What is a stop loss? 90% of retail investors won't!

It sounds simple, but retail investors cannot understand and execute it.

The awareness of stop loss is not about thinking this trend is wrong, but rather that the key level might have been chosen incorrectly, and we need to wait for the next key level to enter the market again.

Take our example from October when we bearish from 2700 all the way down, continuously stopping loss; many retail investors stupidly ask us, 'Did you get liquidated? Or are you stuck?' The article quoted below is our last stop loss (the time was November 10th).

Answer: Neither liquidation nor being stuck.

1. First, we targeted a bearish position at 2720 with a target of 1800. During the decline, we added some positions, and the average opening price was around 2680. Then at 2380, we didn’t take profit and continued to look bearish to 1800, but we were stopped out at 2750 (losing 70 points).

2. The second time was bearish at 2800, stopped out at 2860 (losing 60 points).

3. The third time was bearish at 3100; we informed everyone to exit at 3130, but since we heavily held the position, we bore 60 points ourselves. As everyone knows, (the actual stop loss again resulted in a loss of 30 points), we lost (90 points).

This wave of continuous bearish trend resulted in a total loss of (160 points), and our own holding of the position led to a loss of (220 points), which is why holding positions is a very foolish action.

Then we built short positions in batches at 3300, with an average price of 3380, then took profit near 3080. Everyone knows at 3100, we took 80% profit, and overall, Ethereum did not incur a loss.

Some retail investors might say, then why not go long and make money? Because we do not believe Ethereum will rise, so we will hold short regardless, at most just completely give up; after giving up on the stop loss, even if it rises by 10,000 points, it has nothing to do with positions, just that we did not make a profit. But this market is open 24 hours; what’s there to fear about missing opportunities? Even if you didn’t make a profit, as long as the loss is not big, you are still surpassing 90% of people.

The typical operation for retail investors is to hold positions while increasing losses, and then get completely liquidated after a 10% or 20% rise.

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