Example of how to deal with continuous losses

The techniques for selling stocks are almost as rich as those for buying stocks, but what they have in common is that many of these techniques are not necessarily would be successful, much less so for today's speculators. Here I would like to share with you some methods of stopping losses in the stock market for your reference.

Analysis of how to deal with continuous losses

Anyone who has worked hard in the futures market for many years should have had several painful experiences of losses. The author believes that most successful investors lose more times than they make profits every year. The secret to its success is to maximize successful positions and minimize losing positions.

Most investors always have this experience on different occasions, "Why am I so unlucky? I always fail!" In fact, the author has also had such an experience. Investors who claim that they have never made a mistake in the futures market, or that they have never been "lost" in any transaction, are either lying or have never been exposed to the futures market.

What should an investor do when he loses money continuously in the futures market and the hope of making a profit becomes increasingly slim? The following is the author’s summary from the experience of interacting with excellent investors in the futures market over the years. Here are some experiences for everyone to learn from:

——Don’t trade excessively. If you are trading several varieties at the same time and losing money one after another, why not shorten the front line and focus on trading one or two varieties? In this way, you can keep up with the market and better monitor the quality of your orders. Also, your money won’t be lost quickly.

——Keep a detailed transaction diary. If you can keep a trading diary, you can trace the source, find out the clues of failure and success, and make timely adjustments.

——If you are still losing money despite reducing the number of trading types, it is best to withdraw and take a break to sort out your messy thoughts. You may be able to create a "virtual" market in your brain to verify the correctness of your judgment on the market and regain your confidence. If you still can't grasp the direction in the virtual market, you'd better seek other investment methods.

——If you have suffered heavy losses in the futures market, do not risk your wealth and life by putting all your money on the line! Do not think that you can recover your capital or turn defeat into victory. In fact, such reckless behavior can only be counterproductive! Remember, investing less means taking less risks. When the time comes, and funds allow you to expand your investment, it is not too late for you to add more. In a market full of risks and complexities, we must be wise and cautious and "endure the best". This is the experience of successful investors.

——Patience and moderation. I preach this over and over again. Do you follow your investment plan every time you trade? If not, follow it. Did you not formulate an exit strategy at all after making an order? If so, your trading plan is not complete enough. Are you impatient? The author has contacted many successful medium and long-term investors. They only do it a few times a year. They are always quietly waiting for the opportunity to appear - the "perfect time" they expect. If you are a medium and long-term investor, you don’t have to do it every market. As long as your judgment of the general trend is accurate and the position on hand complies with your judgment, just take a long-term view and catch the big fish. Don't let the market lead you.

——Confidence. Have confidence in your investment philosophy. If you are not confident in your investment philosophy, ask why? If your investment method really doesn't work, try another one. Read books written by successful people and find out how they succeeded. But be careful of those so-called investment secrets, tips for success, and money-making methods that are ostentatious and deceptive.

——Work hard. If you can't study the market painstakingly, don't expect to make money in the futures market. How much do you know about the fundamentals of the instrument you are trading? Even if your technical analysis is superb, you should still at least have a good understanding of its fundamentals. For example, before the USDA releases some data, although the technical chart of corn prices is very intact, smart investors generally will not act rashly before the government releases important data.

If you want to know what advice I have for the man who suffered heavy losses, I would like to say: don’t give up easily. Recognizing that you need help before you lose all your assets is the first step to turning things around. There is a long road ahead. As long as you are modest and prudent, study hard, and make continuous progress, there is hope of regaining lost ground and achieving success.

What are the key points that can be referenced when setting the stop loss price?

1. The stock price falls below the middle price of the previous trading day;

2. The stock price falls below the previous The lowest price in a trading day;

3. The stock price falls below the 5-day cost moving average;

4. The stock price falls below the rising trend line;

5. The stock price Falling below the lower line of the previous stock price consolidation platform;

6. The stock price falling below the bottom of the triangle formed by the convergence of the previous shocks.

Analysis of the three most effective stop-loss methods

1 Fixed-amount stop-loss method

This is the simplest stop-loss method. It refers to reducing the loss amount Set to a fixed ratio, and the position will be closed immediately once the loss is greater than this ratio. It is generally applicable to two types of investors: one is investors who have just entered the market; the other is investors in riskier markets (such as futures markets).

The mandatory effect of fixed stop loss is relatively obvious, and investors do not need to rely too much on judgment of the market. The setting of stop loss ratio is the key to fixed stop loss. The ratio of fixed stop loss consists of two data: one is the maximum loss that investors can bear. This ratio varies depending on investor mentality, financial affordability, etc. It is also related to investors’ profit expectations. The second is the random fluctuation of trading varieties. This is a dynamic process and investors should set this ratio based on experience.

2 Technical stop loss method

The more complicated one is the technical stop loss method. It combines stop loss setting with technical analysis, and sets stop loss orders at key technical positions after eliminating random market fluctuations to avoid further expansion of losses. This method requires investors to have strong technical analysis capabilities and self-control. The technical stop loss method has higher requirements for investors than the former one, and it is difficult to find a fixed mode. Generally speaking, using the technical stop loss method is nothing more than betting on a big profit with a small loss. For example, after buying on the lower track of an upward channel, wait for the end of the upward trend before closing the position, and set the stop loss position near the relatively reliable average moving line. As far as the Shanghai stock market is concerned, when the market index rises, the 5-day moving average can maintain the short-term trend, and the 20-day or 30-day moving average will maintain the medium- and long-term trend. Once the rising market starts, you can intervene at the 5-day moving average and set the stop loss near the 20-day moving average. You can not only enjoy most of the profits brought by the staged rising market, but also get out of the way in time when the head is formed to ensure profits. . In the early stage of the rising market, the distance between the 5-day moving average and the 20-day moving average is very small. Even if you misread the market and stop loss near the 20-day moving average, the loss will not be too large.

3 Unconditional stop loss method

A stop loss that runs away regardless of the cost is called an unconditional stop loss. When there is a fundamental turning point in the fundamentals of the market, investors should abandon any illusions and rush out regardless of the cost in order to preserve their strength and choose the opportunity to fight again. Changes in fundamentals are often difficult to reverse. When fundamentals deteriorate, investors should act decisively and close their positions.