There are usually three ways to deal with chips bought at a high position after deep hedging: one is to stop loss and sell; Secondly, holding the shares without any change; The third is low-level replenishment. In general, as long as there is no qualitative change in market policies and individual stock fundamentals, stop loss selling is a major taboo in operation, holding still is a neutral strategy, and filling positions at low levels is the best strategy.
The "Eight Principles" for low-level replenishment can achieve the expected "magical effect" through correct replenishment operations. It is necessary to enhance the pertinence of daily operations, properly solve problems such as "no money to replenish", "no courage to replenish" and "unable to replenish", and grasp the principles of actual replenishment operations, firmly grasping the initiative of replenishment operations in one's own hands. The principles that need to be grasped in the replenishment operation can be summarized into eight items, namely the "Eight Supplements and Eight Non Supplements" principle:
One is the overall market: replenish when stable, do not replenish when unstable
If the entire market is in the initial decline stage after reaching its peak, and the market has neither stopped falling nor stabilized, replenishing positions will only increase the "hedging" of chips and accelerate the "shrinkage rate" of market value.
The second is the stock nature: familiar supplements, unfamiliar supplements
If you are not familiar with the fundamentals and characteristics of the stocks participating in the replenishment, it will increase the blindness of the replenishment operation, and you will have countless ideas and lack confidence. Such a restocking would certainly not yield ideal results.
Thirdly, performance: good compensation, no compensation for bad performance
Generally speaking, investors who are preparing to replenish their positions should first choose companies with good performance to replenish their positions. Companies with performance problems should not be allowed to increase their positions in principle. Although it appears from the final outcome that some problematic companies may experience a significant increase in stock prices, it is still not advisable to participate in the replenishment of such problematic companies from a conservative perspective.
The fourth is the trend: replenish when the market starts to rise, and do not replenish when the market breaks
From a technical perspective, replenishment emphasizes the principle of prudence. Therefore, for companies that have been in an upward trend for a long time and have a stable secondary market trend, when their stock prices suddenly turn or even show signs of breaking through, they should give up replenishment. On the contrary, for companies that have been declining for a long time and performing poorly, they can follow up promptly when there are signs of an upward trend.
Number five is rise and fall: compensate for sharp drops and not compensate for sharp rises
When it comes to replenishing positions, it is generally advisable to buy when the related variety experiences a significant drop or even a sudden drop. It should be noted that some companies with huge gains and high profits [0.38%] often take advantage of market trends to initiate shipments. Investors who cannot identify clearly and do not replenish their positions improperly may also become unfortunate high-level buyers when these stocks fall sharply. So, there is a prerequisite for compensating during a major drop and not compensating during a major rise, which is that the historical increase cannot be too large.
Six is profit and loss: make up for positive differences and not make up for differences
For previously sold chips, it is important to adhere to this principle when replenishing positions. When the sold chips experience a decline and there is a positive profit margin, it is necessary to replenish the position. On the contrary, when the sold chips show an increase and there is no opportunity for a positive difference to be recovered, it is not advisable to replenish the position. If you really want to replenish your position, you also need to be patient and wait for a period of time, and then replenish your position after the stock price falls back.
Seventh is rhythm: replenish during callback, do not replenish during reverse draw
On the basis of complying with the above replenishment principles, attention should also be paid to the rhythm of entry and exit during actual replenishment operations. Especially, it is important to buy stocks at low prices during the pullback or decline process, rather than rushing to raise funds during the rebound or rise.
Number eight is the position: light positions can be replenished, heavy positions cannot be replenished
When replenishing positions, it is also important to pay attention to the proportion of a single product in the total market value of the account, and follow the general requirement of "controlling positions and making good combinations" to replenish positions. When the position of a single variety has not reached the upper limit, replenishment operations can be carried out; otherwise, replenishment operations should not be carried out. Even if one has a special preference for a certain variety, this principle must still be adhered to.
The correct replenishment operation of low-level replenishment "three major techniques" requires not only adhering to the principle of "eight restorations and eight non restorations", but also grasping the corresponding replenishment techniques, mainly reflected in three aspects:
Firstly, in the selection of replenishment targets, it is necessary to "abandon raw materials and choose mature ones"
The correct approach is to never touch unfamiliar stocks, especially the big picture stocks on the rising list, including strong stocks with large gains and hot stocks with rapid gains, when conducting replenishment operations. At the same time, there are familiar "self selected stocks" that can be bought in moderation, bought at low prices, and replenished according to the plan, especially those that have been bought before but later trapped or even deeply trapped.
Secondly, in terms of timing for replenishing positions, it is necessary to "abandon rising and choose falling"
This type of replenishment method is exactly the opposite of the "chasing the rise and killing the fall" method. Investors may feel "unhappy" before and after replenishment, but in the end, this is a better time for replenishment operations. The "chasing after gains and killing losses" style of operation is prone to making big mistakes and is highly likely to turn the originally low-level replenishment operation into high-level chasing after gains. The correct approach is to "abandon the rise and choose the fall" when replenishing positions, or set a "buy point" in advance based on the overall market level, and replenish positions during the decline after the "point"; Or set a "buy price" in advance based on the individual stock price, and then replenish the position on dips during the pullback after the price is reached.
Thirdly, in determining the quantity of replenishment, it is necessary to "abandon the heavy and choose the light"
In the determination of the amount of replenishment, some investors often make extreme mistakes: full position, one-time replenishment of a single variety. As a result, when the market rises and the stocks replenished do not rise, or when the market rises sharply and the stocks replenished rise slightly, it will affect mentality and even operations. The correct approach is to ensure the implementation of "two supplements": first, the "matching" between different varieties, generally using the "equal distribution method" (distributing the replenishment quantity evenly among several varieties) to control the replenishment limit of a single variety; The second is the internal "replenishment" of the same variety, usually using the "batch method" (arranging replenishment batches reasonably within a single variety) to determine the specific quantity of replenishment each time.
