When will stocks be replenished?
Margin call refers to investors buying the same security on top of holding a certain amount of it. Replenishing a position is a buying behavior carried out in order to spread the cost of a stock that has fallen due to being trapped by a falling stock price. 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 method in certain specific situations.
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 method in certain specific situations. There is no best method in the stock market, only the most suitable method. As long as it is used properly, it will be a powerful tool for turning defeat into victory; If not used properly, it can also become a breeding ground for self imposed constraints. Therefore, the editor has specially prepared some replenishment techniques for everyone in stock market trading, to find the right timing for replenishment, hoping to provide some help to everyone.
1、 Buying techniques for replenishing positions
For strategic replenishment, the number of stocks purchased can far exceed the number of shares held in the original hands, which can minimize the cost of holding. For example, an investor buys 1000 shares of stock at a price of 10 yuan. When the stock drops to 5 yuan, if the investor buys another 1000 shares, the average cost of buying the stock is 7.5 yuan. Investors must wait for the stock to rise by 50% in order to make a profit, which is relatively difficult. However, if investors buy 6000 yen when the stock drops to 5 yuan, the average holding cost is 5.71 yuan. As long as the stock rises by 15%, investors can make a profit.
For tactical replenishment in short-term trading, the number of stocks bought should be equal to or less than the number of shares held in the original hand. The purpose of doing so is to effectively control risks. Because tactical replenishment is mainly aimed at obtaining short-term profits, it does not consider the investment value of individual stocks or whether the stock is oversold or deeply invested, nor does it focus too much on the overall trend of development. Therefore, this replenishment strategy carries certain risks while quickly earning profits, and is not suitable for full or heavy positions. Secondly, tactical replenishment often uses the intraday "T 0" strategy to improve efficiency. If an investor buys more stocks than they originally held, they will lose the favorable conditions for "T 0" trading because they can only sell the maximum number of stocks they originally held on the same day.
2、 Selling techniques for replenishing positions
1. Complete sell out method. This is usually used for strategic replenishment strategies. When investors replenish their positions, they are not affected by short-term fluctuations in stock prices and firmly hold onto their shares until the stock price rises above the average cost, then sell at high prices.
2. Margin buying method, also known as profit making selling method. This is usually used for tactical replenishment strategies, where investors' replenishment is only for the direct purpose of profit, and whether or not to unwind is not a key focus. Sometimes, during intraday "T 0" style replenishment, it is possible to sell within a profit margin of a few cents and a few minutes of trading time.
3. The breakeven selling method, also known as the profit making selling method. This replenishment strategy is not aimed at profit, it is mainly to rescue more funds. For example, an investor is trapped in 1000 shares at 10 yuan and fills in 1000 shares at 5 yuan. When the stock price rises to 6 yuan, a stagflation phenomenon occurs and the investor begins to build a portfolio. Originally, investors could have made a profit by selling 1000 shares at a margin of 5 yuan, but in order to rescue more funds and make up more positions at lower levels in the future. The method of selling 1000 shares of stocks priced at 5 yuan and 200 shares of stocks priced at 10 yuan was adopted, and all 1200 shares were guaranteed to break even. Although investors may appear to have temporarily lost profits on the surface, they have added 20% more funds to their books without incurring losses. This allows them to buy more cheap stocks after the stock price drops, achieving the goal of making profits in the future and laying the foundation for greater profits.
3、 The timing of buying and selling for replenishment
Stock investment must first determine the form of stock price movement before considering strategies.
There are three types of stock price trends, namely: upward trend, downward trend, and consolidation trend. The characteristic of an upward trend is that one wave after another rises, and both the bottom and top of the stock price continue to rise; The downward trend is the opposite, with the bottom and top continuously falling, and the trend gradually decreasing; The consolidation trend means that the stock price movement range remains within a certain range, with the high and low points basically unchanged.
The replenishment should be carried out when the stock price is in an upward trend or consolidation trend, so that the profit-making party has a certain degree of confidence. If the replenishment is chosen when the stock price is in a downward trend, it will only become more and more complex. If you buy overpriced stocks at the end of a bull market and replenish your position during its continuous decline, you often suffer heavy losses.
