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In the financial markets, there are often some self-proclaimed trading experts who offer advice, believing that as long as a good position is chosen and the stop loss is set at the entry point when the price moves in a favorable direction, it can guarantee a risk-free profit. However, this seemingly conservative strategy may actually do more harm than good.
Market prices often fluctuate around certain key levels, especially near important price points in long-term analysis. In these areas, the forces of buyers and sellers often engage in fierce competition. If traders have confidence in their analytical abilities, it may be wiser to give the price more room to fluctuate.
In fact, overly pursuing a 'guaranteed profit' and exiting too early may cause traders to miss out on potential major trends, which is undoubtedly one of the most frustrating experiences in trading. Successful trading requires not only accurate entry but also the patience and courage to hold a position, waiting for the market to fully reveal its trend.
Therefore, a wise approach is to maintain a certain level of flexibility when setting a stop loss, allowing the market enough breathing room, rather than mechanically placing the stop loss at the get on board point. This not only helps avoid being forced to close a position due to short-term fluctuations but also creates conditions for capturing larger market opportunities. Of course, this requires traders to have an in-depth understanding of the market and the ability to manage risks effectively.
Overall, a successful trading strategy should strike a balance between risk management and profit maximization. Being overly conservative may limit returns, while a moderate risk appetite can lead to greater rewards.