Lao K's Notes - Which is more important, stop loss or take profit? I am serious about doing analysis.

This question looks simple, but it contains profound truths.

First of all, the important thing about stop loss is to protect our principal and avoid huge losses in the investment process. As we often say, profit is the product of risk. Without stop loss, once the market shows an unfavorable trend, we may face huge losses. Therefore, stop loss is one of the principles that must be followed in investment.

Secondly, the meaning of stop profit is to capture potential profits. Although the market trend may be reversed due to various factors, sometimes we can seize opportunities and achieve stable returns. Stop profit can help us lock in profits and avoid losing the profits we have obtained in market fluctuations. Therefore, stop profit is also one of the skills that must be mastered in investment.

However, stop loss and stop profit are not completely opposite. In actual operation, we set stop profit and stop loss reasonably according to the market trend and our own risk tolerance. For example, when the market trend is in line with expectations, we can appropriately expand the stop loss to gain more room for advancement. On the contrary, when the market trend is unfavorable, we appropriately reduce the stop loss to ensure the safety of the principal. It should be noted that the stop loss and take profit settings must not be static and must be adjusted in a timely manner according to market dynamics.

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