How to Protect Your Capital - The Most Powerful Cryptocurrency Exchange Platform

Leaving the market,

Whether it’s abandoning a losing position,

Or capturing profits,

Both are key to making money in the market.

In fact,

The golden rule of trading is: cut losses and take profits.

If you want to become a successful investor or trader,

Then escaping from losing investments or trades is very important.

Most people only consider entering the market,

But those who fail to succeed,

Can only become wealthy after mastering the methods of leaving the market and adjusting positions.

Jesse Livermore: “Investors are some big gamblers,

They place bets,

And stick to them.

If the bet goes wrong,

They will lose everything.”

Stop-loss setting,

Is setting the maximum loss you are willing to tolerate,

Which is the risk,

Known as initial risk R.

After many trades,

You will find,

Your average loss is about half of R,

That is 0.5R.

If the R value is very small,

Then you might get a very large R multiplier profit.

However,

Small stop-losses also increase the probability of losses,

Thereby reducing the win rate of your entry method.

If your win rate for entering the market is not better than a random system,

Then you should set the stop-loss above the market noise.

Identify the maximum adverse deviation of all profitable trades,

And take a percentage of this amount as your stop-loss.

Methods of stop-loss include: fixed amount stop-loss,

Partial retracement stop-loss,

Volatility stop-loss,

Standard deviation of volatility stop-loss,

Channel or moving average stop-loss,

Support and resistance level stop-loss,

Time stop-loss, as well as free stop-loss and psychological stop-loss.

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