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2024/10
Trading is Like Water: Understanding the Importance of Following the Trend
In the world of trading, each of us is like a dancer on the stage, and trading itself is like the unpredictable flow of water. Sometimes it surges with force, sometimes it is calm and quiet. It challenges our wisdom and courage with its unique rhythm.
01. Trading is Like Water: When It’s at a High, Know When to Retreat
When the market reaches a high point, it is crucial to avoid excessive greed and resist the temptation of buying at the top. During periods of market euphoria, when prices soar, it is vital to remain calm.
A mature trader is not overwhelmed by short-term profits or blindly follows the crowd into buying at the peak. We know that buying at a high often carries great risk, and if the market shifts, we may find ourselves trapped in difficult positions.
02. Trading is Like Water: When It’s at a Low, Take Action Swiftly
When the market is at a low, we should seize the rare opportunities with the force of rushing water. This requires sharp insight and decisive action.
While others hesitate, the bold trader moves in, buying valuable assets at low prices. Opportunities are fleeting, and those who are willing to act during the market’s low points are the ones who will reap rich rewards in the future.
03. Follow the Flow, Never Go Against It
Understanding the patterns of market trends is key to trading success. When we have a deep understanding of the market, we can better grasp the timing and rhythm of our trades. By following the market’s direction, rather than going against it, we can navigate the trading waters with ease.
If the market turns against us, we remain steadfast, never wavering. Challenges and setbacks in trading are inevitable. Market volatility and unfavorable conditions can sometimes put us in difficult situations. But we must stay true to our strategy and not be shaken by short-term difficulties, trusting that the market will eventually return to rationality.
04. Trading is Like Water: When It’s Hot, Engage Passionately but Stay Grounded
When the market heats up, it often means opportunities are increasing. This is the time to be fully engaged in trading and capitalize on those opportunities.
However, while being passionate, we must stay vigilant and avoid letting excitement lead to poor decisions.
05. Trading is Like Water: When It’s Cold, Stay Calm and Trade Sparingly
When the market cools down and becomes unclear, frequent trading can increase costs and risks. At these times, it’s best to remain patient and observe the market, waiting for the right moment to act again.
Conclusion
As Lao Tzu once said, “Man follows the Earth, Earth follows the Heavens, the Heavens follow the Tao, and the Tao follows nature.” Everything follows certain patterns, but we cannot rigidly adhere to these patterns.
Trading is like water—ever-changing yet full of endless wisdom. Only by being flexible and going with the flow can we dance gracefully in the world of trading. Let us take water as our guide, continually exploring and moving forward in the ocean of trading, writing our own chapters of success.
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