Veteran traders reveal the essence of trading.


Good trade positions usually have a small stop loss, with each loss controlled between 2%-5%.

As an experienced trader, I don't want to go into too much detail. Here are a few concise points:

1. Develop a high win-rate, low-risk trading system. You can seek advice from veterans, but ultimately, it depends on you because everyone has different personalities and thus different trading strategies. However, the core remains the same: trend trading is more likely to be profitable.

2. Execute decisively when a trade signal fits your system; avoid any trades that do not fit. Master one skill well, and you can outperform 90% of people. This isn't because you're extraordinarily skilled, but because over 90% of people lack a pure trading system and rely solely on intuition, leading to devastating psychological impacts after consecutive losses. Once emotions become uncontrollable and you try to recover losses immediately, the nightmare begins.

3. Manage your funds wisely. Good trading positions usually have small stop losses, keeping each loss between 2% and 5%.

4. Repeat the above three points and persevere. The most challenging part is not the difficulty of the task itself, but maintaining your perseverance. This is the fundamental difference between winners and losers. Many people fail not because they are stupid, but due to inconsistency or indecisiveness. They cannot maintain their original intention. It's fine to have lofty visions for the future, but don't forget to carefully take each step in the present. Regarding stop loss, which concerns survival and future recovery, I'll simply add a few points. Set up your trading framework first and have a comprehensive overview, starting from the larger time frames like daily, four-hour, hourly, 15-minute, and 5-minute charts to examine the K-line structure. It’s well-known that trading is probabilistic; there's no 100% certainty. The highest probability occurs when all time-frame charts have consistent directional trends, either all bullish or all bearish. The stronger the resonance, the higher the accuracy. Over time, you'll become familiar with structural changes and can segment smaller trends accordingly. For shorter trends, avoid being greedy, holding trades for over two days on time frames above four hours, and exiting within a day for hourly trades. Stop-loss levels depend on the time frame you're trading. Beginners are advised to trade on the hourly or four-hour charts due to lower trading frequency and fewer mistakes. Stop-loss points should be based on the trend line and cutting line. The key is not the number of points but the proportion of your stop-loss amount to your total capital. For example, with 500x leverage, buying 1 lot of GBP with a margin of $200 and losing 100 points equals $100. Ideally, your capital should be around $5000, making the loss ratio 2% of the total amount. If this trade incurs a loss, the next stop loss should be 2% of $4900. This is purely about capital ratio. Before placing a trade, assess the risk-reward ratio. A stable system will have a high probability of success, not relying on a 50/50 coin flip. Based on fundamentals, market structure, and success rates, you can differentiate between different grades of opportunities. Markets with over 90% success rates exist but aren't frequent; you'll need extensive back-testing and live trading to develop a refined system. Don’t follow others blindly; seek the truth yourself. Many traders achieve extraordinary returns but choose not to argue about it. Ultimately, as you perfect your trading system, the process becomes more straightforward and mechanical. Recognize which opportunities to pass and which to seize decisively. With clear understanding, even pure technical analysts can achieve stable profits, because all markets are participated in by humans. Even AI-based trading systems follow natural laws and behavioral sciences, still exhibiting herd effects, as the momentum of trends is unstoppable.


Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

The End



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