The market continues to rise, with many stocks experiencing significant gains. For investors, while profitability is important, learning to cut losses is also a fundamental skill. So, how to cut losses?

1. Stop loss at important support or resistance levels

The important resistance or support levels mainly include: dense trading areas where prices stay for a long time; High or low prices over a longer period of time; The positions provided by trend lines, golden ratio, or moving average systems, etc. It is worth mentioning that some stocks may also experience a reversal in price trend after resistance or support positions are broken.

2. Proportional stop loss method

It refers to setting the loss amount as a fixed proportion, and promptly closing the position once the loss exceeds this proportion. The setting of stop loss ratio is the key to fixed stop loss. The proportion of fixed stop loss mainly depends on the maximum loss that investors can bear. This ratio varies depending on investors' mentality, economic capacity, and other factors. It is also related to investors' profit expectations. Usually around 15%. Once the stop loss ratio is set, investors can avoid being shaken out by meaningless random fluctuations.

It is generally suitable for two types of investors: first, investors who have just entered the market; The second is investors in high-risk markets such as futures markets. The mandatory effect of fixed stop loss is quite obvious, and investors do not need to overly rely on their judgment of the market.

3. Fixed stop loss method

Currently, many traders adopt this stop loss method. The key to its operation is to set the maximum loss limit for the funds in the entry position, which is generally 5% to 20% of the occupied funds, or the absolute amount of the occupied funds, such as 100 yuan per lot. Once the loss limit is reached, stop loss and exit immediately at any price. Industry insiders believe that when using this stop loss method, it is necessary to pay attention to the following two points: (1) different varieties or different operation time periods should use different stop loss limits. (2) The established stop loss limit must be validated by probability in the market.

4. Unconditional stop loss method

The stop loss that runs away without considering costs is called unconditional stop loss. When the fundamentals of the market undergo a fundamental turning point, investors should abandon any illusions and rush out regardless of cost in order to preserve their strength and seize the opportunity to fight again. Fundamental changes are often difficult to reverse. When the fundamentals deteriorate, investors should make a decisive decision to cut their positions and exit.

In summary, stop loss is a necessary means of controlling risk, and investors should have their own styles on how to use stop loss tools effectively. In trading, investors' grasp of the overall position and trend of the market is crucial. Use stop loss more in the high price circle, use it less or not in the low price circle, and in the medium price circle, it should be determined according to the market trend. Taking advantage of the situation and using the stop loss level well is the only way for investors to win.