Doing speculative trading sometimes like playing cards. When you are lucky, you seem to be will making money forever, but when you are not in the right position, you feel that your account will never be positive again. Of course, playing cards just for fun is entirely a cause of luck. There is no way to reverse it, and market trading are different. You are fully capable of changing this passive situation through your own efforts.
For example, if the stop loss action is executed once or very few times in a long period, we can call it a normal situation. However, when you find that you have stopped loss too often in a short period, and you continue to lost money, you should treat it with caution. There must be something wrong in your system. If you can find the problem in time, you should say that you can reverse the unfavorable situation quickly by adjusting the strategies. Let me show you some situations and corresponding solutions that we often encounter that can make us lose money continuously.
The mainstream trend is wrong, doing the contrarian trading.
This situation is the most terrible of all, but it is also the easiest to solve. This situation often occurs in the situation that the fierce mainstream trend has lunched, but you haven’t jump it yet, and you worry about the duration of this trend and not dare to follow the trend, so you continue to trading the rebound in the downtrend or the callback in the uptrend. You start to get angry, look for the top and bottom in the fierce trend. Because it is wrong from the beginning, the trend has been running for a period of time after the you executed the stop loss, your psychological mood become imbalanced, always feel that the trend should be adjusted or rebound, so there is no courage to trade along the trend, the contrarian trading is naturally a continuous loss.
When dealing with this situation, don’t throw the stop-loss concept away. Your account won’t bust if you stop the loss, but if you resist the trend, you will. Once the trend finally accelerates, it will force you to close the position on the highest or the lowest price. After this situation happens, you must calmly judge the trend and re-evaluate the large form of the trend. Look at the big picture from the weekly trend.
It is necessary to combine the form with the big and small time cycle to see how much space there should be in the next cycle of time according to the current trend rising or falling rate, and whether the large wave form supports it to run there, and whether there is Important support or pressure exists. Your judgement of the goal will get the price position, your trading system will give up the idea of eating callbacks and rebounds, patience and other callbacks or rebounds into the game. At this time, it is necessary to use waves theory to judge whether the position at the current position will be greatly adjusted.
If it doesn’t, then all the adjustments may be minor corrections. The trading operation should be buying in call back or selling in rebound, but the amount of position will be controlled. Because you have not achieved the starting point of the trend, in the halfway up to jump in. It is necessary to control your position, because after you follow up, there may be a major adjustment in the trend. Therefore, you need be prepared for close your position no matter on any price and time. In fact, this trading operation won’t gain much profits, but the profit gained through this operation, can let you restore the confidence of the trading, the second can help you avoid when the trend haven’t finish, and you keep doing the reverse trading operation. When the market really comes to the adjustment, your rhythm will be just right, then you can follow the original analysis step by step.
In the big box, chasing up and down, going back and forth
This situation often occurs after the end of a larger trend, such as a big uptrend has come to an end, but no one knows beforehand that it may have a long-term seesawed, just after the shallow trend of the callback, you chase the price immediately. As a result, it will reach your stop loss as soon as it is turned back. Same will happen in the opposite way, when you shorting the price. It will be fine when this just happen once or twice, but in a large scale of seesawed period often lasts a few mouths in a row, because at this time the trend is bullish like a callback, and the bearishness is like a big top, so no one can have a firm opinion on the market outlook and no confidence in the trend. It will cause chasing and falling like a housefly without heads and will suffer losses from back and forth.
After this situation occurs, you should pay attention to your recognition of the market. It is different from the unilateral trend. Because the unilateral trend market is very aggressive, you know how to go in your own way, but you don’t have the courage to follow up and lose money. In the wide shock zone, the loss is exactly the opposite. It is the money that you always worry about missing the big trend and following the trend. If you continue to lose money after the continuous loss, do not immediately think that you can switch the trading method backward.
To trade according to the whole trend, because when you find that it is a shock consolidation belt, the consolidation belt will not last for a long time, and there will be no cheaper price for you to pick it up. At this time, you should calmly judge whether the market trend is doing a large-scale of relay form. If it is found that it is a large-scale relay form, it is necessary to judge its internal trend structure in the form of relay, and at the same time, it is possible to estimate how long the market may be consolidating according to the large-scale period.
And if the confirmation is a relay form, then the direction of your trading operation is set to only do this direction only, that is, to trade according to the original trend direction. If it is the rising trend, then you only buy it on the low position, maybe there is no breakthrough at all. You didn’t get a lot of profit, but in the end, after breaking it, your position must be at the right direction. then you can hold it for a long period with confidence.
The way to deal with this situation is different from the unilateral trend. When the unilateral trend is found to be wrong. you will find an opportunity to enter again immediately, because the trend power will adjust. The best trading operation after the continuous loss of the seesawed trend is to stop. Slow down, study the market carefully, and wait for the right point of intervention.
Upswing and downswings, lose money in every move.
There is such a situation in the market trend that often occurs, that is, the trend of seesawed. The oscillating trend is different from the consolidation belt. When the consolidation is carried out, it can be predicted in advance. There is a phrase in the old saying. After a fierce trend, there is often a sideways relay pattern. It is emphasized here that it must be after a sharp trend that there may be a sideways trend, that is to say, all relay patterns, regardless of size, appear after a sharp unilateral trend, and those that fluctuate or fluctuate downwards. There is no relay pattern behind. However, the seesawed trend itself has no signs beforehand, so no one will predict in advance when the seesawed trend occurs.
All the turbulent trends. If you jump in and trade, whether it is rising or falling, the ending is the same, because at the beginning of the oscillating trend, everyone will treat them as rebounds or callbacks, even if they trade the right direction, and set a reasonable stop loss and a take profit. the result is often that even if you are right about the trend, you just lose or win randomly.
How do you treat continuous losses after this happens? After we see that the trend is a seesawed trend, we must carefully analyze whether its trend has the possibility of evolving from a seesawed trend to an acceleration trend, like a general trend, if it is a seesawed trend from a big bottom or a big top. It may turn into a turning trend and finally accelerate. If there is a turbulent trend in a larger level of oscillation, then it is necessary to analyze its future direction from the larger form itself, and see if it goes out of the circle. The arc of the trend, the upper part of the oscillating downtrend or the downward arc of the oscillating upward trend, indicates that it has to be accelerated, and the wrong position should leave immediately. If it is judged that this oscillating trend is just a correction method to the original mainstream trend, then the operation should still choose to operate in the opposite direction of the oscillating trend, just pay attention to the period of the trend running and the space it may have to run. To deal with this trend, don’t try to chase it because it repeatedly tortures you to lose money, because the general situation is turbulent - unilateral, unilateral - seesawed, always alternately running, once you go to chase the trend, then It is possible to cause your more loss.
The situation of continuous losses is different, and the method of solving is different, but one thing is the same, that is, don’t destroy your mindset at any time. We can lose money, but we can’t lose the faith. Once the psychological defense line is disrupted, then there is no countermeasure for you. The result is that you are trapped in a quagmire and you are struggling to lose more. How can we not make the psychological defense line break down, the premise is that the fund management is strictly controlled in any trading operation, because as long as the fund management is good, the continuous loss will make you have a lot of losses, but it will not affect your combat will. And the fiasco of a heavy position, it may not let you stand up again for a long time.