Correctly understand the stop loss methods of stock trading

Market uncertainty and price volatility determine that stop loss is often wrong. In fact, in every transaction, we are not sure whether we should stop the loss. If the stop loss is right, we may feel happy. If the stop loss is wrong, we will not only suffer the pain of reduced funds, but also a feeling of being fooled. The pain and psychological blow are the most unbearable pain for investors.

The concept of stop loss means that investors must understand the importance of stop loss in stock market investment from a strategic perspective, because in a high-risk stock market, one must first survive before further progress can be made, and the key role of stop loss is It is to enable investors to survive better. It can be said that stop loss is one of the most critical concepts in stock market investment. The stop-loss plan means that before an important investment decision is implemented, a plan on how to stop the loss must be made accordingly. The most important step in the stop-loss plan is based on various factors (such as important technical positions, or capital status, etc.) to determine the specific stop loss level. The stop-loss operation is the implementation of the stop-loss plan and is a step of great significance in stock market investment. If the stop-loss plan cannot be turned into a real stop-loss operation, the stop-loss will still be just a theory on paper.

Therefore, understanding stop loss is essentially how to correctly understand wrong stop loss. We should also accept wrong stop losses calmly. To give a simple example, if your stop losses are correct in trading, it means that every transaction of yours is correct, and if your transactions are all Correct, then why should we stop the loss? Therefore, stop loss is a cost, the cost of finding profit opportunities, and the price that must be paid to make profits in trading. This price can only be divided into big and small, and it is difficult to distinguish between right and wrong. If you want to make a profit, you must pay The price includes the price caused by wrong stop loss.

Stop loss means to close the position in time when the loss of a certain investment reaches a predetermined amount to avoid larger losses. The purpose is to limit losses to a smaller range when investment errors occur. An important difference between stock investment and gambling is that the former can limit losses within a certain range through stop loss, and at the same time maximize the rewards for success. In other words, stop loss makes it possible to gain greater benefits at a smaller cost. possible. The countless bloody facts in the stock market show that an accidental investment mistake can be fatal, but stop loss can help investors avoid danger.

Face the wrong stop loss calmly, do not avoid it, let alone fear it. Only in this way can you continue trading normally and finally make a profit. This is the author's understanding of stop loss, including the understanding of wrong stop loss.