Category: Money tips Release Date: 2007-02-19
Does not mean that there is no stop-loss sense of the courage to face up to mistakes, will lose the path to explore the possibility of success! Whether the "stop-loss" is to determine the success or failure of the watershed! Mai Bukai this step, all efforts will be doomed to fail!
Stop The ultimate goal is to preserve their strength, increase capital utilization and efficiency, to avoid the small mistakes make a big mistake even lead wiped out. Stop-loss can not avoid risks, but has been a greater risk of accidents can be avoided. Stop-loss trading in the stock market an important means to protect themselves, we must adhere to but also flexible.
In general, there are two different common methods of operation: one is left to the hold-up, no flesh; the other is pre-set one stop bit, once broken, the firm sold, and never hesitate. For the stop-loss, these two viewpoints. As the starting point for their own investment is different from the angle of approach are different, their views are very different.
Therefore, investors buy the shares quilt, the first question is, we must make a choice between selling or stay, that is, in the flesh, or put to choose between. At this time is usually nothing more than the factors that investors take into account the following 8 points:
1. Capital Management rigid requirement that the total amount of trading losses can not be large enough to hold a certain percentage of the principal amount (for example, 10-20%), and the loss of each transaction, the maximum allowable amount. This is the investors to participate in a transaction must be considered and followed with market conditions unrelated to the most basic elements, but also set the basic standards and the final stop of the bottom line.
2. To develop trading scheme assumes that when the ratio of risk and reward, which is whether to conduct the transaction in principle. If you get an objective analysis of the possible profits and losses caused by the imbalance between potential losses than gains, investors better not to manage transactions, if it was decided the sale should be planned in advance in accordance with the ratio of the risks and rewards to set stop-loss point.
3. Quick to judge the buying behavior caused by hold-up is a speculative investment, or investment buy. Where the fundamentals of listed companies under the circumstances, the value from the investment point of view of investors, stock picking, you can learn from Buffett's investment philosophy, do not care about stock prices rise and fall short of the Change.
4, rapidly determine the time to buy operations, belonging to shovel at the end of purchase or a chase-type model to buy. If it is chase the type of purchase, once the judge found that mistakes, to act decisively to stop. Without this determination, we can not participate in chase.
5, quickly determine the short-term operation are buying or medium to long term operation. They are part of robust investor, or are aggressive investor. The short term and the biggest failure is not a moment how much profit or loss, but because of mistakes that put short-term causing midline, and even made long-term. Will not stop those who are not suitable for short-term operation, it will never become a short-term expert. Should clearly understand their operational style and good people skills.
6, quick to judge when you buy the market rose is in a high position, or at a lower position. Broad market indexes higher, especially when profits drive the market higher, investors were elated when you stop to consider.
7, quick to judge the future to speak of individual stocks down space. More space down the firm stop. Especially with regard to some of the more popular front, or large stocks.
8, to distinguish between the main ship in the Xipan or, if it is the main ship, we must resolutely stop completely.
