It is extremely wise to stop loss in time. Anyone who knows how to cut off an arm to survive is a hero.
If the partner is not the right one, the business must be separated as soon as possible even if the company has grown to a certain scale.
If your friends are not the right ones, you should cut ties as soon as possible even if you have been together for a long time.
If your wife is not right, you should divorce her quickly even if the property will be divided in half.
Someone has studied the characteristics of fund managers who have made a lot of money on Wall Street. The answer is that they are all divorced, even if they have given their wives a huge amount of wealth.
Those who can beat the market never hesitate to cut losses.
Apple CEO Tim Cook also became famous for cutting losses in a timely manner. When many stocks could not be sold, Cook did not sell them. Instead, he asked his subordinates to dig a big pit and buried all the Apple computers in the ground, decisively discarding them.
Admit defeat, pay the bill and leave.
Be a little more mercenary. The people and things you come into contact with should be beneficial to you and valuable. Any negative returns should be cut off.
Back to trading, the essence of stop loss can be seen as the cost of profit rather than loss.
Stop loss! Stop loss! Stop loss! Control the amount of loss and reduce the maximum drawdown.
Taking 10,000 yuan as an example, if the loss is 2% each time and there are 20 consecutive losses, the remaining principal is as follows:
Number of losses Remaining amount (yuan)
1st time 9800.00
2nd time 9604.00
3rd time 9411.92
4th time 9223.68
5th 9039.21
The 6th time 8858.43
7th time 8681.26
The 8th time 8507.63
9th time 8337.48
10th time 8170.73
11th 8007.32
12th 7847.17
13th 7690.23
14th time 7536.43
15th 7385.70
16th 7237.99
17th 7093.23
18th 6951.37
19th 6812.34
20th 6676.09
Taking 10,000 yuan as an example, if the loss is 5% each time and there are 20 consecutive losses, the remaining principal is as follows:
Number of losses Remaining amount (yuan)
1st time 9500.00
2nd time 9025.00
3rd time 8573.75
4th time 8145.06
The 5th time 7737.81
The 6th time 7350.92
7th time 6983.37
The 8th time 6634.20
9th time 6302.49
10th time 5987.37
11th time 5688.00
12th 5403.60
13th 5133.42
14th time 4876.75
15th 4632.91
16th 4401.26
17th 4181.20
18th 3972.14
19th 3773.53
20th 3584.86
If you lose 2% each time and lose 20 times in a row, most of your principal will remain.
If you lose 5% each time for 14 consecutive times, your principal will be halved.
Newbies or large funds can reduce the loss ratio, and each loss should not exceed 2%;
For veterans or small funds, the loss ratio should be appropriately increased, and each loss should not exceed 5%;
As long as you are not a gambler or have extremely bad luck, the probability of losing everything is extremely low.
As long as you don’t get kicked off the table, you still have a chance!
99% of people can’t help but use high leverage, don’t stop loss, hold on to orders and eventually get liquidated!
Regardless of transactions or the surroundings, the strong people's attitude towards life remains consistent.
Admit your mistakes quickly, pay the bill and leave quickly. Sunk costs cannot be used as a decision-making factor.
Thanks for reading, I’m Chris, and let’s encourage each other.
