Closing positions is difficult (1)
In the world of the market, the long-standing difficult task has been,“closing out”.
You can only cut losses—yet it is painful to confirm a loss….
You want to maintain gains—yet, as the saying goes, “profit taking is a thousand-armed power”…
Closing out in trading is, above all, a source of worry.
Many people must be struggling while trying to devise a workaround.
First, let’s confirm the diagram that makes closing out feel difficult.
While you hold a position, future possibilities remain.
While you feel anxious about the possibility that things may go wrong, you are also confused by hopeful speculation that things might improve. That is the psychological state when you hesitate to close out.
Anyway, closing out creates a clear turning point.
In trading, unlike sports, there is no final whistle with time running out. There is no referee. You must settle it yourself.
Too free, you get lost.
For bad positions, you know they are “bad.”
“Then you have no choice but to cut them!” is what it means, but there is the pain of confirming a loss.
Good positions can yield profits no matter when you close, but there is anxiety that profits might reverse, and there is also the possibility that profits may continue to grow, so you are again unsure.
Ideally, taking profits is like, in effect, breaking up with your best-loved partner during the peak period before Christmas—psychologically, it is natural to resist.
If you think about closing out in isolation, the sense of hardship only grows stronger.
Perhaps it is better to view the act of buying and selling from a broader perspective.
Whether selling or buying, you act with a solid idea in mind.
However, if you think that “reversing the trade to cash out” means “returning to the original state” or “returning to a neutral position,” and that “there are further trades to come,” you may ease the fixation on a single closing-out moment and feel your thinking become lighter.
“Enter trade → close out”is one cycle, and you continue by repeating that again and again—that is trading.
Because money is involved, it’s natural to tighten up, but if you reconsider the decision of “whether to close out,” the same as a small day-to-day choice in life, such as “Should I have katsudon or tendon,” or “One more beer or a lemon sour,” you’ll find it is a similar kind of decision.
In the past, and in the future, you will face many similar decision points again….
―To be continued―
■Stock Investment [Tiger’s Den] (Hayashi Investment Research Institute Channel)
On Friday, March 4, we uploaded the latest video.
Stock Investment [Tiger’s Den]
Stock Investment [Tiger’s Den] The Ultimate of the Market is “Aggregation”
【Big Trader Buy/Sell Techniques Investment Methods Investment Techniques】
“Aggregation” is one of the techniques of increasing a position by buying or selling.
Even if you cannot implement the explanation immediately, it is easy to incorporate the elements of aggregation.
Please peek into the professional technique “Aggregation.”
■YouTube Channel Market Scramble
Tonight, the latest video for Market Scramble will be released as well.
Please view at the URL below. Enjoy!!
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