Stop-loss setting - the 'seatbelt' of investing: It is essential to develop the habit of setting a stop-loss immediately when opening a position. During trading, one must never harbor any delusions of profit, as market trends are unpredictable. Trading without a stop-loss is like walking on the edge of a cliff, where one may fall into the abyss at any moment. For every transaction, the stop-loss must be part of the trading instructions, ensuring that losses can be controlled in a timely manner when the market experiences adverse fluctuations.
Reasonable planning of stop-loss amounts for trial trading: When opening a trial position, the setting of the stop-loss amount is extremely important. Generally, the single stop-loss amount should not exceed 2% of the total capital. For investors who are new to the investment field or have a lower risk appetite, it is recommended to initially set this percentage at 1%. As you gradually achieve stable profits during your investment process, you can moderately adjust this percentage based on your ability to manage risk, but you still need to act cautiously. For example, if your total capital is 1 million yuan, with a stop-loss percentage of 1%, the maximum loss for a single trial position should be controlled within 10,000 yuan.
Strict stop-loss, adhere to the 30% red line: When total capital losses reach 30%, you must unconditionally close positions and exit immediately. This is a bottom line that must not be crossed; once total capital losses reach this level, it indicates that the investment strategy may have a serious deviation, and continuing to trade is likely to lead to greater losses. Timely stop-loss exit preserves the remaining capital strength and prepares for future investment opportunities.
Avoid holding onto losing positions and recognize mistakes in a timely manner: If you forget to set a stop-loss due to negligence, once you find that the market trend is unfavorable, you should immediately close the position. In stock markets and other investment markets, one should not blindly expect a rebound before closing the position, nor should one easily increase the position to average out losses. Many investment tycoons have stumbled on this point. Even if you successfully hold through 10 unfavorable market conditions, if you fail to withstand just once, all previous profits will vanish, and everything will return to zero. Therefore, in investing, you must bravely face mistakes, stop losses in a timely manner, and avoid falling into greater difficulties.
Focus on the basics, be cautious with position increases: For investors new to the market, the primary task is to solidly learn the fundamental knowledge of investing and master basic investment skills. At this stage, frequent position increases are not recommended; instead, trade with fixed position sizes each time. Fixed position trading helps investors better understand how market fluctuations impact their capital, accumulate investment experience, and form an investment rhythm that suits them. Once the investment level improves and there is a deeper understanding of the market, consider whether and how to increase positions.
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