Foreign exchange investment is a kind of risk investment, and stop loss is a key step in this investment. The setting of stop loss is not only related to skills, but also related to mentality. A good attitude and skilled skills can be sure of profitability.
Operational errors are inevitable in foreign exchange investment, so the role of stop loss is ready to come out, so how can we cut the meat in time when mistakes, stop loss and leave the market to avoid small mistakes. In fact, the function of stop loss is to protect investors from making mistakes in their decision-making and reduce trading losses. Ordinary foreign exchange investors often cannot have a correct understanding of the use of stop losses, and there are two most common types.
First, think that you will win the general, disdain to set stop losses.
- There is a stop loss price in mind, but there is often no stop loss in hand.
The first type does not set a stop loss, and the investor market will sooner or later learn a bitter lesson. 9 orders are not profitable and 1 order loses. This often happens under such circumstances.
The second type of mind has a stop loss, which lies in the fear of unreasonable stop loss leaving the market, and then waiting to leave the market before deciding whether to close the position, but often refuses to admit defeat and temporarily hesitates. Therefore, the consequence of not setting a stop loss in advance is usually The stop loss will be lowered and lowered, and eventually a carry order will be formed, which will lead to a big mistake, and will be forced to close the position when it is intolerable.
As for how to choose the appropriate price to set the stop loss, it depends on the analysis system used by the investor, such as wave theory, pattern analysis, and average line. There will be different calculation methods.
In summary, we believe that the following points should be observed:
- You must set a stop loss before entering the market, and then you can safely observe the development of the market.
- After setting the stop loss order, do not cancel it at will, or return the stop loss in case of loss.
- When the direction of opening a position is correct, you can gradually adjust the original stop loss price to follow the development of the market to ensure vested interests and try to earn more profits.