止盈止损
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Correctly Understanding Stop-Loss and Take-Profit in the Cryptocurrency Market
Principle
Whether summarizing experiences from practice or reviewing the works of masters, everyone agrees that in the process of securities, futures trading, and other investment transactions, an important principle should be adhered to - hold onto profitable positions, let profitable positions run, and cut losses on erroneous positions in a timely manner. The importance of cutting losses is also self-evident.
Certainty Effect and Reflection Effect
Verification of the Certainty Effect: Most people are often cautious, risk-averse, and prefer to take profits when they are in a state of gain, fearing the loss of existing profits. In a state of gain, the majority of people are risk-averse.
Whether summarizing experiences from practice or reviewing the works of masters, everyone agrees that in the process of securities, futures trading, and other investment transactions, an important principle should be adhered to - hold onto profitable positions, let profitable positions run, and cut losses on erroneous positions in a timely manner. The importance of cutting losses is also self-evident.
Certainty Effect and Reflection Effect
Verification of the Certainty Effect: Most people are often cautious, risk-averse, and prefer to take profits when they are in a state of gain, fearing the loss of existing profits. In a state of gain, the majority of people are risk-averse.
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#止盈止损
Divided into two scenarios: 1) Single Transaction and 2) Holding Position
1) Single Transaction Take Profit and Stop Loss:
Relatively simple,
Prioritize stop loss,
Set stop loss points around comprehensive resistance and support levels,
Then combine with the psychological loss limit for the single transaction,
Take the smaller value, the aim is neither to be easily shaken out,
Nor to prevent the situation from getting out of control,
At the same time, even if unexpected events occur, it should not affect the mindset.
Take profit is the same with psychological take profit level and technical take profit level,
First determine the take profit point near the support or resistance level,
Then look for a take profit point that feels comfortable to you,
Take the minimum of the two.
If the comfortable point is higher than the technical point,
Then consider whether it's worth opening a position;
Only when the technical reference point is higher than the comfortable point,
Is it worth initiating a transaction.
The take profit and stop loss ratio should generally be greater than 1,
1.5 or above is quite comfortable,
If the win rate is extremely high, consider going below 1,
But when making small profits and large losses, one must acknowledge this is the result of the choice.
Generally, technical take profit and stop loss levels are relatively easy to grasp,
It just requires more observation, learning, and practical experience,
With effort and diligent study, it can generally be done well.
The difficulty lies in finding your psychological take profit and stop loss points
And internalizing them through practice.
2) Holding Position Take Profit and Stop Loss:
Also known as psychological take profit and stop loss,
When the account gains or loses a certain amount,
The mindset begins to change dramatically.
One must have a clear self-awareness,
Otherwise, it is easy to fall into an emergency state,
Unexpected irrational behavior may occur,
Greatly increasing the possibility of blowing the account.
This cannot be solved by any experience or reasoning,
It requires repeatedly honing one's mindset,
This is an understanding of one's own humanity,
It is about how we understand ourselves
And the art of how to deal with our greed and fear.
When you feel that your position has reached a point where you begin to have various crazy thoughts,
Learn to instinctively say stop,
Close all positions with one click,
Shut down and force a break until you get out of that crazy state.
Take profit and stop loss are extremely important parts of trading,
Once you pass this hurdle,
You can effectively prevent blowing the account
And continuous losses in the account.
I hope to encourage everyone,
Starting from not blowing the account and no longer continuing to lose money,
Enter the door of qualified traders.
$BTC
Divided into two scenarios: 1) Single Transaction and 2) Holding Position
1) Single Transaction Take Profit and Stop Loss:
Relatively simple,
Prioritize stop loss,
Set stop loss points around comprehensive resistance and support levels,
Then combine with the psychological loss limit for the single transaction,
Take the smaller value, the aim is neither to be easily shaken out,
Nor to prevent the situation from getting out of control,
At the same time, even if unexpected events occur, it should not affect the mindset.
Take profit is the same with psychological take profit level and technical take profit level,
First determine the take profit point near the support or resistance level,
Then look for a take profit point that feels comfortable to you,
Take the minimum of the two.
If the comfortable point is higher than the technical point,
Then consider whether it's worth opening a position;
Only when the technical reference point is higher than the comfortable point,
Is it worth initiating a transaction.
The take profit and stop loss ratio should generally be greater than 1,
1.5 or above is quite comfortable,
If the win rate is extremely high, consider going below 1,
But when making small profits and large losses, one must acknowledge this is the result of the choice.
Generally, technical take profit and stop loss levels are relatively easy to grasp,
It just requires more observation, learning, and practical experience,
With effort and diligent study, it can generally be done well.
The difficulty lies in finding your psychological take profit and stop loss points
And internalizing them through practice.
2) Holding Position Take Profit and Stop Loss:
Also known as psychological take profit and stop loss,
When the account gains or loses a certain amount,
The mindset begins to change dramatically.
One must have a clear self-awareness,
Otherwise, it is easy to fall into an emergency state,
Unexpected irrational behavior may occur,
Greatly increasing the possibility of blowing the account.
This cannot be solved by any experience or reasoning,
It requires repeatedly honing one's mindset,
This is an understanding of one's own humanity,
It is about how we understand ourselves
And the art of how to deal with our greed and fear.
When you feel that your position has reached a point where you begin to have various crazy thoughts,
Learn to instinctively say stop,
Close all positions with one click,
Shut down and force a break until you get out of that crazy state.
