In futures trading, some people may not realize the importance of stop loss. Many futures investors have experienced severe losses and regret not stopping losses in time.
So how to stop loss is correct? Sometimes the stop loss is set too large, resulting in too much loss. Sometimes the stop loss is set small, but it is easily triggered. The market that was originally judged to be correct, but the market is missed due to the stop loss; moreover, if the stop loss is set small, it will make us stop loss frequently, and the accumulated loss is also not small, and it also has a serious impact on trading confidence.
Why is it so hard to stop loss? In fact, many investors in the market are very casual about the setting of stop loss points. What’s more, some people do not set a stop loss point, and operate casually, stop loss if they want to stop loss. This unscientific method can easily lead to losses.
Stop loss methods can generally be divided into three categories: fixed stop loss, trailing stop loss and conditional stop loss.
Fixed stop loss: limit the specific stop loss point and fix the amount of loss. For example, the 10% stop loss method, this type of stop loss method is easier to understand and easy to operate.
Trailing Stop Loss: Set and follow the relevant conditions to complete the stop loss. This type of stop loss does not set a specific stop loss point, and its advantage is that it can be used in combination with trading conditions. It is a better stop loss strategy, which can help traders better grasp the market trend.
Conditional Stop Loss: Assume that certain market conditions will occur in advance, and then immediately stop loss if the expected situation does not occur. In layman’s terms, it means that it does not happen when it should happen, that is, a conditional stop loss is performed.
In the futures market, there are many stop loss methods, but these are the ones most commonly used by investors. Whichever method you use, the right one is the best.
