thing is not perfect techniques, but how to deal with losses.
No matter how excellent a trader is, they cannot completely avoid losses.
Losses themselves are not scary; what is scary is that you haven't learned how to control losses and how to remain calm during losses.
Often, it is not the stop-loss itself that causes emotional fluctuations, but rather poor position management.
It is because the position is too large, and the losses exceed the expected range, which makes you panic.
The key to trading is planning and execution:
Before opening a position, you must determine your strategy;
After opening a position, regardless of how the market fluctuates, rational and calm execution is the most important.
Unless there is a clear signal deviating from expectations, do not easily change your initial decision.
Because once you hold a position, your mind will start to generate expectations, and emotions will be affected.
You start to weaken the reverse signals and strengthen the forward signals, which easily leads you to lose direction in the market's reverse fluctuations.
Therefore, before opening a position, be clear about your basis; after opening a position, you must ignore emotions and focus on analysis.
Four Principles of Opening a Position:
Basis for Opening a Position (Technical Signals) - Ensure that the reason for entry is sufficient and the technical analysis is clear.
Stop-Loss Line (Key Support/Resistance) - Set a stop-loss point for each trade and execute it strictly.
Expected Target (Take Profit Range) - Clearly set a take profit point and never procrastinate.
Worst Outcome (Position Management) - Control the position to ensure that the maximum loss is within an acceptable range.
Regarding Take Profit:
Many people prefer to use open-ended take profit, believing that the market will continue to rise.
However, every market has an end someday.
Everyone can only earn money within their cognitive range; any excess is just "windfall."
Often, when the price reaches the expected take profit range, greed will make you give up on taking profit, resulting in a price reversal, and losses not only wipe out profits but can even trap you in a quagmire of losses.
That feeling is truly a double blow.
To avoid this situation, it is recommended to adopt a phased take profit approach or to retain a base position.
