Stop loss is not only an idea, but also a plan and an operation. The concept of stop loss means that investors must understand the significance of stop loss in stock market investment from a strategic perspective, because in a high-risk stock market, survival is the first thing to talk about before further development, and the key role of stop loss is to make investors survive better. It can be said that stop loss is one of the most critical concepts in stock market investment. Stop loss plan refers to how to make a stop loss plan before an important investment decision is implemented. The most important step of stop-loss plan is to determine the specific stop-loss position according to various factors (such as important technical position or financial situation). Stop loss operation is the implementation of stop loss plan and an important step in stock market investment. If the stop loss plan cannot be transformed into a real stop loss operation, the stop loss is still an armchair strategist.
Stop loss rule
I. The crocodile principle
Professionals often use crocodile principle to explain the importance of stop loss. The original intention of the crocodile principle is: suppose a crocodile bites your foot. If you try to get rid of your feet with your hands, crocodiles will bite your feet and hands at the same time. The more you struggle, the more you get bitten. So, in case a crocodile bites your foot, your only chance is to sacrifice one foot. In the stock market, the crocodile principle is: when you find that your trading deviates from the direction of the market, you must stop immediately, without any delay or luck. Crocodiles eat people sounds cruel, but the stock market is actually a cruel place, and people are swallowed up or disappeared by it every day.
Let's look at a set of simple figures: when your capital has lost from 654.38+million to 90,000, and the loss rate is 1 ÷ 10 = 10%, you need to recover from 90,000 to 654.38+million, and the profit rate is only1÷ 9. If the loss is from 6,543,800 yuan to 75,000 yuan, and the loss rate is 25%, it will take 33.3% to recover the profit rate. If you lose from 654.38+million to 50,000, and the loss rate is 50%, you need 65,438+000% to recover the profit rate. In the market, it is not difficult to find a stock that has fallen by 50%, but it is only luck to ride a dark horse that has risen by 100%. As the saying goes, if you stay in the green hills, you are not afraid of burning without firewood. The meaning of stop loss is to ensure that you can survive in the market for a long time. Some people even say: stop loss = regeneration.
Second, the reason for the stop loss
Stop loss has two reasons. The first is subjective decision-making mistakes. Every investor who enters the stock market must admit that he may make mistakes at any time, which is a very important concept. The reason behind it is that the stock market is random, and the game of tens of millions of people makes it impossible to have a fixed law at any time. The only thing that never changes in the stock market is change. Of course, the stock market also has some non-random characteristics in a certain period of time, such as banker manipulation, capital flow, group psychology, natural cycle and so on. This is the soil for stock market experts to survive, and it is also the basis for attracting more people to join the stock market and maintaining the operation and development of the stock market. However, the operation of these non-random features will certainly not be a simple repetition, and can only exist in the sense of probability. If the probability of success is 70%, then there is also a 30% probability of failure. In addition, any law will always fail, and at this time you may meet a smart one. When the probability of failure becomes a reality, or the law fails, we must take a knife to stop the loss. Second, objective changes, such as unexpected sudden positive or negative changes in the fundamentals of a company or industry, major changes in macro-policies, wars, coups or terrorist incidents, natural disasters such as earthquakes and floods, broken agency capital chains or traders being arrested, etc.
Third, retail patents.
It should be noted that stop loss is a patent of retail investors. It is impossible for institutions to stop losses, because there are too many chips, and generally no one can take them. A common way for institutions to deal with decision-making mistakes or external events is to take some chips as bands and then wait for an opportunity to ship them step by step. Some retail investors in Zhuangzi think that the dealer hasn't shipped the goods yet, so it's not cost-effective, because the band operation is almost entirely in the hands of the dealer, and the cost can be gradually diluted through the band, which is almost impossible for you to do. Therefore, retail investors should give full play to their advantages of small size and good turnover. When they stop loss, they must resolutely stop loss. When the situation improves or the limelight passes, they should come back to visit the persistent banker and perhaps receive a generous gift.
Fourth, learn to short.
