Not wanting to miss the opportunity to make a lot of money, yet not wanting to endure the pain of significant drawdowns, is something no strategy can achieve; it all comes down to luck. To make a lot of money, one must be prepared to withstand all drawdowns, regardless of their magnitude.

Drawdowns are the threshold to making big money; the greater the drawdowns you can handle, the larger the market movements you can capture.

When there is a floating profit, should you take the initiative to take profits? When floating profits retract, should you exit and wait and see?

Both questions come down to the same principle: if the drawdown you can bear is very small or non-existent, then you lose the possibility of further expanding your profits. If you can only withstand a minor drawdown, what you gain in return is a smaller future profit. It is a choice that requires trade-offs.

When there is a floating profit, is it necessary to reduce positions when profits reach a certain level?

Reducing positions can indeed prevent larger drawdowns in the future, but similarly, you still have to sacrifice your future profits.

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While controlling drawdowns, the expectation of future profits will also decrease. The best approach is to choose between the drawdowns and profits you can accept, then make a firm decision and stick to it; this is the best decision.

Reality is never as beautiful as it appears on the surface, and the truth of trading is that it is real, cold, cruel, and naked. The ability to withstand drawdowns and make profits has always been a package deal; the greater your capacity to handle drawdowns, the greater your ability to achieve substantial profits. Do not always live in the illusion of high profits without drawdowns.

What I want to tell you is: in trading, the more trades you make, the smaller the trading scale, and the less you can withstand drawdowns, the more fragile your system becomes, and the harder it is to succeed. Pushing to break even after a few points of floating profit is a level of difficulty akin to hell because the scale is too small, the high cost of fees, and the disorderly trends in short cycles will put a lot of pressure on your system.

Smooth trends are not common; most of the time, it's three steps forward and two steps back, and often the initial fluctuations and drawdowns are more severe, shaking out the less committed trend traders.So if you wish to pursue a strategy where you cannot incur losses after making a profit, and you want to secure your gains or break even as soon as you make a little profit, this could actually lead to greater losses. Therefore, letting go of the obsession with this idea can bring you many benefits.

Establishing rules is not difficult in itself; the challenge lies in making choices and executing them.

Traders must overcome their own greed and not pursue perfection, as every profit-taking rule has its drawbacks.

A market trend might rise by 100 points and then fall back, or it could rise by 200 points before retreating, or it might start to decline after just a few points of increase.

The variations in market trends are infinite, and no matter how you design your trading rules, there will always come a time when you will give back all your profits, and that's when many people start to interfere with their profit-taking rules.

In reality, the power of rules lies in their execution, not in constant changes, because market trends are uncertain, and no matter how you change them, perfection is unattainable.

So you should first determine what level of market trend you want to capture, and then establish your exit rules based on that. As long as these exit rules are not triggered, even if the profits from the process are completely given back, that is also a part of your trading system, and you should accept it.

For example, if you aim to capture large daily market trends of several hundred points, then the intraday fluctuations of a few dozen points are irrelevant to you.

Profit and loss come from the same source; you can only capture large market trends if you are willing to accept significant profit drawdowns. If you can only tolerate small profit drawdowns, then you are destined to only capture small market trends.

If you find this helpful, please give a like. Many things, many principles, can be understood with experience in trading, but society is a race to see who understands them first. Early understanding leads to a different destiny than late understanding.