Timely stop-loss is incredibly wise; those who take decisive action to survive are heroes.
If partners are not right, even if the business has reached a certain scale, it should be split quickly.
If friends are wrong, even if you have been together for a long time, you should cut ties as soon as possible.
If the wife is wrong, even if divorce means splitting half of the assets, you should get divorced quickly.
Some have specifically studied what characteristics successful Wall Street fund managers have. The answer is they are all divorced, even after sharing huge amounts of wealth with their wives.
Those who can defeat the market never hesitate to cut losses.
Apple CEO Tim Cook became famous for a decisive action: cutting losses in time. When many products couldn't be sold, Cook didn’t sell them; instead, he had his team dig a big pit and buried all the Apple computers, decisively abandoning them.
Admit defeat and leave.
Be a bit shrewd; the people and things you interact with should benefit you. Only valuable things matter; anything with negative returns should be cut off.
Returning to trading, the essence of stop-loss can be viewed as the cost of profit, rather than a loss.
Stop-loss! Stop-loss! Stop-loss! Control the loss amount, reduce the maximum drawdown.
Taking 10,000 yuan as an example, each loss of 2%, losing 20 times in a row, 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 time 9039.21
6th time 8858.43
7th time 8681.26
8th time 8507.63
9th time 8337.48
10th time 8170.73
11th time 8007.32
12th time 7847.17
13th time 7690.23
14th time 7536.43
15th time 7385.70
16th time 7237.99
17th time 7093.23
18th time 6951.37
19th time 6812.34
20th time 6676.09
Taking 10,000 yuan as an example, each loss of 5%, losing 20 times in a row, 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
5th time 7737.81
6th time 7350.92
7th time 6983.37
8th time 6634.20
9th time 6302.49
10th time 5987.37
11th time 5688.00
12th time 5403.60
13th time 5133.42
14th time 4876.75
15th time 4632.91
16th time 4401.26
17th time 4181.20
18th time 3972.14
19th time 3773.53
20th time 3584.86
Each loss of 2%, losing 20 times in a row, will leave more than half of the principal.
Each loss of 5%, losing 14 times in a row will halve the principal.
Beginners or large funds can reduce loss ratios, with each loss not exceeding 2%;
Experienced traders or small funds can appropriately increase loss ratios, with each loss not exceeding 5%;
As long as you're not a gambler or incredibly unlucky, the probability of losing everything is extremely low.
As long as you are not kicked off the table, there is still a chance!
99% of people cannot resist using high leverage, do not stop-loss, and will eventually face liquidation!
Whether in trading or in life, a strong person's attitude remains consistent.
Quickly admit mistakes and settle quickly; sunk costs should not be a decision factor.
Thank you for reading, I am Chris, let's support each other.
💻Angel - Chris