There is no short-selling mechanism in the domestic stock market for the time being, so we can only do more. If there is a short-selling mechanism, then long stops are mostly short. Because when you stop to be a bull, there are only two possibilities to predict the future, one is consolidation and the other is decline. If you predict consolidation, you will leave the market to wait and see or buy government bonds, and if you predict decline, you will short your backhand. Conversely, bears also need stop loss, and the stop loss of bears will often be a "mutiny" of bulls. Whether you can hold money or short is the simplest sign to judge whether a person is an investment expert. Since1May, 997 12, if you spend more than half of your time holding money, that is, short positions, congratulations, you have entered the ranks of experts or quasi-experts. Of course, those who are delayed by other things and forced to operate are not included. I believe that the domestic stock market will launch short-selling mechanism or index futures within one or two years. Learning to short in advance will be of great benefit. At present, there are 180 stock index futures simulation transactions in Minfa community. Interested parties may wish to have a try.
Fifth, be good at forgetting.
Stop loss in the stock market should be good at two forgetfulness. The first is to forget the purchase price. No matter what price you buy, you should forget your buying price immediately after buying, and only decide when to stop according to the market itself, and don't let your subjective feelings and emotions affect your objective judgment on the market. The second is to forget the stop-loss price, that is, pretend that you have never fired this ticket immediately after the stop-loss, and you will not be bitten by a snake for ten years. When you find that this stock has a new buying signal, you will not hesitate to kill it again. Buddha said that everything is impermanent, and all laws have no self, which is quite meaningful to the stock market. At present, a considerable proportion of investors in the market are living in a state of depression and anxiety, because they have great historical losses and cannot forget them. They always want to move back, but this mentality is pushing you to greater losses. Whether it is stock stop loss or account management, we must remember this sentence: always stand at zero.
Sixth, take profit and cover positions.
If you understand and stick to the concept of "always standing at zero", then stopping winning can actually be regarded as a stop loss. As the saying goes, the apprentice will buy and the master will sell. Selling here includes stop loss and stop winning. In the real market, it is often seen that some friends are proficient in stop-loss techniques to cut meat, proudly claiming that they are far from the trap, but they are not good at winning. They often take the elevator, ride the roller coaster, or rush down as soon as the sedan chair is lifted, and then watch the sedan chair go up and down the hill, beating their chests and cursing themselves. At the end of September 2002, the number of shareholders of Changan Automobile was 72,655. By the end of June 2003, there were only 1755 1 person. At least 55 thousand people who got off the sedan chair were more annoyed than those who had never been on the sedan chair. In order to win well, we must first forget the purchase price and decide whether to sell only according to the current market trend. We are not afraid of the high road into the clouds, the heights are too cold, and we do not covet the comfort of sedan chairs. When it's time to go down, go down decisively. Secondly, it is to comprehensively use the various stop-loss methods mentioned later and treat stop-loss from the perspective of stop-loss.
There are two situations to cover positions. One is to make up the position passively, that is, never admit your mistake and touch the dark, which is a shortcut to expand the loss. The other is to take the initiative to make up the position, which is generally used when judging the irrational decline or reasonable fluctuation of the market. Active shorting should be shorting before the stop-loss point arrives. Once the stop-loss point is reached, it is still necessary to take the shot. Irresistible, never against the trend. Pay attention to the efficiency of the use of funds and don't be prepared to die.
Seven, stop loss method.
Broadly speaking, there are two ways to stop loss. The first type is regular stop loss, that is, when the reasons and conditions for buying or holding disappear, even if it is in a state of loss, it should be sold immediately. The conventional stop loss method depends entirely on the reasons and conditions of the original purchase. Because the reasons and conditions of each purchase are very different, the conventional stop-loss method cannot be generalized. For example, suppose that the original buying and holding conditions are that the moving averages on the 5th, 10 and 30th are arranged in ascending order, then if one moving average crosses another moving average and the ascending order is destroyed, it should be sold immediately. For another example, if the reason for buying at the beginning is that the listed company is expected to have a favorable asset restructuring, then if the restructuring fails, it should be sold immediately. The second category is auxiliary stop loss. There are many ways here, which is also a topic that many people often love to talk about. Let's use a certain space to introduce various common auxiliary stop-loss methods as comprehensively as possible.
