Additionally, stop-loss is just one aspect of risk control in trading. The strategies used for large funds differ greatly from those for small funds. Large funds typically use hedging for risk management because they have to consider liquidity issues; the market cannot absorb large orders in the short term, so technically, stop-loss cannot be executed.

But for retail investors with small amounts of money, just stick to stop-loss honestly. In fact, large fund traders are very envious of the flexibility that comes with small funds—don’t give up this advantage.

The main problem for many retail investors is that, despite only having a small amount of money, they somehow adopt the attitude of institutions—always talking about value investing, analyzing fundamentals, holding on without selling, and refusing to cut losses even if it means taking heavy losses.