How to deal with the unexpected situation of stop loss setting?
In conducting foreign exchange operations at will to stop setting, foreign currency normally stop plan can be implemented, but does not exclude the market in some emergencies, such as market appeared suddenly jump empty, skip his set stop-loss price, or the lack of liquidity in the market exchange stop plan encountered obstacles, this kind of circumstance should be how to avoid the loss?
For EXAMPLE, IF THE CLIENT IS LONG AT $3,745, THE PLAN TARGET IS $3,820, THE PLAN STOP LOSS IS $3,720, AND THE PLAN PROFIT/LOSS RATIO IS 3:1.
However, due to the sharp fall of the overnight external plate, after the market jumped over its stop loss to 3653 yuan sharply lower open, making customers suddenly at a loss, after a struggle, the customer or in the futures price rebound to 3670 yuan stop loss.
After that, the futures price began a sharp rebound.
This situation is a classic snap stop loss.
In this case, investors face great mental pressure, ideological struggle is also very intense.
On the one hand, the price has reached the stop-loss level, so it is planned to stop the loss. On the other hand, due to the excessive overfall of the price, the futures price may rebound sharply at any time. If the stop-loss may be at the low level, if the loss is not limited, there is the possibility of continuing to fall.
All kinds of ideological struggles seriously interfere with the normal decision-making thinking of investors, at this time if the price continues to fall slightly, at any time may lead to investors to make psychological stop loss.
In the example above, the customer’s loss can be divided into two parts.
That is, total loss = planned stop loss + sudden stop loss =(3745 yuan -3720 yuan)+(3720-3670)=25+50=75 yuan.
If this operation for a long time, investors are difficult to earn money.
To do a good job of forex stop-loss in emergencies, investors need to know enough about their choices, manage their own funds reasonably, increase their judgment on trading, improve their trading plans, and fully consider the possibility of various accidents when making plans.
The last and most important point is that you should not panic at any time. Even if you are in an accident, if you can keep rational and calm, you can still try to minimize your loss.