Maximum loss method. This is the simplest stop loss method, which stops when the floating loss of buying stocks reaches a certain percentage point. This percentage depends on your risk preference, trading strategy and operating cycle. For example, the ultra-short term (T+ 1) can be 1.5 ~ 3%, the short term (about 5 days) can be 3 ~ 5%, and the long term can be 5 ~ 10%. Once this percentage point is determined, it cannot be easily changed and must be resolutely and decisively implemented.
Retreat stop loss. If the price rises first after buying and then falls after reaching a relatively high point, then the falling range from the relatively high point can be set as the stop loss target. The specific value of this range also depends on the individual situation, and generally you can refer to the percentage point of the maximum loss method mentioned above. In addition, you can also add the factor of falling time (that is, days), such as the stop loss is set to fall by 5% within 3 days. Retreat stop loss is actually more used to stop winning.
Stop loss sideways. Set the time when the price is sideways within a certain range after buying as the stop loss target. For example, if the increase does not reach 5% within 5 days after buying, you can set the stop loss. Generally, the sideways stop loss should be used at the same time as the maximum loss method to fully control the risk.
Expected r multiplier stop loss. The r multiplier is the income divided by the initial risk. For example, a transaction actually earns 25% in the end, and the initial risk assumption is that the maximum loss is 5%, then the R multiplier of this transaction is 5. Now we have to apply its concept in reverse, first calculate an expected return, then set an expected R multiplier, and then divide the expected return by the expected R multiplier, and the result is the stop loss target. Regarding the determination of expected return, if you are a system trader, you can use the average return of each transaction tested by your system history (note that it is not the annual average return); If you are not a system trader, you can judge the expected return of this transaction by experience. The expected r multiplier is generally recommended to be between 2.7 and 3.4.
Stop loss of moving average. Short-term, mid-line and long-term investors can use the MA5, MA20 and MA 120 moving averages as stop-loss points respectively. In addition, the stop loss effect of EMA and SMA EMA is generally better than that of MA. The MACD red column starts to fall, which can also be used as a good stop loss point.
Cost moving average stop loss. Compared with the moving average, the cost moving average takes more account of the volume factor, and the effect is generally better. The specific method is basically the same as the moving average. However, it should be reminded that the moving average is always a lagging indicator, and we should not expect too much from it. In addition, in the consolidation stage, you should be prepared to endure a large number of false signals of the moving average.
Brin channel stop loss. In the upward trend, you can use the bit line in the Brin channel as the stop loss point, or you can use the narrowing of the Brin bandwidth as the stop loss point.
Volatile stop loss. This method is more complicated and is often used by experts, such as using the Brin channel of the average actual price range or the moving average of the upside as the stop loss target.
K-line combination stop loss. Including the emergence of two yin clips, one yang and two yin, one yang and two yin behind, or one yin breaks three lines, as well as typical peak K-line combinations such as evening star, decapitation, meteor, two crows and three crows hanging from the treetops.
K-line stop loss Including the stock price to break the neck line of head-shoulder, M-head, arc-top and other head types, as well as a broken hay knife with a yin and three lines.
Tangent support stop loss. The stock price effectively falls below the trend line or breaks through the support line, which can be used as a stop loss point.
Gann line stop loss. The stock price can effectively break the Gann angle line 1× 1 or 2× 1, or turn at the key position of time-delay network and time-delay arc, which can be used as a stop loss point.
Stop loss at key psychological prices. Some key psychological prices are created by stock reviews and media cooperation. For example, if a stock critic says what price a stock should pay attention to, and this sentence is widely known in the market, then this price becomes the market psychological price. In addition, integers, historical highs and lows, issue prices, and prices of recent huge orders may all become key psychological prices.
Stop loss in a chip-intensive area. Chip-intensive areas will have strong support or resistance to stock prices. After a solid dense area is punctured, it will often be transformed from the original support area to the resistance area. Set the stop position according to the chip-intensive area, and stop immediately once it is broken. However, it should be noted that at present, most stock software on the market does not consider the ex-rights factor when dealing with chip allocation. If the stock you hold has recently experienced a large ex-dividend (usually within one year), you need to prevent the software from marking the wrong chip-intensive area.
