Category: Money tips Release Date: 2005-12-26
To sum up, stop-loss methods are the following:
A fixed stop-loss method
This is the simplest of stop-loss method, which refers to the loss is set to a fixed ratio, once the loss is greater than the ratio on the timely liquidation. It generally applies to two types of investors: First, investors just entering the market; second, higher risk markets (such as the futures market) in the investors. The mandatory role of the fixed stop more obvious that investors do not need over-reliance on Quotes judgments.
Set stop-loss ratio is the key to the fixed stop. The proportion of the fixed stop-loss data from the two components: First, investors can bear the greatest losses. The proportion due to investor sentiment, economic carrying capacity varies. As well as investor expectations about earnings. Two types of random fluctuations in the transaction. This means that in the absence of external factors, the market transaction group behavior disorder caused by fluctuations in the price. Setting a fixed stop-loss ratio of the data in these two years to find a balance. This is a dynamic process, investors should be based on experience, to set the ratio. Once the stop-loss ratio setting, investors can avoid being unnecessarily out random fluctuations in shock.
2, technical stop-loss method
Some of the more complex technical stop-loss method. It is the stop-loss set combined with technical analysis to exclude random fluctuations in the market after the key technical bits set in the stop-loss orders, so as to avoid further losses. This approach requires investors to have a stronger technical analysis capabilities and self-control. Compared technical stop before the more demanding of a number of investors, it is difficult to find a fixed pattern. In general, use technology to stop laws, nothing more than a small bet big profit loss. For example, in ascending channel, after buying the next track, waiting for the end of the upward trend re-open positions, and stops are located in a relatively reliable moving average line in the vicinity. On the Shanghai stock market, the market index on the row, 5-day moving average can be maintained short-term trends in 20 days or 30-day moving average will be maintained in the long-term trend. Once after the start of an increase Quotes may be involved in 5-day moving average but will stop at the 20-day moving average located near the stage and enjoy the rise in most of the profits arising Quotes, but also to get out in time for the formation of the head to ensure that the profit . Quotes on the rise early, 5-day moving average and 20-day moving average distance is very small, even if the wrong market, the 20-day moving average near the stop loss will not be too much.
Again, the market entered a consolidation phase (plate Bureau), the usually present box or convergence triangle shape, price and medium-term moving average (typically 10-20 antenna) is a deviation from the rate of narrowing. At this point investors can technically the largest deviation from the rate of the intervention, and stops are located in the largest deviation from the rate of disk Bureau Office. This low, sell high, get the difference. Once the price of the medium-term moving average deviation from the rate of re-amplification, it means that disk Bureau has ended. At this point, if prices fall into, investors should be bold and leave. City Council is set for the purposes of a relatively unilateral. Bureau of the initial disc, the market that everyone is worried, shock greater, the transaction can venture into. Council should set the latter part of the scope of the stop-loss due to narrow and improve the insurance factor.
3, unconditional stop-loss method
Regardless of cost, Duo Lu ran the stop is called an unconditional stop. When the market has undergone a fundamental turning point in the fundamentals, investors should abandon any illusions, popped up all costs in order to preserve their strength, choose the right future battles. Changes in fundamentals is often difficult to reverse. Deterioration in fundamentals, investors should act decisively and cut out warehouse.
To sum up, stop-loss is a necessary means to control risk, how to make good use of stop-loss tool, investors should own styles. In the transaction, investors in the market's overall position, grasp the trend is very important. In the high-priced multi-purpose ring stop at a low price with or without a small circle, in the medium-priced ring should be determined as the market is moving. The flow, make good use of stop bit is the only way to win investors.
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