Choice analysis of short-term trading and long-term trading

There are two main ways to make profits: one is to hold a small position to capture a large price fluctuation, and the other is to hold a large position to strive for a small fluctuation. So, what is a long-term trade and what is a short-term trade? In the field of financial speculation, we usually call a trade that opens a position on the same day and positions squaring within the day a short-term trade, while a trade with a position cycle of more than one trading day is classified as a long-term trade. Looking at the investor group can find:The number of investors who prefer short-term trading often far exceeds those who engage in long-term trading; however, among successful investors, the proportion of long-term investors is significantly higher than that of short-term investors.This is an interesting phenomenon. Why do most investors give up relatively robust methods in favor of more difficult ones?

After further investigation, it will be found that an important factor that short-term traders pay attention to is the frequency of trading opportunities. The number of short-term opportunities is usually much higher than that of long-term opportunities, which isforeign exchange marketFrom the perspective of capital utilization, short-term trading can mobilize funds more fully and maximize the efficiency of capital use. But is more opportunity the same as more profit? This is a question that short-term traders need to seriously reflect on.

Relatively speaking, long-term traders pay more attention to the sustainability of profits than the number of opportunities. The fundamental goal of investing is to make profits. Through long-term operations, although some trading opportunities are given up, the control of profits is more stable. Lao Tzu once said: "If you don't stand up, you can't cross it." Short-term experts who operate flexibly in the whirlpool of opportunities may sometimes be too intoxicated with their agile performance and exquisite skills, but ignore the essential thinking of profit and the pursuit of long-term stable profits.

From the perspective of investor quality, the difference between the two is reflected in the different requirements for psychological endurance.For short-term trading, the whole process of trading is within their own control, which can be monitored, regulated, and the effect is direct and clear. The time to bear psychological pressure is short, and once they cannot bear it, they can position squaring. For long-term trading, traders cannot monitor the whole process of holding positions in real time, and need to face unpredictable and uncontrollable uncertain states for a long time, which means that they may bear more lasting psychological pressure. From this perspective, investors with strong psychological endurance may be more suitable for long-term, while those with weaker psychological endurance may be more inclined to short-term. However, frequent operations in a short period of time also place higher requirements on psychological quality, while long-term trading does not have such continuous pressure. From this, it can be seen that psychological endurance is not a decisive factor in choosing long-term or short-term transactions. The final choice depends on an individual's psychological structure.

From the perspective of investors' psychological expectations of profits, short-term traders tend to have higher expectations for short-term profits than long-term traders. Driven by the psychological pursuit of short-term high profits, it is natural to tend to increase trading opportunities and operation frequency. Long-term traders, on the other hand, value the stability of profits more. This is actually another interpretation of the tortoise and hare story in the trading market. One of the secrets to successful speculation is to use the compound interest effect, and whether compound interest can work depends on the stability of profits. If the pursuit of short-term high profits is compared to participating in an F1 car race, and the pursuit of long-term stable profits is compared to driving a battery car in your own garden, it is obvious who is more likely to achieve the goal. Among ordinary investors, how many people are suitable for F1 racing, and how many people are more suitable for driving a battery car? Thinking about this question helps us to position ourselves more clearly.

Lao Tzu said: "The road is very barren, but the people are good at the road." The meaning of this sentence is that the road is smooth and easy to walk, but people prefer the rough path. In the choice of investment road, long and short lines have their own characteristics. LikeTickmillThe diverse trading environment provided by such platforms also provides flexible options for investors of different styles. We hope that more and more people will choose a more stable trading path and continue to work hard to promote it.