Take profit and stop loss are extremely important parts of trading,
Once you pass this hurdle,
You can effectively prevent blowing the account
And continuous losses in the account.
I hope to encourage everyone,
Starting from not blowing the account and no longer continuing to lose money,
Enter the door of qualified traders.
$BTC
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#止盈止损 I couldn't stand the nonsense that some "masters" said in the square today.
They talked about some useless principles, saying that if you make a mistake, you will lose money, and if you do it right, you will hold on. What is right? What is wrong? Is a fluctuation of 100 dollars wrong? Or 1,000 dollars?
Just like when I studied the Hundred Schools of Thought in the Pre-Qin Dynasty and saw the theory of Mohism's respect for the virtuous, Mad must respect the best talents and promote the best talents. What is excellence? What is virtue? The introductory course of modern human resources can explain this idea in seconds. But the nonsense of the masters in the square cannot be compared with Mohism.
The attitude of stop-profit and stop-loss is related to the strategy. If you do it on the right side, you should exit at a strong pressure point and when the pattern is broken according to the fundamental environment, the pattern, or the indicator.
The same is true for the left side. It is different to exit for scalping and exit for long-term holding.
So how to view the fundamentals? How to view the pattern and how to use the indicator?
All these are the basis of a trading system.
I plan to start a live broadcast on Binance to talk about the basics of trading, from the basics of economics to the basic theories of market trading. I will start when I can start the broadcast.
I like academic and practical professional knowledge, and I hate things that are specious and cannot withstand verification and falsification. At that time, there was a doctoral thesis in the National Institute of Macroeconomics that used variance to predict a group of local economic trends. I criticized it, but I think this idea is still valuable for reference.
They talked about some useless principles, saying that if you make a mistake, you will lose money, and if you do it right, you will hold on. What is right? What is wrong? Is a fluctuation of 100 dollars wrong? Or 1,000 dollars?
Just like when I studied the Hundred Schools of Thought in the Pre-Qin Dynasty and saw the theory of Mohism's respect for the virtuous, Mad must respect the best talents and promote the best talents. What is excellence? What is virtue? The introductory course of modern human resources can explain this idea in seconds. But the nonsense of the masters in the square cannot be compared with Mohism.
The attitude of stop-profit and stop-loss is related to the strategy. If you do it on the right side, you should exit at a strong pressure point and when the pattern is broken according to the fundamental environment, the pattern, or the indicator.
The same is true for the left side. It is different to exit for scalping and exit for long-term holding.
So how to view the fundamentals? How to view the pattern and how to use the indicator?
All these are the basis of a trading system.
I plan to start a live broadcast on Binance to talk about the basics of trading, from the basics of economics to the basic theories of market trading. I will start when I can start the broadcast.
I like academic and practical professional knowledge, and I hate things that are specious and cannot withstand verification and falsification. At that time, there was a doctoral thesis in the National Institute of Macroeconomics that used variance to predict a group of local economic trends. I criticized it, but I think this idea is still valuable for reference.
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💥Loss aversion is the most expensive bad habit for traders!
Loss aversion = Knowing you should leave but not leaving
Clearly set rules, yet always fantasizing "it will come back"🚫
🧠 Essence comes from:
The pain of losing money > The joy of making money
Fear of "cutting losses" = failure
Just bear with it, will it come back up?
✅ Adjust your perception:
Stop loss ≠ failure, but rather successful risk control
Mistakes are part of trading
The market doesn't care about your costs
👉 Remember: After each stop loss, review your decisions, not your profits and losses.
Loss aversion = Knowing you should leave but not leaving
Clearly set rules, yet always fantasizing "it will come back"🚫
🧠 Essence comes from:
The pain of losing money > The joy of making money
Fear of "cutting losses" = failure
Just bear with it, will it come back up?
✅ Adjust your perception:
Stop loss ≠ failure, but rather successful risk control
Mistakes are part of trading
The market doesn't care about your costs
👉 Remember: After each stop loss, review your decisions, not your profits and losses.
B
BNB/USDT
Price
662.22
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Taking Profits vs Cutting Losses, Which is More Difficult
The essence of taking profits and cutting losses is the same, but the difficulties are still different. Both taking profits and cutting losses are selling behaviors, and both are risk management actions taken after identifying risk signals. From another perspective, taking profits is actually a form of cutting losses. Stop-loss orders are usually set together at the time of placing the order, so there is enough time for thinking and decision-making.
Taking profits requires us to make temporary decisions in the face of unknown market conditions, usually giving us very little time to decide. This places higher demands on traders' on-the-spot reactions and psychological qualities. Traders can easily make wrong decisions in haste, and then regret it later when reviewing their trades, because there is plenty of time for thinking and analysis during the review.
Taking profits requires us to make temporary decisions in the face of unknown market conditions, usually giving us very little time to decide. This places higher demands on traders' on-the-spot reactions and psychological qualities. Traders can easily make wrong decisions in haste, and then regret it later when reviewing their trades, because there is plenty of time for thinking and analysis during the review.
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Teachers, for the first contract opening, I filled in the take profit and stop loss prices above. Why is there no prompt for take profit and stop loss at the very bottom after opening the order? Only after opening the order and clicking on the take profit and stop loss below will the last line appear: Take Profit 31, Stop Loss 33. Why is this? Please explain #止盈止损
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