1) Stop loss: When a small loss is caused by an investment mistake, cut off the loss in time to prevent greater losses;

2) Stop profit: Stop profit in time after the investment is profitable to prevent the reverse operation of the market from eroding profits.

There are two ways to make a profit:

1) static take profit

Static profit-taking refers to setting specific profit targets, which is an important means to overcome greed once the profit targets are reached. Many investors are always worried that if they sell, they may lose the higher selling price in the afternoon market.

2) Dynamic take profit

Dynamic take profit means that when the invested stock is profitable, investors think that individual stocks have the motivation to continue to rise because the rising pattern of the stock price is intact or the theme is unfinished, so they continue to hold shares until the stock price falls. When the stock price reaches a certain standard, investors take the operation of selling for profit.

Stop loss method:

1) When you are long, the basic setting method of stop loss is to set the stop loss below the key support;

2) When shorting, the basic stop loss setting method is to set the stop loss above the key resistance.

Extended data:

The concept of profit-taking is widely used in many investment fields. For example, when your stock reaches a certain price and is profitable, you plan to leave and close your position. At this time, leaving is taking profit; For example, in the futures field, whether you are a long or short trader in the market, as long as you feel that you can make a profit when it is beneficial to your trading direction, then your departure is also a take profit; Similarly, in foreign exchange, commodities and other commercial fields, profit-making departure can also be called profit-making departure.

References:

Take profit and stop loss-Baidu Encyclopedia