For stock, futures or foreign exchange trading, stop loss is part of the transaction. For investors, it will be effective if there is a stop loss in a transaction and it persists. Today, I will bring you a 3: 1 gold stop-loss rule, hoping to help your investment.
The content of the 3: 1 gold stop-loss rule in trading skills is that the profit at the take-profit point is three times that at the stop-loss point. For example, let's explain: if the stock you buy falls by 7% or 8%, you should close it in time. When your stock rises by 20% to 25%, you should consider selling some, and don't wait for it to rise more greedily. Of course, the percentage here can change according to the market, but this ratio should always be kept at 3: 1!
Of course, even if the success rate of your stock selection is only 1/3, this scheme can guarantee the value of your funds in the investment. Once your stock selection success rate is higher than 1/3, your income will increase steadily.
Of course, some investors will have doubts, that is, if the stock I bought fell by 8% with a stop loss, and then rose by more than 50% after selling, wouldn't it be a fool to sell it? Obviously, many investors will not believe in the 3: 1 rule. In fact, what I want to say is that the 8% stop loss is to prevent it from falling 10%, 20%, 25%, 40% or even more. Do you think of it as a small insurance premium to ensure that 8% loss will not become 60% loss? Is it easy? Obviously, for most investors. 8% loss can be easily dealt with, while 60% loss is somewhat unbearable.
In the market, the weakness of human nature will be reflected. When the stock you hold falls, you will lose some money, and you will be afraid that it will fall even more, instead of imagining that it will rebound to make up for the previous losses. As a trading system, it can sometimes save your life, so you should stop the loss according to the plan of 3: 1 during the execution. Finally, I hope everyone will have a happy investment.
Seeing this, everyone should know something about the 3: 1 gold stop-loss rule. Want to know more about investment knowledge, please pay attention to us!