Central Source Line philosophy and closing rules
I know that trading is about acting with the future in mind, but human psychology binds us to current events rooted in the past.
What is the criterion for executing an exit without hesitation?
Zhongyuan-Line Position-Opening MethodThere is a single clear answer within this idea.
Zhongyuan LineWhat does exiting positions mean—its outline and the underlying trading philosophy.
On March 7 and 10, I explained why exits are difficult.
In many cases, you’ll end with, “Yeah, that’s right. That’s why it’s hard...”. But that does not make it practical. It cannot truly be called a method.
There are various ways of thinking, butZhongyuan Lineis considered as follows.
・Bad position… cut it, and open a position in the opposite direction
・Good position… maintain it until a change in trend is confirmed, and strive to maximize profit
When a trend change occurs—that is, the flow changes from rising to falling, or from falling to rising—one should act straightforwardly.
・Buy when it is judged to be turning upward
・If afterward it seems to be turning downward, do not hesitate to switch to selling
・If it turns upward again, switch to buying without regard to the past
By looking directly at price movements, which are the sole determinant of profit and loss and independent of the market itself, the method becomes highly practical.
As a result of “cutting bad positions,” there may be partial back-and-forth or indecisive movement that causes multiple stop-outs, but the three-part trading rule is designed to minimize those losses.
Because the idea of “maintaining good positions” is codified, one can reliably capture profits when price ranges occur.
Above all, the trader’s definitive answer is clear.
Rather than saying, “Hmm, what should I do…,” do not avert your eyes from personal responsibility, and with a forward-looking, decisive mindset, execute the next move boldly.
Now, let me write the Zhongyuan Line’s unique answer to the problem of exits being difficult.
Do not ignore bad positions. It’s your own matter.
Be mindful of certain retracements, and if retracements continue, first cut!
In exchange, leave good positions as they are. Small profit-taking is not a safe or trivial thing.
Take profits when you can──This is the way of thinking that makes the total positive after paying unavoidable losses (expenses).
■Stock Investment Tiger’s Den (Hayashi Investment Research Institute Channel)
On March 11 (Fri), the latest video has been uploaded.
Stock Investment Tiger’s Den
Stock Investment Tiger’s Den — Price Movements Do Not Persist ~ Trends Are Hypotheses
There are opinions that price movements are not continuous, denying the price chart itself. In fact, there is some valid reasoning to that. However, I am a chart proponent, or rather, consider it an essential tool.
■YouTube Channel Market Scramble
Tonight, the latest video from Market Scramble will also be released.
Please view at the URL below. Enjoy!
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