Why is it so difficult to stop loss in trading? I often hear people say that after a margin call,

The reason is that I made a wrong judgment! This reason is not accurate, because the market is uncertain and you can never make the right judgment! In fact, the fundamental reason for the liquidation is not setting a stop loss. It is also possible that you have set a stop loss several times and found that it was in vain. Next time, you simply don’t set it. As a result, you find that most of the time you can carry the order back, so you are more convinced that carrying the order is right!

But there will always be a time when you can’t make it back. You may make it back 9 times, but it only takes 1 time to go back to zero. This means that in your investment career, if your capital suffers a large proportion of loss, it will be difficult to make it back in the future, let alone make money!

This is also the purpose of setting stop-loss, which is to ensure the principal, prevent excessive losses in a single trade, and avoid difficulties in recovery later. Why is setting a stop-loss the most difficult?

The reasons are as follows:

First, Greed and Fear: Trading is counterintuitive.

Greed and fear are the two major emotional obstacles faced by traders. Greed often leads traders to wish for greater profits, unwilling to admit mistakes and stop losses. Fear causes traders to be afraid of incurring larger losses, often delaying the decision to stop losses.

Second, the difficulty of psychological acceptance:

Stop-loss means we admit that our judgment has gone wrong and are willing to bear a certain loss. For many people, this is a difficult fact to accept. It’s like having a foot bitten by a crocodile; many know they need to escape but are reluctant to chop off the bitten foot! Knowing when to correct a mistake in time is a skill that a mature trader must possess!

Third, Lack of Stop-Loss Strategy:

The most important point is that many people lack a clear stop-loss strategy in trading. They do not set specific stop-loss levels,

There are also no clear stop-loss rules. This leads to hesitation in the face of losses, making it difficult to decisively stop losses. How to overcome the stop-loss dilemma?

So, how can we overcome the challenge of stop-loss in trading? Here are some coping strategies:

First, Plan a Stop-Loss Strategy: It is crucial to establish a clear stop-loss strategy before each trade.

Set stop-loss levels, determine a reasonable stop-loss range based on personal risk tolerance and market volatility. It can help us exit in a timely manner when market conditions reverse, protecting our funds.

Second, Discipline Execution: Trading discipline is very important for stop-loss.

Once a stop-loss level is set, we should always adhere to it, and not violate the stop-loss rules due to greed or fear. Establishing good trading discipline can help us overcome psychological barriers.

Third, Use Stop-Loss Tools: Trading platforms usually provide stop-loss tools,

Such as stop-loss orders or trailing stop-loss orders. These tools can help us automatically execute stop-loss operations, reducing the impact of subjective interference.

Fourth, Continuous Learning and Adjustment:

Trading is a process of continuous learning and adjustment. By learning about market trends, technical analysis, and risk management,

We can improve our trading skills and decision-making levels. At the same time, based on actual trading experience, continuously adjust and improve our stop-loss strategies and execution methods.