$KAI Capital Markets Cognition Series ---- Understanding Profit

We trade to make a profit. How exactly does trading profit come about?

1. Profit is a gift from the market, not something you earn. Therefore, when you make money, you should be grateful to the market and not be arrogant. So, you shouldn't set fixed profit targets because the market decides how much you earn—it's a bit like eating based on the weather.

2. Profit is a byproduct of controlling risk well. As long as risk is managed properly, the remaining profit is a natural outcome.

3. Two key factors: 1) Prevent profit drawdowns by setting dynamic take-profit levels in time to avoid profit retracement and rollercoaster markets; 2) Let profits run—maximize gains when you're right.

4. Always protect your profits, cherish the market’s gift, and don't casually give back profits that are easily earned.