The chip distribution chart moves up the stop loss. The reason why the chip distribution map moves up is generally high turnover. If you move up to form a new dense peak, the risk is often great, so stop loss or go out in time.
SAR (parabolic) stop loss. SAR is a good stop-loss indicator in the upward trend, especially when the hot stocks with a certain cumulative increase enter the final crazy acceleration. However, in the consolidation stage, SAR basically fails, and the consolidation stage generally accounts for more than half of the market operation time.
TWR (Baota line) stop loss. Baota line plays an obvious role in judging the top. Generally, when the increase is large, there will be three flat-topped or continuous red columns. If it turns green at this time, it often indicates that the decline is about to begin and should stop.
CDP (contrarian operation) stop loss. In the middle and late period of bear market, NL of CDP can be used as a stop-loss point for ultra-short-term operation (T+ 1 or T+2).
Sudden stop loss. Disaster means a sudden and great change in prices. For stop loss, it is mainly to prevent the opening gap and the late diving. Most of the mutations are caused by major external factors, such as the 9 1 1 incident and major policy changes. The late diving is generally due to policy changes, mostly because government departments have issued new documents after going to work at 2 pm. Therefore, it is suggested that office investors should quickly check the market at 9:30 am and 2:30 pm if possible, or make an agreement with other professional investors to inform them as soon as possible to avoid losses caused by sudden changes.
Fundamental stop loss. When there is a fundamental turning point in the fundamentals of individual stocks, or the expected return fails to appear, investors should abandon any illusions and fight their way out at any cost, and then they can no longer look at any pure technical indicators. If there is any major adverse news, such as being investigated, or there are signs of capital fracture, the institutions of Zhuanggu will also reduce their positions and go out.
Stop loss in the market. Judging the trend of the market is the premise of operating individual stocks. It is very harmful to say that "being an individual stock without looking at the market" in a bear market. Generally speaking, the systemic risk of the market has a process of gradual accumulation. When it is found that the market is already in a high-risk area and the possibility of a mid-line decline is high, the position should be reduced in time, and the stocks held should be considered for sale even if they lose money. Heroes who go against the market let others do it, and we will only jump the queue and rush to the front when the troops come back.
The methods of auxiliary stop loss are far more than those mentioned above. The above list is for reference only. According to your own operation style and the specific situation of each operation, it is most important to establish and skillfully use your own stop-loss method. Mr Chen Hao has a saying to the effect that there may be n reasons for buying, but only one reason for selling is enough. Therefore, it is suggested that it is best to master more auxiliary stop-loss methods, not only screening and optimization, but also comprehensive application. For big friends who have more than 500,000 yuan, or who have invested more than 200,000 yuan in a stock, we should also pay attention to the setting of the stop loss point as far as possible above the key price of the broader market, otherwise we can't find a way to run, get in or get out.
Eight, reduce the occurrence of stop loss.
Theoretically, the best way to stop loss is not to stop loss, that is, to improve the correct rate and accuracy of operational decisions. In this regard, in addition to mastering the basic skills of stock selection, we can also add the stop-loss method mentioned above as a restrictive condition to the buying decision-making process. No matter what the reasons and conditions are, after you choose a stock, you should also check whether the stock is in a stop-loss state according to your auxiliary stop-loss method. Taking the stop-loss method as the restrictive condition of buying decision in turn can reduce the occurrence of the need for stop-loss to a considerable extent.
Investors are advised to preset a stop-loss point or stop-loss plan before buying all transactions, and regard this work as a necessary decision-making procedure or operational discipline. When you set the stop-loss point in advance, you will be more calm and less impatient, thus reducing the occurrence of wrong decisions. Strictly speaking, stop loss actually belongs to the content of fund management, and a clear and complete fund management scheme is higher than a simple stop loss.
Nine, psychological topics
Finally, repeat: always stand at zero. Just as buying makes mistakes, so does stop loss. When you find yourself making a stop-loss mistake, you should be brave enough to enter the forward team again. In short, we must overcome greed and luck with rationality and decisiveness in order to walk with the market for a long time.
