There are many people who talk about stop loss in this market. For example, some people can tell seven or eight methods of stop loss, such as psychological stop loss, price stop loss resistance, support level stop loss. System indicator stop loss fixed stop loss and so on. Each has its own advantages and methods. Of course, there are also many people who do not advocate stop loss. As long as there are funds and large positions that are well controlled, there should be no stop loss. Because the price will eventually move toward equilibrium. , the rest is just time. I don't discuss right and wrong here, I think there is really no right or wrong, thousands of people have a thousand waves and a thousand people lose a thousand. The stop loss I am talking about here is not to teach you how to stop loss, nor is it to discuss whether to stop loss. I just tell you a concept of stop loss that plays a key role in trading.
How do you feel about your stop loss? What kind of stop loss concept do you have. The trading mentality has played a series of roles in your series of trading behaviors. I think that some traders in the market will scold their mothers or feel very frustrated once they sweep the stop loss, because first, they lost money, and second, they made a wrong judgment on this order. Some traders even start to get emotional after sweeping the stop loss twice in a row, and the result is getting worse and worse, losing money continuously, and even withdrawing the stop loss until the position is liquidated. I just said that this group of people doesn't understand what stop loss is at all. They are just order porters in the market, without systematic strategic thinking at all?
So what is the correct concept of stop loss? I don't think you should take the stop loss as your loss, and the stop loss can't prove that you made a wrong judgment on this order. On the contrary, stop loss is a process of trial and error. Stop loss proves that your judgment is correct and reduces your loss. Treat stop loss as trial and error, the cost of trial and error is a necessary cost in trading, how can you prove yourself right if you try and make mistakes.
In order to clarify the matter of trial and error, let me tell you about winning three cards, which is the card game we play. I can say this, my friends are basically not willing to play fried gold flower with me, because I always win, not to say that I win every hand, I am talking about the entire complete game. Do you know how I do it? It’s actually very simple. When I have a bad card, I will run. The bottom money is my biggest cost and my stop loss. It’s nothing more than throwing a low money. But when I have a good hand, I bet in steps. Sometimes bets will also lose, but the probability of winning with a good hand is much higher. Do you believe that you don't have a good hand all night? To what extent does this probability have to be memorized? The same is true for the stop loss of the transaction. Usually, the stop loss should be regarded as a trial and error. Only with a trial and error mentality can you correctly view your stop loss and your transaction correctly, and it will also allow you to gradually form a The single thinking of wave market.
For example, I want to see a wave of rising prices for the British pound. I think the British pound has reached a low level. I can place an order. I first placed a stop loss order of 100 pips on the bottom position. As a result, the market did not rise, and my stop loss was swept away. I will not feel frustrated. This order is just a trial and error with my 2 funds, because I firmly believe that this industry is a game of probability. I am not a master, and my judgment may be wrong. If I lose money, I will wait. I think it has stabilized. I am taking part of the funds to try and make mistakes. Maybe this order will rise. I will take advantage of the trend to increase my position. After a wave, it may be 10%. The profit-loss ratio of 1:3 and 1:5 came out, how worthwhile the trial and error is.
Let me give you a little more detail. For example, you have 1,000 US dollars in funds, and you want to make a wave of European and American orders. Your profit-loss ratio is 1:2, and you want to try and make mistakes ten times, that is, if you lose $100 and earn $200 each time. Then the statistics form came out.
If you stop loss 10 times out of 10, your account will blow up, and if you make a profit once out of 10 times and lose 9 times, then you still have 300 in your account. If you win 10 times, lose 2 times and lose 8 times, you will have 600 left in your account. If you win 3 times and lose 7 times, your account will have 900 and lose 100. If you win four times and lose six times, your account will earn 200. If you win five times, your account will earn 500. If you win 6 times and lose 4 times, the account will earn 800.
Have you seen the miraculous effect? Even if your winning rate is only 40%, you are still making money. Why dare not try and make mistakes, and why stop loss is painful. I think the reason for the pain is a problem of vision. The thinking is too narrow, and I only see the order in front of me, but I don’t know the whole transaction well. This is the harm of not having layout thinking. It makes people just look at it alone, it’s no wonder that the stop loss is not painful, and it’s no wonder that if the stop loss is not admitted, it’s no wonder that you don’t make orders indiscriminately. Here, the layout of a wave of market is best done according to a variety. Because I saw that some traders can take positions in several varieties at the same time, I think this is not a master, because there is no layout at all. Then stop loss is not trial and error, it is to die with the market.
Just like fighting a war, attack this hill, run away after killing a few enemies, attack that hill. A few comrades were killed, and after a long period of time, it was found that no mountain was captured, and it turned out that the bullets were almost used. The loss outweighs the gain. Think about it, everyone. Studying the setting of stop loss positions is technically important, but the concept of stop loss through trial and error is the highest level of stop loss. Divide your funds into several shares to lose money, and integrate the concept of stop loss trial and error into your trading will definitely bring you unexpected results.
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