"Profit-taking is the height of folly, while stop-loss reversal is the god of fortune" (The Philosophy of the Market by Shigeru Kaburagi)

“Taking profits too early is stupidity; cutting losses too late is a blessing.”

―― Shigemitsu Kabuto, The Philosophy of the Market

This saying is a bit shocking, isn’t it?

But when you’re trading, it oddly resonates.

To chase after profit right after it appears and bet on a reversal with “it should turn here!” is

a complete underestimation of the market.

Where the confidence to catch the bottom or top comes from? Perhaps greed (laughs).

On the other hand, a reversal after taking a loss

signifies that you believed the loss-cutting line was solid

and once it’s broken you decide to ride the momentum,

showing straightforwardness and a quick switch.

Loss-cutting → reversal, I do this occasionally, but in a revenge-trade mindset

I tend to misjudge decisions, which makes me admonish myself.

After all, the basics are to cool your head when a loss is cut!! (laughs)

Well then, until next time.