The Law of the Crocodile is as follows:

Suppose a crocodile bites your foot, if you use your hand to try to free yourself, the crocodile bites your hand at the same time, and the more you struggle, the more you are bitten. So, in case a crocodile bites your foot, the only way out is to sacrifice one foot. The crocodile law means stopping losses in time and looking at the big picture.

"Crocodile law" is one of the technical laws of economics trading, also known as the "crocodile effect", which means: Suppose a crocodile bites your foot, if you use your hand to try to break free of your foot, the crocodile will be bitten at the same time your foot and hand. The more you struggle, the more you are bitten. So in case the crocodile bites your foot, your only recourse is to sacrifice one foot, kind of like the Tiger's Fury.

Because of the inherent weaknesses of human nature, which unconsciously affects our operations from time to time, one big loss is enough to lose the previous 99 profits, so strict adherence to the stop-loss discipline becomes the only law to ensure that the investor's survival in the risky market.

Extended information:

Stop loss is a basic skill in securities investment. It is also a useful and simple trading rule in the American investment world, which is the "Alligator Principle" (AlligatorPrinciple). All the world's successful securities investors before entering the market, are repeatedly trained to understand the extent of this principle.

In the stock market, for example, when you find yourself trading against the direction of the market, you must stop immediately, without any delay, without taking any chances.

When you make a mistake, you have to stop immediately, no more excuses, expectations, reasons or take any other action, otherwise you will get into even more trouble and mistakes, resulting in more serious consequences.

The Law of the Crocodile also reveals that we must learn to give up. In life, sometimes bad situations will come unexpectedly, so that we are caught off guard, hand in hand, and even suffered a serious loss, this time to be at peace, timely and proactive to give up the local interests of the overall interests of the most sensible choice. The wise man said: "The two evils are weighed to choose the lesser, the two benefits are weighed to choose the greater." This is the essence of giving up.