Traders holding $RIVER or $SOL, have you ever experienced this — you spot a sure-win opportunity, but fear of volatility makes you cut the position, and then it surges. You're heartbroken watching the profits slip away. Conversely, when losses occur, you can't bear to admit defeat, dragging it on until total loss.
Why does this happen? The fatal flaw for many beginners is over-focusing on the win/loss of individual trades. Staring at candlestick charts, hurting at every small loss, wanting to exit at every small gain. This approach inevitably results in your account being gradually eroded without even realizing it.
But what truly determines your survival isn't whether a single trade makes or loses — it's your overall risk-reward ratio.
So the solution is simple: before every order, force yourself to ask three questions. If wrong, how much at most do I lose? If right, how much at most do I gain? Does the risk-reward ratio exceed 1? If the ratio isn't attractive enough, no matter how tempting the market is, you must hold back.
Of course, this ratio varies in different market conditions. In clearer bullish trends, you can pursue more aggressive 2:1 or even 3:1 ratios, but in choppy markets, you should be more conservative — 1:1 or 1.5:1 is sufficient. My personal preference is 1.5:1 — neither overly conservative nor too aggressive, and most aligned with human nature and easiest to execute.
The key is shifting your mindset. Professional traders never look at how much a single trade can make, but rather the long-term expected value of their entire system. As long as your trading system has positive expectancy, a few short-term losses can't shake the bigger picture.
Remove your mind from the gains and losses of individual trades and focus on long-term planning. Only then can you truly walk more steadily and go further in the market.
Traders holding $RIVER or $SOL, have you ever experienced this — you spot a sure-win opportunity, but fear of volatility makes you cut the position, and then it surges. You're heartbroken watching the profits slip away. Conversely, when losses occur, you can't bear to admit defeat, dragging it on until total loss.
Why does this happen? The fatal flaw for many beginners is over-focusing on the win/loss of individual trades. Staring at candlestick charts, hurting at every small loss, wanting to exit at every small gain. This approach inevitably results in your account being gradually eroded without even realizing it.
But what truly determines your survival isn't whether a single trade makes or loses — it's your overall risk-reward ratio.
So the solution is simple: before every order, force yourself to ask three questions. If wrong, how much at most do I lose? If right, how much at most do I gain? Does the risk-reward ratio exceed 1? If the ratio isn't attractive enough, no matter how tempting the market is, you must hold back.
Of course, this ratio varies in different market conditions. In clearer bullish trends, you can pursue more aggressive 2:1 or even 3:1 ratios, but in choppy markets, you should be more conservative — 1:1 or 1.5:1 is sufficient. My personal preference is 1.5:1 — neither overly conservative nor too aggressive, and most aligned with human nature and easiest to execute.
The key is shifting your mindset. Professional traders never look at how much a single trade can make, but rather the long-term expected value of their entire system. As long as your trading system has positive expectancy, a few short-term losses can't shake the bigger picture.
Remove your mind from the gains and losses of individual trades and focus on long-term planning. Only then can you truly walk more steadily and go further in the market.