"Piggybacking" tactics and the fight against gaps
While speculating in the market, the trader can fall into prostration, which is very dangerous for his purse. This happens mainly in two cases.
The "pig" way of trading
Case One: the speculator entered the market very large lot. This method of trading is called "piggybacking". You can earn a large sum of money fairly quickly by this method, of course, you can lose just as much. Here is how it happens. The trader is looking for an entry point. When a suitable situation arises, he acts instantly. If the trader enters with an exorbitant lot, he is absolutely wrong. The chart moves very erratically in the short term. You can ask any professional trader about this, he will confirm it. It's easy to go pale with a big lot. Let's say you had a large amount in your account - $80,000. You "bought" in the market with a huge lot, for example - 80! Your money began to increase at first. 85,000, 90,000...but then the market turned around. 85,000 again, then 80,000, then 70,000. Suddenly you feel sick.
You realize that you can lose all your savings in a matter of minutes. Your face becomes pale as chalk. What to do? When you took this step, we did not advise you to do so. And this time it is too late to advise. The schedule can both destroy and multiply your money. "Piggybacking" tactics is not at all effective - in case you earn, you will soon lose all funds anyway. Don't speculate in huge volumes, and you won't have to go pale! Under no pretext, ever in life, under any circumstances do not be a "pig"! Only beginners do that. Be collected, sensible and thoughtful! Don't forget that "pigs" are slaughtered in the marketplace.
Fighting gaps
Case Two: The speculator ran into a price gap. Gaps are common in the grain market, other commodity markets, and the stock market. Very dangerous are the stocks of companies. No one knows what goes on behind the scenes of beautiful company buildings. The stock of a world-famous company was slowly going up. Suddenly, one day, the stock market opened down, a stock that was worth $61 suddenly opened at $53. For many speculators, this can be an extraordinary occurrence. A trader might immediately go pale.
What can be done to prevent this from happening? First: you have to diversify. Don't bet everything on one or two stocks. Trade a lot of instruments. Let your portfolio have, for example, stocks, soybeans, silver and gas. Those commodities that will go up, you will buy more as they go up. And for those that go down, you will reduce their volumes.
It's not complicated! But traders will continue to pale. Why? For the reason that they get carried away!