When opening a position for the first time, investors only need to invest a small amount of funds, and then choose opportunities to increase positions according to market conditions. If you use up the originally planned position at the beginning of the transaction, then you can only pray that the price will move in a favorable direction. If you want to actively adjust your position, you can only go against the trading plan, and this is often the beginning of tragedy.
Adding positions is a very simple and very important part of trading. Many investors think that increasing positions is very simple, but few investors can master the skills of increasing positions.
In reality, the most common method we hear about increasing positions is to increase positions with floating profits. At present, many successful investors in the market are constantly increasing their positions with floating profits, so that their original funds of hundreds of thousands of yuan have finally reached the scale of liquidation. In fact, there is nothing profound about their method of increasing positions. They believe that a certain price will go out of a unilateral rise and then start to go long, and then as long as there is a profit, they will increase their positions.
Personally, I think that this method of floating profits and increasing positions as soon as there is a profit can allow investors to obtain great returns, but the premise is that there must be a unilateral market cooperation, and it must be done in the right direction. If you increase your position, you will listen more, but you will use it relatively less!
The most commonly used method of increasing positions in the market is to continue to cover positions after losses, because continuous replenishment can dilute costs when losses occur, so that you can recover costs faster or even make profits, but this method is often not advisable.
Covering up positions when you are losing money is actually thinking that your judgment is correct, and the market can eventually move in the expected direction. However, in a sense, covering up losses is to magnify one’s own mistakes. If the market can reverse in the end, everyone will be happy. Once encountering extreme market conditions, then you may have to say goodbye to the “foreign exchange dream”
Everyone can't help asking: "You can't increase your position if you make money, and you can't increase your position if you lose money. Is it wrong to increase your position?" The answer is obviously no. In fact, there is nothing wrong with increasing positions with floating profits or losses, but the degree and timing must be accurately grasped.
First of all, increasing positions is a very important part of fund management. One of the most important principles of increasing positions is to control positions. If the position is too heavy, the error tolerance rate is very low. This method does not allow losses, which greatly increases the difficulty of making profits. If the market fluctuates slightly in an unfavorable direction, there may be a large loss. Even if the final judgment is correct, it is difficult to change the loss. ending. Therefore, the increase in positions must be moderate, and the total position cannot exceed the planned amount before entering the market. Once again, it is correct to increase the floating profit and increase the loss, but we must pay attention to the "heat".
Secondly, the timing of adding positions is very important. For example, when you are long, when the point breaks through a platform, then this is a position increase point, and you can increase the position in an appropriate amount;
When the point falls to the support level, if the funds allow, the position can be properly covered. At the key position of the market, the probability of success in adding positions is higher, which can improve the efficiency of adding positions. Therefore, adding positions is a science, not just adding based on feeling.
Finally, add positions in batches. For example, some investors plan to invest 40% of their funds when they start trading, but they will use up all 40% of their funds when they open a position. Once the market develops in an unfavorable direction, they can only be forced to increase their positions. Violated the previous trading plan.
In fact, when opening a position for the first time, investors only need to invest a small amount of funds, and then choose opportunities to increase positions according to market conditions. It's like a battle, you can't put all your troops into it, you have to keep a reserve team, and then put all your troops in when the decisive battle comes. If the investor uses up the originally planned position at the beginning of the transaction, then he can only pray that the commodity price will move in a favorable direction. If he wants to actively adjust the position, he can only go against the trading plan to increase the position, which is often It is the beginning of tragedy. Therefore, it is the homework that investors must do well to make a plan at the beginning of the transaction, build positions in batches, and strictly implement them.
Generally speaking, the seemingly simple operation of increasing positions actually contains great knowledge. If you use it well, you can get twice the result with half the effort, but if you don’t use it well, it will speed up your "death". Therefore, mastering the skills of increasing positions can make it easier for investors to make profits and realize financial freedom as soon as possible.
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