The Four Stop Loss Method For Stock Market Investment Is To Have A Good Mentality Before Making Money.

When it comes to stocks, if you are making money, you don't have to say so, but when the market changes, the money you earn will fall back, wipe out most of the profits and even start to lose money. What should we do at this time?

In fact, when these are not happening, what you should think of is

。

What is stop loss?

Stop loss refers to the timely clearance of an investment when it reaches a predetermined amount of loss, so as to avoid a bigger loss.

The purpose of stop loss is to limit the loss to a smaller range.

Reed, a well-known wealth management institution, said that one important difference between stock investment and gambling is that the former can limit the loss to a certain extent through stop loss and make it possible to gain larger benefits at a lower cost.

Although the meaning of stop loss is clear to most people, we all know that making stop loss decisions is not easy in the course of investment.

Usually, hesitation when facing a stop loss is often the following two situations:

Many trends have been broken, but they always want to have a look and wait to miss the opportunity to stop.

2, price fluctuations are frequent.

This situation is more difficult, price fluctuating frequently, making the decision-making face frequent mistakes, leaving a shadow of investment, thus wavering the determination of the next stop.

As a matter of fact, every day we trade is uncertain.

It's still wrong, but there are several ways that you may make a stop loss decision and be more resolute.

A, buy in cost method

First of all, you have to change the fate that is always locked up, that is, once the share price falls to your cost line, you will ship out.

This is the simplest and most direct way.

B, fixed ratio stop loss method

In this way, you first have to change your psychological expectations. Don't expect to go up when you buy stocks. You have to anticipate that your stocks may not be as good as you want them to go up. You need to set up a stop line, such as 5%, 7%, 10%, etc., of course, it is not necessarily the whole number.

C, technical stop loss method

This stop loss method combines stock prices with technical analysis. After eliminating random fluctuations in the market, a stop loss order is set up in key technical positions to avoid further expansion of losses.

For example, the fine classification of the average line stop method, form stop loss method, trend stop loss method and so on.

D, unconditional stop loss method

When there is a fundamental change in the market, investors should abandon any illusions and throw them away without cost.

The fundamental change of this fundamental plane may be natural disasters, man-made disasters or extremely important policy directives. At this time, we need to make a decisive decision and unconditionally go out.

These are the four categories of stop loss.

Of course, if it is a stock market investment, it is also a matter of time to judge the market trend is not allowed. For investors with low risk preference, Jiefong Reed financial planner suggests that indirect investment can be used to invest in the stock market, such as the institutional fund varieties with hedging strategies, which are stable in earnings and are not afraid of the bull bear market.

In general, investors must have a sense of risk in investing in the stock market.

The above four stop loss methods are for investors' reference.

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