Specific methods and application techniques for stop-loss
Stop-loss is by no means equivalent to cutting losses; it is one of the important principles of short-term trading, and it also has extremely specialized methods and scales.
In practical operations, the setting of stop-loss points is as follows:
1. When trading in the direction of the trend, the stop-loss point should be set further away from the purchase price to avoid being washed out by strong fluctuations. Generally speaking, in this case, the distance between the stop-loss price and the purchase price should be greater than 5%.
2. When speculating against the market, the stop-loss point should be set closer to the purchase price to guard against systemic unpredictable risks. Generally speaking, in this case, the distance between the stop-loss price and the purchase price should not exceed 2% to 4%.
3. Implement stop-loss when the stock price effectively breaks the upward trend line.
4. Implement stop-loss when the stock price breaks the short-term moving average (generally referring to the 5-day and 10-day moving averages).
5. Alternatively, set a suitable stop-loss point based on your own capital tolerance and psychological endurance. However, in any case, it should not exceed the 10% limit.
6. Flexibly set stop-loss points based on the specific stock characteristics of the held stocks. For stocks that are relatively active and prone to large fluctuations, set them further away; for stocks that are stable and have lower activity, set them closer.
7. In a clearly bullish market, there is no need to discuss stop-loss. At this time, all short-term speculative operations should be stopped; what you need to do is hold stocks for the medium term and fully invest your funds for a decisive battle.
8. In a clearly bearish trend, there is also no need to discuss stop-loss. At this time, you should be in an absolute cash position; how can there be a discussion about stop-loss?
If you are currently continuously losing and don’t know what to do, you can click to follow me, click on my profile to find me anytime; all contract and spot trading methods are shared. Just to gain followers
