In fact, in the futures market, stop loss should pay attention to a certain way, a certain amount of law, stop loss should be timely, can not shirk, let's see what misunderstandings we have about stop loss.
Myth 1: Frequent stop loss, the more you stop, the more you lose.
Most novice investors, after suffering losses without using stop loss at first or immediately, adopt certain stop loss strategies and strictly abide by the principle of stop loss for each order in futures trading, which is a typical "once bitten, twice shy", which leads to the other extreme, that is, frequent losses and frequent stop losses. Due to the unclear rules of the futures market, the trading confidence is insufficient and the stop loss is irregular.
The adverse effects of this misunderstanding are enormous. With the decrease of funds and the increase of losses, traders hesitate between stop loss and no stop loss, and can't implement the previously scheduled stop loss plan. Everyone should pay attention to avoid this situation. Before trading any futures commodity, the first thing to do is to understand the standard price and fluctuation point of this commodity in the futures market, and formulate effective stop-loss countermeasures and stop-loss positions according to different futures commodities.
Myth 2: Losses can be dragged back.
This situation is common to most investors. When losses occur, they usually hesitate and take risks. They don't carry out the original stop-loss plan. They expect to wait for the big reversal of the market according to the delay and expect to "drag" the damage back. Especially in the case of great injury, they usually expect to reduce the injury according to their psychological state. It is the most difficult and easiest psychological misunderstanding for futures traders.
In fact, any futures commodity has the best stop-loss timing and stop-loss position. Once you miss it because of your hesitation, sometimes it can't be redeemed, and it may cause more harm. So, my friends, make a decisive decision and stop loss. Don't be vague. This is the so-called "not afraid of making mistakes, only afraid of procrastination".
Myth 3: Stop loss is small, not just big.
After trading for a period of time, some investors feel that they have some practical experience in trading, and usually underestimate their stop-loss ability and fall into the misunderstanding of "stopping a small loss and losing a lot of money".
For example, when the trading loss is 10%, you are likely to think objectively and prepare to implement a stop-loss plan. But when the damage is about 50%, you can't think objectively and independently, and you won't stop loss and wait for the miracle. It's the same sentence I said above. It's chaotic when it stops. Once you enter the loss situation, you should distinguish right from wrong in the case of stop loss, minimize the loss, or quit trading and wait for opportunities, expecting a better opportunity in the next game.