Understanding the Importance of Using Stop Loss and Managing Position Sizes in Trading

Wang Xiaozhang, KOL

1. Consequences of not liking to use stop loss when placing orders:

In fact, no one is willing to use stop loss, because as long as you use stop loss, the order will be swept, but there are always people who are lucky and think that the market will rebound or fall back, and they will not use stop loss to recover the loss. In fact, have you ever thought that if you don't use stop loss, there is a risk of being trapped, and once trapped, it is not far from the liquidation. In fact, the stop loss is definitely a measure to avoid market reversal, to avoid more losses after misreading the market.

2. Risks of heavy or full positions when placing orders:

There are risks in investing, and all friends who invest know this, but if you always use heavy or full positions, the risk will be greater. You may make ten orders and earn nine orders, but the loss of just one order may cause you to lose your principal. Our operation needs to control risks and make steady profits, rather than blindly operating and losing a lot.