Stop loss is an essential survival skill for every futures trader. Especially for those who have just stepped into the market, it is the top priority. Some people think that stop loss is a shame, as if they have lost to the market; some people think that stop loss is a kind of pain, and the mood cannot be calmed down for a long time after the stop loss. But one thing must be recognized: stop loss is for survival, and the actions for survival are instinctive, and there is no distinction between honor, disgrace, sadness and joy. Just like a gecko will snap off its tail without hesitation in the face of danger, doesn’t it hurt? But the instinct in its bones tells it that tail docking is a must in a dangerous situation. From this point of view, isn’t stop loss an instinctive reaction that traders should engrave in their bones?
Controllable stop loss

There are many ways to classify stop loss, but according to the degree of risk, there are two types: controllable and uncontrollable.
Among them, the controllable stop loss The most important thing is the stop loss in your plan. For example, if you enter the market with more than 3000 orders, the target price is 3500, and the stop loss point is 2800. Using a loss of 200 to gain a profit of 500 is the so-called trading plan, and the setting of the loss part is Can be considered as a controllable stop loss..

for The treatment of controllable stop loss is relatively simple, and the commonly used methods can be roughly divided into three types: fixed stop loss, trailing stop loss and conditional stop loss. ] 8 }; u7 o5 P” z

Fixed stop loss is to find the stop loss position according to a certain capital retracement ratio or time. For example, if the floating loss of the funds in a single entry reaches 5%, you will stop the loss and leave the market, or if the market trend goes against the market within 5 minutes of entering the market, you will stop the loss and leave the market. Most of such settings are related to the psychological endurance of traders, and to a certain extent, they can protect account funds and beautify the yield curve. However, there are some disadvantages of fixed stop loss, because the stop loss standard has little relationship with the market itself, so it is very likely that the market will reverse just after leaving the market.

Trailing stop loss is a dynamic stop loss method. For example, some traders Trading system: Take the W bottom in an upward trend as an example. The market enters the market at the second bottom close to the moving average and breaks through the previous K high point to enter the market. The stop loss position is set to the previous K low point. When the market continues to move upward, stop loss The position will also become the entry price (the profitable order cannot be turned into a loss). If the floating profit continues to increase, then set the take-profit exit point to the low point before the current K line. This series of changes The most popular stop loss method is trailing stop loss. Because the stop loss standard has a close relationship and logic with market development, and can also cover the take profit strategy, it is also one of the methods commonly used by many veterans. However, because the stop loss method is a combination of Therefore, unlike fixed stop loss, the loss of each transaction can be controlled within a certain amount. This also requires that the choice of entry point should be less risky and more accurate.

Conditional stop loss is based on one or several pre-supposed conditions. If it is not verified, the stop loss will be out. For example, if a certain event occurs, first assume the market There will be a sharp rise, but the result is not as magnificent as expected, but a small rise slowly and procrastinated. At this time, it is necessary to stop the loss and get out. Another example is that the market speeds up at important points, but if the market speeds up and then slows down or pause, you have to consider exiting. Since this stop loss method is compatible with some subjective elements, it is best to use it in combination with other methods, so as to ensure that the stop loss can be “both hard and soft”. YSHX

Uncontrollable stop loss and countermeasures

As mentioned above, the identification and operation of controllable stop loss are relatively simple, because it It is predictable. But the uncontrollable stop loss is not so “good”, it will not play the cards according to your way, and you are very likely to be caught off guard by its disorder and uncontrollable. Uncontrollable stop loss Loss refers to the sudden break of the pre-set stop loss point in an unexpected situation, which leads to the failure to exit the market smoothly when the market lacks sufficient liquidity, or there is no continuous price to execute the order (such as gapping). In a word , is the part of the loss that exceeds the controllable stop loss. As for the reason for the excess, it is nothing more than objective (the reason for the above market itself) and subjective (the stop loss is not firm, and there is no timely stop loss within the controllable range).

For example, during the transaction, the thread stop loss is set to 2800, but the “Double Eleven” market in 2016 appears, or the next day opens sharply lower, which makes the transaction fall into an embarrassing situation situation. If you stop the loss, you will have to pay losses beyond the controllable range, and the market is very likely to rebound in such an oversold situation; if you stop the loss, the market may fall again and again, making it even more difficult to deal with it. Such psychological struggles often become an important factor affecting traders’ rational decision-making.yunshfx

In the actual trading process, there will be more uncontrollable stop loss situations. In addition to objective factors, subjective and artificial factors will also make transactions fall into this dilemma How to deal with this situation?

The first is to add consideration of this aspect to your own trading system, and try to avoid such situations. For example, the usual stop loss is executed according to the trailing stop loss method (assuming that the trailing stop loss is generally at the cost of 5 to 10 points), but at the same time set a fixed stop loss of 20 points. As long as there is an uncontrollable stop loss situation, and the position of 20 points is touched, the system will automatically issue a stop loss order, so as to achieve the purpose of risk control. Yun Shang Hui Xin

Secondly, strengthen the research on trading varieties and be familiar with their operating characteristics. For example, grasp the average number of short jumps of this variety, the intensity and time of rational return after abnormal operation, the acceleration of the market before and after key points and the intensity of the accompanying liquidity vacuum, etc. At the same time, strengthen the analysis of the fundamentals of trading varieties, and recognize the internal logic and laws of the operation of varieties.

Finally, do a good job in fund management. For overnight single positions and holiday retention ratios, make settings that are in line with your own capital size and psychological endurance. For traders’ psychology, it helps to reduce their pressure so that they can make decisions more rationally. At the same time, they must also increase their ability to judge transactions, and must not carry orders against the trend. Yun Shang Hui Xin Limited

Only by restricting the uncontrollable stop loss from these three points can we effectively reduce the risk and keep the loss in the door. In fact, for the uncontrollable stop loss Countermeasures are also part of a perfect trading plan, because a scientific and reasonable trading system should include measures to deal with emergencies.