Low position replenishment requires maintaining a good mentality and continuously improving operational skills in order to prepare early for various potential pitfalls, cope with them with ease, and take the initiative in replenishment operations with moderation, ultimately achieving less hedging in bear markets and no empty opportunities in bull markets.
One is the overall market: replenish when stable, and 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 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.
The third is performance: good results are compensated, and bad results are not compensated.
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.
The fifth is the rise and fall: compensate when there is a big drop, and do not compensate when there is a big rise.
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 lucrative profits 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: make up when making a pullback, make up when making a pullback.
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.
In general, as long as investors follow the above principles and techniques to make low-level replenishment, the success rate of the operation will be relatively high. However, in actual trading, some main players may also adopt targeted "deception tactics" based on the common characteristics of investors to numb investors who are eager to replenish their positions. Some investors with low vigilance may accidentally fall into the trap carefully planned by the main players during the replenishment operation.
When individual investors replenish their positions, they need to pay attention to the following two situations:
One is the 'fake disk'
Whether in the process of rising or falling stock prices, there are often a large number of "commissioned buying orders" appearing in the real-time displayed five tier buying orders, but their commissioned prices are often several price points lower than the current price. In fact, the accumulated "commission buying orders" are not the orders that the main force really wants to buy, but just to attract retail investors and lure them to follow the trend in order to sell smoothly. These "commission buying orders" are actually "fake orders". Careful investors only need to observe a little to discover that as long as it is a "false order", once the current price falls near the "commission price", the main force will quickly cancel the order and repeatedly engage in such "false commission" operations.
Response methods:
First, pay attention to whether there are large orders for buy one, buy two, buy three, or even buy four, buy five and other commissioned positions. If so, pay attention to whether these buying orders will be cancelled when the prices are close. If it is withdrawn, it means it is a "fake disk", otherwise it is a "real disk". Investors should be cautious when conducting margin buying operations for "fake stocks".
The second is' knocking on the plate '
Compared to "fake deals" that only aim to lure retail investors and do not actually make transactions, "knock on deals" are real transactions. It is worth mentioning that although "knock-out trading" is conducted at several price points higher than the current price and in large quantities, the main players often buy in large quantities while also selling in large quantities, which is a typical knock-out nature, with the same purpose of attracting market attention.
Response methods:
Pay attention to whether there are large selling orders in the buy one, sell two, sell three, even sell four, sell five and other entrusted positions. As long as there are not many entrusted selling orders, but the instantaneous trading volume is high, it can be concluded that the main force is buying while also entrusting, engaging in counter trading, just not wanting ordinary investors to discover it. Investors must also remain vigilant when conducting margin buying operations for "knock on trades".
There are three disposal methods for high-level chips with 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 trend of the stock market over the years has repeatedly proven that filling positions at low levels is not only the correct choice after deep hedging of chips, but also an effective measure to prevent short selling after a bull market starts. Of course, the prerequisite is the correctness of the buying operation, that is, there is no "problem" with the chips themselves.
There are three main reasons for this:
One is that when there is no money to make up for the high position purchase, the position is already full;
The second issue is that although there are funds left, there is still concern about further decline;
The third issue is that they have funds and want to replenish their positions, but do not know how to do so.