How to avoid big losses in trading?
Fixed stop loss, I think it is the best risk control method.
Several factors that affect account profit and loss: entry position, stop loss position, take profit position, and opening volume.
Entry position: Most of them are still price trading rather than trend trading. The price is difficult to predict, so it is extremely difficult, but retail investors like it because everyone can predict the price; trend trading, once the trend is formed, it will not change easily, but the judgment of the trend requires a certain level of technology.
Stop loss position: This is related to the entry position. If the entry position is not good, the stop loss must be difficult to set. The standard for setting the stop loss is: rationality and not easy to be swept, there must be a basis.
Take profit position: This is the same as the entry position, based on the signal.
Opening volume: This requires thinking, but most people will not think about it. Regardless of the period, each position is opened with a fixed amount. This long-term operation is destined to end in losses. The risk value of each signal is different, and the profit and loss ratio is different. How can the same opening volume be used? Yiming uses fixed stop loss here, and reversely calculates the number of open positions, which ensures that there will be no big losses in each transaction.
The calculation of the number of open positions is like the number of troops deployed on the battlefield. Where should the troops be heavily guarded and where should the defense be withdrawn? This requires skills. Once the shells are fired, all the bullets are pressed. It would be strange if there is no loss!
