In the stock market, there has always been a common investment strategy, which is to "reduce positions when high, and increase positions when low". Although it may seem simple, the actual operation is not easy, and various factors need to be considered. Next, we will explore the techniques and methods of reducing stock holdings.
There has always been a saying in the stock market: 'Reduce positions when high, increase positions when low.' It may seem simple, but in reality, it is necessary to combine fundamental and technical analysis to identify the high and low positions of the stock price and increase or decrease positions. Let's talk about the techniques and methods of reducing stock holdings.
Tips for reducing stock holdings
Reducing stock holdings is a strategy of selling a portion of stocks, taking advantage of uncertain future market conditions and adopting a strategy of buying and selling a portion of the winning stock, or taking back some funds due to a heavy position. So, when will stocks be reduced.
When does a stock need to reduce its holdings? Generally speaking, when a wave of increase exceeds one fold, 50% of the funds will be reduced when the other half of the chips can set a stop profit position on this basis. If they fall below 15% of the current price, they will all be eliminated. Otherwise, they can continue to hold until a clear sell signal is announced, or when the stock price falls below 15% of the highest price, they will all be eliminated.
Overall, the stock market often fluctuates, and choosing the right timing to increase or decrease positions can expand profits and reduce losses. How to determine when to increase and decrease positions? Firstly, it is necessary to understand the two stock market trends, and there are different strategies for increasing and decreasing positions in different market trends.
Stock reduction refers to the sale of a portion of the stocks held. There are several techniques for reducing stock positions:
1. The stock continues to rise and fall, and if someone rises sharply, the trading volume increases, and they close a large positive or negative line, it is a good time to reduce their positions;
2. If the stock price reaches a new high, but the trading volume shrinks, then the market is not good, so reduce the position in a timely manner;
3. If the stock price rises significantly in the early stage and suddenly releases a large negative line, then investors should quickly reduce their holdings;
4. After reducing positions, it is necessary to wait for the adjustment cycle to end, and do not impulsively increase positions.
Equilibrium reduction method:
Set an increase and divide the funds for reducing positions evenly into several parts. For each increase, reduce one part of the position. For example, if the increase is set at 10%, the total amount of additional funds will be 20000 yuan, with an average of 2 shares divided into 10000 yuan each.
The fund increased by 10%, with the first reduction of its position by 10000 yuan. The fund continued to rise by 10%, and the second reduction of its position still resulted in a reduction of 10000 yuan. Finally, it waited for the market to reverse. Finally, it is worth noting that the formula for fund position reduction only tells you what methods to pay attention to when reducing positions. Funds are risky investments, and you need to pay attention to techniques when investing in funds.
In summary, it is not difficult to find that reducing stock holdings is a strategy for dealing with situations where positions are too heavy and some funds are withdrawn. It is also an operation taken to ensure partial profits are lost due to the unstable future market situation. We need to pay attention to the techniques of reducing positions, which is also something we need to master in stock trading.
What should we do to reduce stock holdings?
oneAdjust according to market trends and company fundamentals: Based on changes in market trends and company fundamentals, positions can be gradually reduced to avoid risks. If the market situation is not good and the company's fundamentals change, positions can be appropriately reduced; If the market situation is good and the company's fundamentals are excellent, it is possible to increase positions appropriately.
2. Choose an opportunity to sell: When the stock price rises to a certain extent, you can appropriately reduce your holdings. This can capture the high points of the market and maximize profits.
3. Batch sales: Gradually selling stocks held over different time periods can reduce the risk of market volatility. This method is suitable for situations where there is no clear selling signal.
4. Develop a reduction plan: Investors can develop a reduction plan and execute it according to the plan.
【 EBC Platform Risk Reminder and Disclaimer 】: There are risks in the market, and investment needs to be cautious. This article does not constitute investment advice.