First of all, we should correctly understand stop loss. Market uncertainty and price volatility determine that stop loss is often wrong. In fact, in every transaction, we are not sure whether to stop loss or not. If the stop loss is correct, we may be secretly happy. If the stop loss is wrong, we will not only suffer the pain of reduced funds, but also the pain of being fooled. The psychological blow is the most unbearable pain for investors.
Therefore, understanding stop loss is essentially about how to correctly understand wrong stop loss. We should also accept wrong stop loss calmly. For example, if your stop loss is correct in trading, it means that every time you trade is correct. If your trade is correct, why do you need to stop loss? Therefore, stop loss is a kind of cost, the cost of finding profit opportunities, and the price that must be paid for trading profit. This price can only be big or small, but it is difficult to distinguish right from wrong. If you want to make a profit, you must pay a price, including the price caused by wrong stop loss.
Face the wrong stop loss calmly, don't avoid it, and don't be afraid. Only in this way can you trade properly and make a profit in the end. This is the understanding of stop loss, including the understanding of wrong stop loss.
Stop loss should pay attention to the following issues:
First, "Everything is prepared, and nothing is prepared". All stop losses must be set before entering the market. When investing in the cryptocurrency circle, you must develop a good habit of setting a stop loss when opening a position. If you consider what standard to use when a loss occurs, it will be too late.
Second: Stop loss should be combined with the trend. There are three types of trends: up, down and consolidation. In the consolidation stage, the probability of error in stop loss is high when the price is within a certain range. Therefore, the execution of stop loss should be combined with the trend. In practice, consolidation can be regarded as an incomprehensible trend, and investors can rest and recuperate.
Third: Choose trading tools to grasp the stop loss point. This varies from person to person. It can be moving averages, trend lines, patterns and other tools, but it must be suitable for you. Don't blindly use them just because others use them well. The determination of trading tools is very important, and the ability to use trading tools will lead to completely different trading results.
In short, cryptocurrency trading focuses on sound trading strategies, among which fund management can be regarded as its core, and stop loss can be regarded as the soul of fund management. Only by doing a good job of fund management and strictly stopping losses can you make steady progress and become a general who always wins in the cryptocurrency market.
