Replenishment is a passive coping strategy after being trapped, which is not a good way to break free in itself, but it is the most suitable in certain specific situations. There is no best method, only the most suitable method. As long as used properly, it will be a powerful tool for turning defeat into victory; If not used properly, it can also become a self imposed cocoon.

The essence of replenishment: We need to be clear that replenishment is an investment technique, a tool, not a goal. The purpose of investment is to obtain returns with minimal risk, so it is only useful when replenishing positions can help investors achieve the above goals, otherwise it must be abandoned.

Target audience for replenishment: In terms of analytical ability, investors who can make accurate judgments on the direction of the next week are required to use replenishment; In terms of rhythm, adding positions is suitable for investors who combine short and medium term investments; In terms of the amount of funds, replenishment is suitable for larger funds. If a larger position has already been used, it is not advisable to consider replenishment temporarily, or when the ratio of reserve funds to current funds reaches or exceeds 1:1, it can be appropriately replenished.

Precautions for replenishment:

1. Before deciding to adopt this technique, one must be very familiar with the rules of the variety to be replenished and the changes in the trend of the variety at each stage, so as to know oneself and know the enemy - 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 technique can only be used when the fundamentals of the market support the trend to move out of a one-sided trend. If it is used during a period of volatility or reversal, it is often not worth the loss.

3. Always realize that replenishing a position is just a technique, and replenishing a position is for making money. Don't replenish a position just to replenish it.

You must know the timing of restocking!

1、 The market has not stabilized and there is no need to replenish positions

When the market is in a downtrend or experiencing a rebound, it cannot replenish its position, as further declines will drag down the downward trend, and only a very small number will go against the trend and strengthen. The best time to replenish positions is when the index is at a relatively low level or has just reversed upwards. At this point, the potential for an increase is enormous, and the possibility of a decrease is minimal, making it safer to replenish positions.

2、 Weakness not compensated

Especially for those where the market rises but doesn't rise, and when the market falls, it falls along with it. Because the purpose of replenishing the position is to use the profits from the stocks that were later replenished to make up for the losses that were previously trapped. Since this is the case, there is no need to limit oneself to replenishing the original trapped stocks. It's not crucial what variety to replenish the warehouse with, the key is to obtain the maximum profit from the replenished variety, which is the key consideration. So, if you want to replenish your position, you should replenish the strong, not the weak.

3、 Those that have skyrocketed in the early stage will not be replenished

There were many leading figures in history who, after emitting a brief dazzling light, stepped into the darkness of the long night. Investors who encounter such situations will only make more and more adjustments, and the deeper the adjustments, they will eventually get stuck in a quagmire.

4、 Seize the opportunity to replenish inventory and strive for success in one go

Never replenish inventory in segments or levels. Firstly, ordinary investors have limited funds and cannot afford multiple leveling operations. Secondly, replenishing a position is a remedy for the previous erroneous buying behavior, and it should not become a second erroneous transaction in itself. The so-called step-by-step replenishment is a defense for careless buying behavior. Multiple restorations, the more you buy, the more you end up in a situation where you cannot extricate yourself When opportunities arise, we must seize them well. In order to make steady profits, we must have a trading strategy and technique that suits us, combined with an effective mindset. We should stop loss and take profit, and not miss out on future opportunities due to temporary losses.