1. The essence of adding warehouse

Firstly, it should be clarified that adding positions is an investment technique. It is a tool, not an end in itself. The purpose of investment is to obtain returns with minimal risk.

Therefore, only when adding positions can help investors achieve the above goals, it is of practical value. Otherwise, it must be abandoned. This is just like what the Diamond Sutra says, all laws are metaphors, and laws should be abandoned, let alone illegal ones.

2. Applicable objects for warehouse addition

In terms of analytical ability, at least investors who can make accurate judgments about the direction of the next week are required to use the strategy of adding positions (which requires investors to not only look at charts, but also pay attention to fundamentals, weather, policies, etc.). In terms of operational rhythm, adding positions is suitable for investors who combine short and medium periods. In terms of capital volume, adding positions is suitable for larger funds. When 80% of the positions are available, adding positions should not be considered, or when the ratio of reserve funds to current funds reaches or exceeds 1:1, it is suitable for the operational skills of adding positions.

3. Why invest in additional warehouses instead of opening them all at once

There are usually several situations where adding inventory is necessary:

(1) If the funds are too large and enter the market at once, it is likely to be discovered. Taking Strong Wheat as an example, if it opens for more than 150 yuan at once and continues to do so for several consecutive days, it is easy to be targeted and eaten up by institutions. At this time, it is necessary to adopt the technique of breaking down the whole into small parts and adding positions.

(2) When changes in fundamentals are discovered but the technical aspects have not yet been reflected - as is well known, speculative markets are not always rational, often have an emotional side, such as when the fundamentals are good, the graph often needs to shake again and may even fall a little, and vice versa. At this point, if you want to occupy a favorable position but are unwilling to take on more volatility risks, you need to adopt the technique of investing in stages.

4. Use of additional warehouse

Adding positions is usually done in a pyramid style. Taking long as an example, buying a portion at the bottom, such as 80 lots, and then buying another 60 lots when the market reaches a certain level. As the market rises again, buying another 40 lots, and so on.

In this way, because the quantity of buying at low levels is always greater than that at high levels, one can always ensure that their holding cost is lower than the market average price. When it is believed that the market is about to turn, it is sufficient to level out once or in two stages - pay attention to leveling out as quickly as possible when leveling out.

5. Precautions for warehouse addition

(1) Before deciding to adopt this technique, one must be very familiar with the rules of the variety to be operated and the changes in one's mentality at each stage of the variety. To achieve this, the tracking of the variety must have at least one process from rising to falling or from falling to rising.

(2) This method can only be used when the fundamentals support the variety to break out of a unilateral trend. If it is a volatile trend or a reversal, it is often not worth the loss.

(3) We must follow the principle of pyramid to ensure that our costs are lower than the market.

(4) Adding positions is often combined with rolling opening and active locking.

(5) Always realize that adding positions is just a technique, adding positions is for profit, don't add positions just for the sake of adding positions.

6. Method of adding warehouse

(1) Olive shaped warehouse expansion method

Assuming that the price is about to rise, buy with a small amount of funds first. Once profitable, do not close the position, but buy in large quantities with several times the amount of the first transaction funds; If the price continues to rise, it is possible to invest all the remaining funds into it, with the additional funds being lighter at both ends and heavier in the middle.

(2) Pyramid incremental method

The most commonly used trading method in the futures market. That is, first buy a fixed position at a certain price, and when the price rises to a certain extent, buy with less funds than the first position. If the stock price continues to rise, then buy with a smaller position than the previous one, and so on, gradually reducing the amount of additional funds.

(3) Inverted Pyramid Boosting Method

That is, the first time to test buying with a smaller position, if the market rises and investors feel good, then the next time to buy more chips than the first time, and so on, increasing the amount of capital step by step.

(4) Divide equally and add warehouse method

Before trading, the invested funds are evenly divided into several equal parts. When the market rises step by step as expected, the funds are gradually increased by the same amount each time.

(5) Probabilistic trading method

This method establishes the standard of profitability on the basis of success rate. There is no systematic fund management method of adding or subtracting positions in batches on a certain stock, resulting in either stop loss or take profit, both completing one round of trading in and out at once. For example, if an investor is bullish on a certain stock, they will buy a fixed position in the stock. If they reach the stop loss level, they will clear their position and leave the market. If they reach the target level, they will take profits. This applies to diversified participation in multiple stocks.

(6) The pursuit method - also known as the Martingale system

It was originally used in casinos as a roulette wheel, and its basic principle is: if you lose money, you need to double your bet, and if you win money, you need to restore your bet to its original amount. This will ultimately result in you gaining profits. This investment method is suitable for comparison in large upward and downward channels.

(7) Anti Madinger Law

Starting from a one unit ratio, double the position after each win, but return to a one unit ratio position after each loss. The advantage of this strategy is that it has lower risk and the increased position is based on winning money, which can keep the account funds safe. The disadvantage of this method is that the maximum position will inevitably result in losses! This investment method is relatively conservative and can be used at both the top and bottom.

(8) Winning money plus warehouse method

You start with a few proportional units, reduce your position by one unit after each stop loss, and increase your position by one unit after each win. Gradual increase in holdings!