Stop loss in time means that when the loss of an investment reaches a predetermined amount, the position is cut out in time to avoid further losses. Its purpose is to limit the loss to a smaller range when the investment is wrong.

investors can limit their losses to a certain extent through stop loss, and at the same time, they can get the reward of success to the maximum extent. In other words, stop loss makes it possible to gain greater benefits at a smaller cost.

alligator principle is often used by professionals to illustrate the importance of stop loss. Alligator principle's original intention is: Suppose a crocodile bites your foot. If you try to get rid of your foot with your hand, the crocodile will bite your foot and hand at the same time. The more you struggle, the more you get bitten. So, in case the crocodile bites your foot, your only chance is to sacrifice one foot. In the stock market, alligator principle is: When you find that your trading deviates from the direction of the market, you must stop immediately to avoid further losses.

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Stop loss

Stop loss skills:

1. Portfolio stop loss

Investors no longer focus on a single fund product, but build the transformation of the portfolio style of radical, stable and conservative fund products. If investors' risk tolerance changes, they should not be limited to sticking to the original fund product portfolio, but should take the initiative to adjust.

2. Variety stop loss:

There is no stop loss in money market funds, which is based on liquidity management of funds. Once it is held for three years, there will be a third-party agency to guarantee it, so don't worry too much.

Stop loss of stock fund products should grasp the change of economic cycle. Only by stopping losses during the economic boom will it play a hedging role. The stop loss of bond fund products should consider the change of monetary policy.

3. Stop loss in operation mode. Mainly, investors can avoid the risk of concentrated investment in fund products by covering the positions of outstanding fund products or optimizing the portfolio structure of fund products.

4. mechanism stop loss. That is to say, we should use the financial management idea of "not putting eggs in the same basket" to redistribute family assets among bank deposits, insurance and capital markets.

5, the idea of stop loss. Investors should adhere to long-term investment, value investment, diversified investment and rational investment in the specific fund product investment process. Stop loss by changing the habit of frequent fund operation and adhering to the correct concept of holding the base.