1. Tips for batch building;
In the investment process, reasonable position building is the basis for reducing costs and maximizing returns. How to build positions reasonably? What are the building skills?
1. Batch building is an unbreakable principle.
When it comes to building positions, investor friends often overlook a principle, which is batch building. They often feel that the funds are not much, and one-time buying is simple and convenient; of course, selling is also settled at once. Generally, such operations have inherent flaws; once the decision is made, there is no room for recovery.
If it is batch building, it is very likely to absorb funds at a lower position, while diluting costs and capturing very good 'prey'. Similarly, the principle applies to batch reduction, as it can ensure considerable returns while controlling risks. Overall, batch building or reduction.
The benefits of holding are as follows:
1. Avoid misjudgments caused by 'false short' and 'false long';
2. Control risks while reducing building costs;
3. Control risks while ensuring investment returns.
Of course, 'batch' also has its applicable range. Batch building or reduction is based on a stable market trend, excluding sudden situations like skyrocketing, plummeting, or flash crashes.
2. Batch building skills.
Batch building method: index building method, pyramid building method, and equal division building method.
Index building method, the general way of building positions is to continuously increase buying intensity as prices decline and continuously decrease as prices rise.
Layout positions.
For example, if the target being laid out experiences a pullback during the upward process, the building funds can be divided into ten equal parts. The first building is 1 part, the second is 2 parts, and the third is 4 parts; if laying out during the upward process, it can be arranged from large to small, i.e. 4 parts, 2 parts, and 1 part. In short, follow a certain index function layout. This building method will increase the amount of added funds exponentially over time and must be used cautiously.
Pyramid building method, the principle of building positions is similar to the index building method. As prices decline, the buying intensity increases continuously, and as prices rise, the position layout decreases continuously.
However, it is worth noting that during the building process, the intensity of the two subsequent additions can be very different, generally following the principle of arithmetic progression. That is, in the process of chasing up the subject matter, it follows 30%, 20%, 10%... Of course, if the subject matter experiences a pullback during the upward process, the addition follows 10%, 20%...
This building method is suitable for capturing hot topics with good heat, second only to high-quality targets among leading topics.
Equal division building method, after equally dividing the funds, when building positions in a favorable trend, equal parts are used to participate in building; if a replenishment opportunity is anticipated, it is also equally divided for intervention.
Given that the method is relatively mild, it is suitable for risk-neutral and risk-averse investors. It is especially suitable for high selling and low buying in volatile markets.
Three, key points to note
Some key points to note during the position building process can be summarized as 'four points': stop-loss point, take-profit point, historical low point, and cost point. The stop-loss point is set to prevent misjudgments or other unexpected events. The stop-loss point is often set below the cost price, within the range of acceptable losses, and must also consider the bull and bear market trends of the subject matter. In a bull market, the acceptable loss range can be appropriately expanded; in a bear market, it can be narrowed. The take-profit point is a safeguard for protecting gains and a tool to prevent greed. It should be set during the phases of stagnation and decline, and of course, must be above the cost point. As for the historical low point, it is relatively easy to judge, as it is clear from the trend.
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