Once upon a time, I kept asking myself, how can I achieve stable profits? The market is basically just two trends: oscillation and trending. The market movements are either up or down. So why do most people in the market end up losing money?

Later, I realized that the root cause of most retail traders' problems is their fear of profits and their fear of losses. Both are extremely extreme mental states!

Fear of profits leads to doing the right thing but not daring to hold the position and let the profits run, resulting in closing the position when it should be profitable. People fear uncertainty and worry about profit retracement, cutting off their opportunity for account profit multiplication.

And what about the fear of losses? It often comes from blindly believing in a trend after confirming it or from heavy positions that lead to wrong directions. Even when they could cut losses and exit the wrong trend to start over, they are unwilling to accept the reality of floating losses, admit their mistakes, hold onto luck, and blindly hold positions, hoping to recover profits through stubbornness! The result is that in a trending market, they get more and more trapped, eventually on the verge of liquidation, choosing to lock in positions.

There’s no avoiding getting wet shoes when standing by the river. Extreme market conditions always exist. Right and wrong are normal. The beginning of big losses often starts from unwillingness to accept losses. Over time, holding such mentality and operations, profits become smaller than losses. How can there be profits in the long run?

Therefore, maintaining a healthy position size and a stable mindset is the beginning of consistent trading profits. Only by cutting losses and letting profits run can the trading path be successful. If you lack this awareness or the ability to judge the market, then managing the risk-reward ratio, controlling a consistent position size, and strictly setting take-profit and stop-loss levels, using win rate to achieve stable profits is also a valid approach. The only concern is that if you know nothing, do the right thing to make profits and then run, chase tiny gains happily, and when losses occur, hold positions or add to floating losses, such operations will definitely not end well.