The trick of stop loss
Stop loss is an important means to protect yourself in stock trading, just like a brake in a car. Only by being good at "braking" in an emergency can we ensure safety. The ultimate goal of stop loss is to save strength, improve the utilization rate and efficiency of funds, and avoid small mistakes leading to big mistakes or even the annihilation of the whole army. Stop loss can't avoid risks, but it can avoid greater unexpected risks. How to set a stop loss? There are the following methods for reference:
Balance point stop loss method: set the original stop loss position immediately after opening the position, and the original stop loss position can be set at 5%-8% from the position of the position. When the stock price rises after buying, the stop loss will be transferred to the opening price, that is, your breakeven point, that is, the stop loss position of the balance point. Accordingly, investors can effectively establish a "zero-risk" system and cash out some or all profits at any time. After the balance stop loss system is established, the next purpose is to cash out the position. Cash liquidation is highly technical, but no matter what liquidation technique is used, the stop loss position must be adjusted accordingly with the rise of stock price. For example, investors buy in 10 yuan, and the original stop loss is located in 9.2 yuan. If the stock price falls all the way after buying, they can stop loss in 9.2 yuan; After buying, the stock price rises, and the stop loss of the balance point is around 10 yuan. If it falls below, the position can be cleared; If the price continues to rise after buying, you can immediately adjust the stop loss. If the stock price rises to 12 yuan, the stop loss can be adjusted to 1 1 yuan, the price rises to 13 yuan, and the stop loss also "rises" to 12 yuan.
Time stop loss method: people generally pay attention to the stop loss of space, regardless of the time factor. As long as the price falls to the predetermined price, it will be cut off, which is the space stop loss. The advantage of space stop loss is that you can wait for the big market at the expense of time, but the disadvantage is that you often have to wait a long time to stop loss, which not only delays time but also loses money. So it is necessary to introduce the concept of time stop loss. Time stop loss is a stop loss technology designed according to the trading cycle. For example, the trading cycle of a stock is expected to be five days. After buying, we will wander around the buying price line for more than five days, so we should resolutely leave the market the next day. From the perspective of space stop loss, the price may not have reached the stop loss level, but the holding time has exceeded the time limit. In order not to increase the loss of time, it is advisable to go out first.
Technical stop loss method: set stop loss orders at key technical positions to avoid further expansion of losses. There is no fixed model for technical stop loss method. Generally speaking, using technical stop loss method is nothing more than gambling with small losses to make big profits. Its main index is: 1, and the important moving average is below; 2. The tangent of the trend line is broken; 3. The neckline position of the head type such as head-shoulder top, double top or arc top is broken; 4. The lower rail of the ascending channel is broken; 5. It was broken near the gap. For example, after buying in the lower track of the rising channel, wait for the rising trend to end before closing the position, and the stop loss position is set near the important moving average. For another example, after the market enters the consolidation stage, there will usually be a convergent triangle shape, and the deviation rate between the price and the medium-term moving average (generally 10-20 antenna) will gradually decrease. Once the deviation rate of the price from the medium-term moving average is enlarged again, it means that the market is over. At this time, if the price turns to a downward trend, you should leave decisively.
Necessity of stop loss
Volatility and unpredictability are the most fundamental characteristics of the market, the basis of the existence of the market, and the causes of risks in trading. This is an unchangeable feature. There is never uncertainty in trading, and all analysis and prediction are just a possibility. The transaction based on this possibility is naturally uncertain, and the uncertain behavior must have measures to control its risk expansion, so it produces a stop loss.
Stop loss is a natural occurrence of human beings in the process of trading, not deliberately created, but an instinctive reaction of investors to protect themselves. The uncertainty of the market makes the existence of stop loss necessary and important. Successful investors may have different trading methods, but stop loss is the same feature to ensure their success. Soros, a world investment guru, said that there is no risk in investment itself, but out-of-control investment is risky. Learn to stop loss and never fall in love with loss. Stop loss is far more important than profit, because at any time, capital preservation comes first and profit comes second. It is quite effective to establish a reasonable stop loss principle, and the core of the steady stop loss principle is not to let the loss continue to expand.
Why is it so difficult to stop loss?
