Only those who recognize their own strength have the capital for short-term trading!
Short-term trading is more of a cultivation than a technique. Only when the personality type, inner cultivation, and external techniques are fully matched can you be led to success and maintain a stable success. 4 principles of short-term trading 1. Control the amount of capital invested each time and limit the single loss In general trading books, it is recommended to control the maximum loss on a single short-term trade to below 0.5%-2% of the total capital. The larger the capital scale, the lower the percentage of single losses should be. Less than 0.5% is an ideal situation. Don't underestimate 0.5%, for example, 5-10 transactions can be generated within a week or two. If each transaction happens to lose 0.5%, then it would be a loss of 2.5%-5% in a week. If a single loss becomes 2%, it will result in a loss of 10%-20%, which is much more difficult to recover, and the distance to zero is much closer. 0.5%-2% of losses is too little and difficult to control? That means your principal is too small, please go accumulate your principal first. 2. First survive, then profit Trading costs are the biggest enemy of short-term trading. Taking stocks as an example, the trading cost is 0.4% each time. Simply calculated, after about 125 trades, approximately 50% of the capital will be lost. If you can make money, you can make more with less capital than long-term. But please survive first, break even on trading costs, and then talk! No one will use expensive trading tools for short-term. If you can't even beat the transaction cost, there's no need to consider the short-term approach. 3. Understand what money you are making An interesting point is that some people use certain investment methods, but cannot explain the reasons behind them. Some people buy in when they see moving averages and golden crosses, but when asked why and how they can make money, they cannot explain. This is especially serious in short-term trading, because if you are not clear about the reasons for making money, you will not know the reasons for losing money either. 4. If it doesn't work, give up, don't waste precious time I completely give up intraday trading. Intraday trading, for me, has neither the time nor the technical conditions for success. Choose the battlefield where you have the advantage or where others do not, instead of trying to turn the tables in a place where you have no advantage. Even if you succeed, it will only be a temporary victory, not a wise long-term decision.
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Only those who recognize their own strength have the capital for short-term trading!
Short-term trading is more of a cultivation than a technique. Only when the personality type, inner cultivation, and external techniques are fully matched can you be led to success and maintain a stable success.
4 principles of short-term trading
1. Control the amount of capital invested each time and limit the single loss
In general trading books, it is recommended to control the maximum loss on a single short-term trade to below 0.5%-2% of the total capital. The larger the capital scale, the lower the percentage of single losses should be. Less than 0.5% is an ideal situation.
Don't underestimate 0.5%, for example, 5-10 transactions can be generated within a week or two. If each transaction happens to lose 0.5%, then it would be a loss of 2.5%-5% in a week.
If a single loss becomes 2%, it will result in a loss of 10%-20%, which is much more difficult to recover, and the distance to zero is much closer.
0.5%-2% of losses is too little and difficult to control? That means your principal is too small, please go accumulate your principal first.
2. First survive, then profit
Trading costs are the biggest enemy of short-term trading. Taking stocks as an example, the trading cost is 0.4% each time. Simply calculated, after about 125 trades, approximately 50% of the capital will be lost.
If you can make money, you can make more with less capital than long-term. But please survive first, break even on trading costs, and then talk!
No one will use expensive trading tools for short-term.
If you can't even beat the transaction cost, there's no need to consider the short-term approach.
3. Understand what money you are making
An interesting point is that some people use certain investment methods, but cannot explain the reasons behind them.
Some people buy in when they see moving averages and golden crosses, but when asked why and how they can make money, they cannot explain.
This is especially serious in short-term trading, because if you are not clear about the reasons for making money, you will not know the reasons for losing money either.
4. If it doesn't work, give up, don't waste precious time
I completely give up intraday trading. Intraday trading, for me, has neither the time nor the technical conditions for success.
Choose the battlefield where you have the advantage or where others do not, instead of trying to turn the tables in a place where you have no advantage. Even if you succeed, it will only be a temporary victory, not a wise long-term decision.