Many investors don't know much about the stop-loss and profit-taking point of the stock market. As for how to set the stop-loss point and take-profit point, there are indeed some technical problems, so we all need to know clearly in advance, such as the following methods. Let's have a look!

How to set stop loss and take profit points

Set the take profit point: the take profit point is set when the trend is stagflation and there is a downward trend; Set the stop loss point: For retail investors, the short-term stop loss point is generally set at 5%. If the risk tolerance is high, it can be set to the range of 5%- 10%.

But even if a stop loss point is set, it should be operated according to the specific situation of the stock. For retail investors, it is best to set the stop loss point conservatively, with less profit and relatively less loss.

How to set futures stop loss and take profit?

Because there are many trading softwares in futures, you can set them according to your own habits, but the best ratio of take profit and stop loss is 1: 2, that is to say, the price of take profit is twice that of stop loss, and the stop loss price should not exceed about 5% of the total funds, and it is best to be below 5% for novice traders.

If you have enough confidence in your trading model, you can also use the setting method of trailing stop loss, but the point cannot be set too large, otherwise it will be difficult to trigger. Futures trading is risky and can be long and short, but once the direction is reversed, there will be losses. Reminder: The stock market is risky, so be cautious when entering the market!

What should I do?

As an important way to reduce the cost of investment failure, stop loss is not a panacea, it is just a safety belt and parachute on the investment road. Not wearing a seat belt does not mean that you will definitely crash, but wearing a seat belt will make the investment more stable. Stop loss is necessary, but it can only be used as a preventive measure, and the abuse and misuse of stop loss will only cause harm.

For most investors, only by making fewer mistakes, reducing the frequency of changing hands, operating in small positions and persistently implementing operational discipline can they upgrade from amateur investment to professional investment and embark on a long-term and stable profit path. Only when investors use the stop-loss strategy correctly can they be considered as real investment profit insurance.