As the market rebounds, many of the small investors in their hands may have been trapped, but they know very little about the methods to unwind stocks. Generally speaking, they only know how to passively wait for the day when the Red Army raises the red flag to a high ground. Little do they know that those deeply trapped stocks can truly wait until the red flag arrives and escape unscathed.
The four principles of resolving conflicts:
1. Stop loss principle. The stop loss point for short-term trading should generally be controlled within 10%, while the stop loss point for medium-term trading should ideally not exceed 20%. Once it falls from the highest point and reaches the stop loss point, it should be decisively placed to avoid being passive.
2. The principle of stock exchange. Once a downturn occurs, weak stocks and underperforming stock markets are usually hit hard. So, when you are trapped, you should carefully check the types in your hands. If the performance is poor or the stock market trend is weak, you should quickly sell and switch to some types with good performance or strong trend at the same time.
3. Ostrich Rule. In theory, as long as your fate is not too bad, as long as what you hold is not a seriously problematic type, and as long as you are not chasing after the highest price in history, then you need to be prepared for a six-month, one-year, or two-year "resistance war". It is completely possible to break free or even make profits.
4. The principle of high throwing and low sucking. After a period of stock price decline, one should have a better understanding of the stock's characteristics. At this time, it is not advisable to do high selling and low buying to spread costs. Once it rebounds, it can be quickly resolved.
The best time to unwind
1. The stop loss strategy is suitable for the early stages of a bear market. Because the stock index is at a high level at this time, the adjustment time in the future is long and the adjustment amplitude is deep. Investors can decisively cut losses at this time, which can effectively avoid investment risks in bear markets.
2. The short selling strategy is suitable for the mid-term of a bear market. The Chinese stock market does not yet have a short selling mechanism, but it is an exception for individual stocks that have been trapped. Investors can sell the trapped stocks in the middle of a bear market with a clear downward trend, and then buy them at the right time when the market runs to a low level. This can minimize the losses caused by being trapped.
3. The stock holding strategy is suitable for the end of a bear market. At this point, the stock price is approaching the bottom zone, and blindly short selling and stop loss brings unnecessary risks or losses. The result of patiently holding onto the stock at this time is inevitably that the returns outweigh the risks