Take Profit and Stop Loss: The Key to Survival and Profit in Trading
In the trading markets of stocks, futures, and cryptocurrencies, take profit and stop loss are the core strategies of risk management, concerning the safety of investors' capital and the locking in of profits. Stop loss, as the 'lifeline' of trading, can avoid the risk of being wiped out in extreme market conditions by setting a pre-defined loss boundary, allowing one to retain the green mountains and not fear the lack of firewood. One should not rush in blindly due to temporary setbacks. Data shows that over 70% of liquidations stem from not strictly enforcing stop loss; even if the market reverses after a stop loss, it is still the correct decision from a capital management perspective.
Take profit is equally indispensable. The market fluctuates frequently, and a unilateral trend is often accompanied by a 5%-15% pullback. If profits are not locked in promptly, it is easy to give back profits or even incur a loss of principal. Scientific take profit should be combined with technical indicators and fundamentals, dynamically adjusting the levels. Whether it is intraday short-term or medium to long-term investment, the setting of take profit and stop loss needs to match the trading cycle and risk preference. Strictly adhering to this discipline can transform trading from emotional decision-making into quantifiable systematic operations, serving as a critical dividing line between professional investors and ordinary traders. No fat person became fat in one bite, and a person without long-term vision is destined not to delve deeply and develop.
