The crocodile law is also called "crocodile effect", which is one of the technical laws of economics trading. It means: assume that a crocodile bites your feet, if you try to break free of your feet, crocodileYou will bite your feet and hands at the same time.The more you struggle, the more you are bitten.Therefore, in case the crocodile bites your feet, your only way is to sacrifice one foot, which is a bit like a tiger anger.This article LTG Goldrolk to share with you the application of crocodile laws in investment ~
Stop loss is a basic skill for securities investment.It is also a useful and simple trading rule for the US investment industry , which is the "Alligator Principle".Before entering the market, all the world's successful securities investors are repeatedly training the degree of understanding of this principle.
Due to the inherent weakness of human nature, it is always unconsciously affected our operations, and a big loss is enough to lose the first 99 profits. Therefore, strictly observing the discipline of stop loss has become the only law to ensure that investors survive in the risk market.
Volatility and unpredictability are the most fundamental features of the market. This is the basis of the market and the reason for the risk of transactions. This is an unchanged feature.There is no certainty in the transaction . All analysis and predictions are just a possibility. The transaction based on this possibility is naturally uncertain.Expansion, stop loss occurs.
Stop loss is naturally generated by humans in the transaction process, not deliberately producing, it is an instinct response of investors its own.sex.Successful investors may have their own different transactions , but stop loss is a common feature of ensuring their success.World Investment Master Soros said that investment itself is not risky, and out of control's investment is risky.Learn to stop loss, do not fall in love with losses.The stop loss is far more important than profit, because the capital protection is the first place, and the profit is the second place. The principle of reasonable stop loss is quite effective.expand.
It is important to understand the meaning of stop loss, however, this is not the final result.In fact, investors have set up stop -loss and not executed examples abound. The tragedy of being swept out in the market is staged almost every day.Why is stop loss so difficult?There are three reasons: first, lucky psychology.Although some investors also know that the trend has been broken, because he is too hesitant, he always wants to take a look and wait, leading to a good time to miss the stop loss.If you do n’t decide, the stop loss of frequent errors will leave investors ’loud memory, thereby shaken the determination of investors’ next stop loss; third, the implementation of stop loss is a painful thing, a bloody diluteThe process is the challenge and test of human weaknesses.
In the capital market and other capital markets , investors should learn the experience of crocodile predation, that is, waiting, waiting, and patiently; I have to wait until the time comes, and take a bite.Then he insisted, persisted, and then insisted until he ate delicious dishes.This is a long -term investment thinking, don't pay too much attention to temporary gains and losses.The busy people may not get the return they deserve.
