What is Cut Loss?

What is Cut Loss?

Cut Loss is a decision to sell an asset in order not to lose more. A Cut Loss occurs when the price of that asset drops to a set point. Each person's Cut Loss point setting is different. It depends on how much risk you can take, which Cut Loss is intended to limit the loss that may occur to that asset, but Cut Loss may have a negative effect if accidentally the price of the asset that Cut Loss goes that may suddenly bounce higher after Cut Loss, so before Cut Loss should analyze the price trend well in order to prevent Cut Loss in a loss of benefit

So when should you cut loss?

If it's a short-term investment, you should set the Cut Loss point early in order to be able to move to invest in other assets in time. But if it is a long-term investment, the Cut Loss point may be set a little later because long-term investments are volatile. that is less if compared to short-term investment

What is the difference between Cut Loss and Stop Loss?

The Cut Loss is part of the Stop Loss, the two differ in that the Stop Loss is made when the profit is seen to decrease. If trading when the profit is reduced But not yet reached the point of loss, but Cut Loss is trading when the loss has already occurred. but want to stop losing more

So what to do if you don't want to Cut Loss?

Investors must carefully study the trend of the asset to be invested in before trading. If chosen well, it will reduce the chance of Cut Loss.

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