If you must trade contracts, please engrave these few sentences in your heart. It's not to scare you, but too many people have fallen into these pits, and I have marked them out for you in advance.
1. After cutting losses, don't rush back in
Losses are normal, but your reaction after cutting losses determines whether you will recover or continue to bleed. Some people go crazy opening positions to make up for losses, but end up digging deeper; others simply shut down, calm down, and review. The truth about frequent cut losses is not that the market is targeting you, it's that you should stop. $WAL
2. Don't pin your hopes of recovery on the next trade
Trading is not a tool for getting rich overnight. The more you lose, the more anxious you become; the more anxious you are, the heavier you bet — this is the fastest route to liquidation. Maintaining your mindset is far more important than seizing opportunities.
3. In the face of trends, don’t be stubborn
Once you understand a one-sided market, don’t think “it should pull back.” Trading against the trend is the number one source of losses. Whether you are a novice or an experienced trader, following the trend is the way to survive; going against it will only cost you tuition.
4. If the risk-reward ratio is not acceptable, don’t touch the trade
Earning 1 and losing 1 is equivalent to playing for nothing. At least achieve a 2:1 ratio before considering entering. Not every “opportunity” is worth your action.
5. Frequent trading is a chronic suicide for contracts
If you are not a skilled trader who watches the market every day, don’t think about catching every fluctuation. Most “opportunities,” looking back, are the trades that made you lose money. Less action is more valuable than more action.
6. Only earn the money you understand
Trends you don’t understand, insider information you've heard, and following trends — even if you earn this money, you won't be able to keep it. If your understanding is inadequate, the money you earn will have to be paid back eventually.
7. Holding onto a position is the first step toward the abyss
The most common mistake beginners make: being reluctant to cut losses. After a loss, you want to wait a bit longer, to break even, to wait for a rebound, to wait for a miracle. What you end up waiting for is often a larger loss. A reminder: do not hold onto positions.
8. A drift will always lead to losses
After making a few profitable trades, you think you are “the chosen one,” and in the next trade, you start to relax, over-leverage, and not set stop losses. The market specializes in punishing those who drift.
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