About being trapped - Cryptocurrency digital asset exchange platform

Being trapped is a common issue encountered in trading,

Everyone who trades will face being trapped,

The problem of being trapped itself doesn’t have a big impact on trading,

It’s like a black swan,

Everyone will encounter it,

The key is how you handle this situation when it happens. Some friends often ask what to do when trapped,

Today, I will share my approach in a dedicated column.

1,

Attitude: Accept reality,

This is a very normal thing,

Once trapped, don’t let emotions take over,

Lose rationality,

Handle it objectively and calmly.

2,

Based on your trading system rules, see if the loss is within your acceptable range,

If it is, hold on,

If it exceeds, cut losses immediately.

Follow the rules completely.

3,

Carefully analyze the cause of this trapping. (1) If it was due to a sudden market reversal that you couldn’t react to in time, leading to no timely stop-loss,

Then you must improve this aspect,

For example, set automatic stop-loss orders in advance.

(2) If it was caused by subjective guesswork leading to adding positions against the trend,

Buying more as it falls,

Then you need to find ways to overcome the problem of subjective guesswork.

(3) If it was caused by chasing highs,

You should establish rules to prevent chasing highs.

4,

Set rules: (1) Establish rules for adding positions: do not add to losing trades,

First ensure you won’t be heavily trapped.

(2) Establish trial-and-error rules,

Each time you open a position, the first attempt must be with a small position for testing.

5,

The most serious problem is repetitive trapping.

Persistent bad habits should prompt you to check whether you are suitable for trading.

Reminder: The best way to solve problems is: prevent them from happening,

Address issues in their early stages,

Once trapped, it’s hard to resolve,

We must learn to use rules to limit the occurrence of trapping problems.

Just like traffic accidents, no one wants them to happen,

The consequences are serious once they occur,

But if you strictly follow traffic rules, the likelihood of an accident is very small.

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