Why is it so important to set stop-loss and stop-profit? [Developing a healthy trading habit]
The necessity of stop-loss is reflected in: Imagine that if a major event suddenly occurs in the market, such as an unexpected interest rate hike in the United States, and you are in a dream due to jet lag, the loss is as high as 50% before you react. At this time, the pre-set stop-loss mechanism is like your guardian angel, automatically limiting losses and avoiding catastrophic consequences.
As for stop-profit, it is like a careful housekeeper, silently paying attention to market dynamics while you rest. When the market fluctuates and occasionally appears in a short-term pull-up that is beneficial to you, and hits your preset stop-profit point, it will lock in profits in time to ensure that you not only withdraw safely, but also return with a small victory.
The core purpose of setting stop-profit and stop-loss is to firmly lock the trading risk within an acceptable range, so that no matter how the market changes, you can maintain financial security and peace of mind, and lay a solid foundation for a long-term and stable trading path.
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