A large number of traders have shallow or wrong understanding of stop loss. It is not clear what stop loss is, nor the purpose and method of stop loss.
1. What is stop loss? How to treat?
Stop loss is a failure to make the loss of account funds a reality. The action of stop loss is to determine the uncertain failure as a failure, so that the total amount of funds in the account will be reduced, and the risk tolerance will be reduced.
Stop loss is the enemy of trading, and we should establish the awareness that stop loss is ashamed.
2. Why stop loss?
Stop loss is not to cut losses.
There is only one purpose of stop loss at any time, which is to maintain a healthy risk tolerance in the account.
The stop loss has nothing to do with the floating loss of the order, but with the possible risks of the account.
3. How to stop loss?
I believe everyone has seen fixed value stop loss and key position stop loss . These are reasonable, but they are not the core of stop loss.
The core is whether this order needs to stop loss.
If the order needs to stop loss, the stop loss should be small rather than large .
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Last updated: 09/05/2023 16:22
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