In trading, what really kills retail investors isn't the direction, but their position size.
Many people think they're losing money because they "judged the wrong direction."
They watch the market, draw lines, and study indicators day in and day out, only to discover after a while that even if they got the direction right, their accounts still lose money.
Why? Because they don't understand position size at all.
Two common pitfalls for retail investors:
First, they're afraid to take advantage of the trend.
Even when the market is clearly rising, they rush out after finally making a small profit, ultimately losing their profits like a drop in the bucket.
By the time the true uptrend arrives, they've already been wiped out, leaving them helpless on the sidelines.
Second, they stubbornly hold onto positions against the trend.
They don't set stop-loss orders when the market falls, but instead add to their positions, buying the dip while losing money, ultimately leaving them with a sense of dread.
In fact, the biggest difference between expert and retail investors lies in their position size.
Once retail investors have heavily invested, their minds become completely distorted; experts maintain a relaxed position, and see fluctuations as opportunities.
Falling? There's still room for improvement.
Rising? They're already making money.
No matter which way they go, they can stay in their comfort zone.
To put it bluntly, position management isn't about making more money, but about ensuring you survive long enough and avoid being eliminated before the market offers you a chance.
As long as you survive long enough, big gains will eventually arrive.
So stop constantly wondering "Is the direction right?" and learn how to survive first.
Once you truly understand position management, your account curve will no longer be a straight line downward.
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