Why can't we make the decision to stop loss? We know stop loss is important but we can't do it. When we operate, we watch the stop loss point being reached but we still hold on and imagine the price will go up, and finally our position is liquidated.

What is the nature of stop loss?

The essence of stop loss is to stop profit.

I take an affordable loss to test whether the market will develop as I expected. If my stop loss is hit, it means that my current understanding is inconsistent with the market. If the market continues to develop, I will wait to reap the expected profits.

The essence of stop loss is stop profit. Stop loss is for safer profit stopping. Stop loss is the vanguard. The vanguard is to explore the truth. If it is right, it will advance straight ahead. If it is wrong, it will retreat in time.

After stop loss is done, the rest is to stop profit. Stop loss is active defense in a passive market. The purpose of active defense is to preserve the manpower. By using a small stop loss to test the big market, it is like using a small force to move a large object. At the turning point of the trend, use the smallest force to test the start of the market. This is like riding the wind and waves and setting sail.

Stop loss is something that must be faced. Stop loss is like the impermanence of life. Impermanence cannot be avoided and must be faced every day. Stop loss means accepting impermanence, facing pain, actively withdrawing, not getting lost in it, not fighting against it, and running away if it is wrong. Stop loss is to see the big picture from the small details. It is the switch for identifying the transformation of trend nature. If the stop loss is broken, the nature is transformed. If it is not broken, the nature is maintained and you can hold it.

Stop loss means to actively withdraw from the uncertainty of the market, not to oppose the unknown emotions, and to control the uncertainty within your own active stop loss through stop loss. What remains is the certainty of the market.

The current market situation is uncertain, but my stop loss is certain.

I resolved market uncertainties through deterministic stop losses.

What remains must be the deterministic market conditions that the market and I face together. I only need to deal with the minimum controllable damage of uncertainty to me every moment, and I can continue to get market certainty.

Misfortune is the foundation of good fortune, and good fortune is the foundation of misfortune.

Blessing and misfortune are one and the same. Misfortune is hidden in blessing. If you don’t know how to face the unknown when you are making a profit and take the initiative to stop profit, the blessing will turn into misfortune.

There is a blessing hidden in misfortune. By stopping loss, avoiding harmful market conditions and facing the next opportunity, the disaster will turn into a blessing.

The essence of stop loss is to proactively deal with market uncertainty. The factors of uncertainty are within my control. Next, I must be prepared to face the certainty of the market and be ready to accept uncertainty in certainty.

So if you want certainty, you have to deal with uncertainty, which is the conversion between yin and yang.

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