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#ETH The main reason most people lose money when opening positions is actually quite simple; 95% is due to the impact of market fluctuations on their mindset. The market is always unpredictable, rising and falling. Therefore, what you need to do is manage your position well, control your stop loss point, set your take profit point and your Get Liquidated point, 3.1 line. When you have determined a certain direction and are confident in a certain trend, at this point, you only need to pinpoint these three points, and then leave the rest to time. If you become worried due to fluctuations in the market in between, it will be very easy for you to lose money, because at this time you are most likely to increase the position or make hasty moves, build positions randomly, and shaky mindset risks; this is the biggest taboo.
"Mindset influences decisions, management relies on discipline"
Core issue: Emotions are hijacked by market fluctuations.

The root of losses often lies not in inaccurate technical analysis, but in the moment when price fluctuations reach your "psychological tolerance threshold," where emotions (fear, greed, and luck) take over trading decisions.

Solution: Replace subjective emotions with systematic discipline

The "3.1 Line" position management method I proposed is the key to building a trading system and resisting emotional interference. Let's specify it further:

1. Get Liquidated - The Bottom Line of Life

• Definition: This does not refer to the account being completely drained, but rather the maximum risk amount you are willing to take on a single trade. This is the most important bottom line.

• Function: Determine the maximum amount you can lose on this trade before building a position. For example, you should never allow a single loss to exceed 2% of your total capital. This ensures that even with consecutive stop losses, you still have capital remaining in the market.

2. stop loss point - wise exit

• Definition: When the price fluctuates in the opposite direction to a certain position, it proves that your current trading direction may be wrong, and you need to decisively exit the position.

• Purpose: Actively admit mistakes and use small, planned losses to avoid larger ones. The stop loss is not meant to make you money, but to keep you alive. This is a respect for the uncertainty of the market.

3. Take Profit Point - Reward for Discipline

• Definition: When the price reaches your preset profit target, actively close the position to secure profits.

• Function: Overcome "greed". Many people incur losses because after making money, they want to earn more and are unwilling to exit the market. As a result, the market reverses, and profits turn into losses. Taking profit can help you lock in profits and avoid missing the exit opportunity due to emotional fluctuations.
When the above three points are not strictly followed, the following will occur:

• Randomly increasing the position: Adding to a position against the trend due to the mentality of "taking a chance" or "averaging down" when in a loss, often results in amplifying the losses and may even lead to getting liquidated.

• Randomly Building Positions: Due to the fear of missing out on market movements or the eagerness to recover losses, frequently opening positions without clear signals and plans increases trading costs and risks.

• Hedging (Locking Position): In the face of fluctuating losses, instead of taking a stop loss, one opens a reverse position of equal amount to "lock" the losses. This seems to stop the losses, but in reality, it complicates the problem, ties up capital, and incurs transaction fees, often turning it into an "ostrich strategy."
Successful trading can be summed up as:
Before trading:

1. Plan your trades: Define entry points, stop loss points, take profit points.

2. Calculate your risk: Based on the stop loss point and position, ensure that the loss is within the "liquidation point" (maximum risk capital).

In trading:

3. Trade Your Plan: Once you place an order, execute it strictly according to your plan. The price fluctuations in between are irrelevant to you unless they reach your preset levels.

4. Isolate Emotions: Before the plan is triggered, avoiding looking at the market and making trades is an effective way to prevent emotional interference.

If you have seriously read my post and held yourself to a strict standard, then you have grasped the most essential truth in trading - coexisting with the unpredictability of the market and profiting by managing yourself and your funds, rather than trying to predict every fluctuation of the market.

This is a very mature trading cognition. By persisting and forming a mechanical execution habit, the probability of profit will greatly increase.