The trap of adding positions to floating losses: beware of the risk of liquidation

On the road of investment, we often face the choice of various strategies. Among them, the strategy of "adding positions to floating losses" seems simple and direct, but it actually hides risks. The so-called "adding positions to floating losses" means that when the investment has floating losses, investors choose to increase their positions and try to spread the losses by reducing unit costs. However, this practice is often accompanied by huge risks.

First of all, we must understand that the market is full of uncertainty. Although adding positions during floating losses may wait for prices to rise and recover losses, the probability of this is not high. What's worse is that once the market continues to run in the opposite direction, investors will face huge losses and may even be liquidated.

Secondly, adding positions to floating losses is also a huge test for investors' mentality. When positions have floating losses, investors often feel anxious and uneasy. Adding positions at this time is undoubtedly increasing this psychological pressure. Once the market trend is not as expected, investors may make wrong decisions due to an unbalanced mentality, further exacerbating losses.

Therefore, we strongly recommend that investors be cautious about the strategy of adding positions to floating losses during the investment process. On the contrary, when there is floating profit in investment, it may be a wiser choice to increase the position appropriately. This can not only lock in part of the profit, but also get more benefits when the price rises.

Finally, we remind investors that investment is something that needs to be treated with caution. Before making any investment decision, you must fully study the market, understand the risks, and formulate a suitable investment strategy according to your actual situation. At the same time, you must maintain a good attitude and avoid making wrong decisions due to emotional fluctuations.

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