It is important to understand the meaning of stop loss, however, this is not the final result. In fact, there are many examples of investors setting a stop loss but not executing it. In the market, the tragedy of being swept out of the house is staged almost every day. Why is it so difficult to stop loss? There are three reasons: one is luck. Although some investors know that the trend has been broken, they always want to have a look and wait because they are too hesitant, which leads to a good opportunity to miss the stop loss; Second, frequent price fluctuations will make investors hesitate, and frequent wrong stop losses will leave lingering memories for investors, thus shaking their determination to stop losses next time; Third, executing stop loss is a painful thing, a bloody process, and a challenge and test to human weakness.
In fact, we can't be sure whether every transaction is in the right state or the wrong state. Even if it is profitable, it is difficult for us to decide whether to go out immediately or wait and see, let alone be trapped. The instinct of human nature to pursue greed will make every investor unwilling to win a few points less, let alone thank him.
Programmed stop loss
It is precisely because of the above reasons that when the price reaches the stop loss position, some investors miss the square inch and suffer losses, and the stop loss position is changed again and again; Some investors temporarily changed their minds and increased their positions against the trend in an attempt to put all their eggs in one basket to recover losses; Some investors simply adopt the "ostrich" policy and let it go after the losses expand. In order to avoid these phenomena, the author thinks that programmed stop loss strategy can be adopted.
Major international futures exchanges usually offer stop-loss orders. Traders can set a price in advance, and when the market price reaches this price, the stop loss order will take effect automatically immediately. At present, there is no stop-loss instruction in domestic futures exchanges, but advanced futures trading tools can be used, which is a simple and effective method to help investors strictly implement stop-loss at present.
At present, some domestic trading systems can provide two kinds of stop loss orders: market stop loss and limit stop loss. Market stop loss means that as soon as the market price touches the preset stop loss price, a stop loss order is issued at the market price; Limit stop loss means that as soon as the market price touches the preset stop loss price, the commission will be sent at the limit price. Market stop-loss orders can ensure the success of stop-loss, while limit stop-loss orders can avoid unnecessary losses when prices are discontinuous. Both have their advantages and disadvantages. Usually, market stop-loss orders are used to trade active varieties, and limit stop-loss orders are used to trade inactive varieties.
This trading system helps investors to develop good stop-loss habits, thus avoiding risks in the market, minimizing losses, turning passivity into initiative and being invincible in the investment market.
How to correctly understand stop loss
The uncertainty of the market and the fluctuation of the price determine that the stop loss is often wrong. In fact, in every transaction, we are not sure whether to stop loss. If the stop loss is right, we may be secretly pleased. If the stop loss is wrong, there will be not only the pain of reducing funds, but also the pain of being fooled. Psychological blow is the most unbearable pain for investors.
Therefore, understanding stop loss is essentially how to correctly understand wrong stop loss. We also have to accept the wrong stop loss. For a simple example, if your stop loss is correct in trading, it means that your trading is correct every time. If your trading is correct, why stop loss? Therefore, stop loss is a kind of cost, the cost of finding profit opportunities, and the price that must be paid for trading profit. This kind of price is only big and small, and it is difficult to distinguish right from wrong. If you want to make a profit, you must pay a price, including the price caused by the wrong stop loss.
Face the wrong stop loss calmly, don't avoid it, and don't be afraid. Only in this way can we trade normally and finally make a profit. This is my understanding of stop loss, including my understanding of wrong stop loss.
Problems needing attention
First, "everything is established in advance, and it will be abolished without advance", and all stop losses must be set before entering the market. When investing in stocks, we must form a good habit, that is, set a stop loss when opening positions, and often have no time to consider what criteria to use when losses occur.
Second, stop loss should be combined with the trend. There are three trends: upward, downward and consolidation. In the consolidation stage, the probability of price stop loss making mistakes in a certain range is high, and the execution of stop loss should be combined with the trend. In practice, the author thinks that consolidation can be regarded as an incomprehensible trend, and investors can recuperate.
Third, choose trading tools and grasp the stop loss point. This varies from person to person. It can be a moving average, trend line, shape and other tools, but it must be suitable for you. Don't use it blindly because others use it well. The determination of trading tools is very important, and the ability to use trading tools will lead to completely different trading results.
What is a stop-loss price?
The stop price is a protection mechanism to avoid getting deeper and deeper. When the set stop loss price is reached, the system will automatically close the position.