Tips for setting stop-loss orders

In fact, the function of stop-loss orders is to protect investors from making mistakes in decision-making and reduce losses. We often say that an accident can be fatal, but if you can use stop-loss orders carefully, you can avoid danger and avoid danger.

For example, the stock market crash caused many people to go bankrupt. If you carefully analyze the trend at that time, and place a stop-loss order to automatically stop the loss and leave the market before the market reverses, you can safely survive an unprecedented disaster. Then the skill of placing a stop-loss order is how to place the stop-loss order in a place that confirms that the market trend will reverse, so that it can play a real role.

For ordinary speculators, the use of stop-loss orders usually has three types of problems.

First, he thought he was a victorious general and disdained to place a stop-loss order.

Second, there is a stop loss in mind and no stop loss in hand.

Third, feel free to use an amount as a stop loss order.

For the first type of speculators, the market will punish them sooner or later, and there is no need to discuss it. Of course, it is absolutely impossible to follow suit.

The second type of heart has a stop-loss disc, the cause is afraid of unprovoked stop-loss leaving the market, to leave the market before deciding whether to cut the warehouse, but the weakness of human nature is often unwilling to admit defeat, and temporary hesitation, so the consequence of not setting up a stop-loss disc in advance is usually the stop-loss disc will fall lower and lower into a big mistake, until the time is too much to be forced to position squaring.

As for the third type of people, arbitrarily using a certain amount as a stop-loss order is really asking for trouble. For example, if you sell short gold, you are willing to bear a loss of one thousand dollars, and you want to make a third-hand contract, so you set a stop-loss order at each contract point in the US dollar. The most common situation is that the market trend hits your stop-loss order before the price of gold continues to fall, and you have the right investment direction because of the wrong strategy. Stop-loss exit, the correct approach is to use chart analysis as the basis for placing stop-loss orders. Place stop-loss orders where the market trend will reverse. This has two advantages. The first is to break into the stop-loss order, which represents the market trend reversal. Stop-loss exit is the correct investment attitude. The second is not to break into the stop-loss order. It means that the general trend is still developing as expected, and the handicap held in hand can continue to ride the ride and enjoy the fun of winning money to the fullest.

As for how to choose the appropriate price to place a stop loss order, it depends on the analysis system you use, such as wave theory, pattern analysis, averaging, or computerized analysis systems, which all have different calculation methods.

Overall, we believe the following points are worth observing:

First, you must set a stop-loss order before entering the market, and then you can observe the development of the market with peace of mind.

Second, after setting a stop-loss order, do not cancel it at will, or reverse the stop-loss order in the event of a loss.

Third, pay attention to the principle of using "all places and no enterprises". If most people place their stop-loss orders in the same position, stay away from some important price points to avoid sweeping them all.

Fourth, when entering the market in the correct direction, you can gradually adjust the stop-loss price of the original stop-loss order to follow the development of the market trend to ensure that you have vested interests while making as much profit as possible. At this time, the adjusted stop-loss order can be called a profit-making order. For example, after the gold price falls, you can gradually reduce the stop-loss order to ensure that you remember profits and make as much money as possible.