The above problem will be encountered by both swing and trend traders. Place an order today and start making profits the next day, which means you did the right thing, but on the third day it goes wrong and the price retraces significantly. At this time, every trader has to undergo a test, whether it is you or me, it is the same. , don't think that masters don't need to withstand the test, that is a wrong understanding, everyone is also under psychological pressure.
The only difference between a novice and an expert is whether they can control their emotions and have sufficient thinking and preparation for existing events at the beginning of the transaction. Take a look at the historical charts. Do unilateral trends without retracement often occur? Probably not. Therefore, we encounter such situations at every turn.
For example, if the trading system is a trend trading system, it means giving up a lot of swing profits. At the beginning of placing the order, I had expected that the price would retrace significantly, so I would only leave the market before it touched the cost zone of opening the position, and I would not regret that the profit I received would be wiped out. Because the initial thought was that this might be a trending market, and the purpose was to make enough money from this market.
Everything in the world has two sides, and no one knows the truth until the last moment. If you enter the market with a trend trading system, you must use the trend system signals to decide your exit. If you go short, you cannot judge that the trend will turn bearish before the price reaches a new low. During this period, the short-sellers are just trying to catch a wave of short trends. It may not be a short trend, but just continues to rise after a shock. Who knows? ?
Since you want to seize the trend, it is equivalent to deciding to give up this period of profit; if you want to seize the period of profit before the trend reverses, you may miss the big wave of the market. How could you miss it? Is it okay to close the position first and wait until the rebound ends before entering? If this is really the case, what else can be said? God cares for you so much! But what if it jumps short and opens low tomorrow? To pursue or not to pursue? What should I do if I chase and then rebound sharply? What if we don’t pursue it and the price continues to fall?
While answering this question I tell you all the possibilities. The truth is – the market is unpredictable. We can only formulate a trading strategy that is operable relative to the market trend, and decide what to do based on the strategy. For trend trading, the trading strategy is to give up the profits before the trend is completely out, and try not to lose money, so before the price reaches your cost zone for opening a position, you can leave the market as long as you keep the handling fee; for swing trading, As soon as the price starts to move in the opposite direction, close the position. Even if you miss a big profit later, don't regret it and look for the swing opportunity again.