What to do if you are trapped? Let's take a look at the universal untrapping rules:
1. Adopt the method of not selling and not losing in the face of changes. Once you are trapped in a position, as long as you haven't sold it, you cannot determine that you have lost everything.
2. Use the method of adjusting the position to operate. That is, first stop loss and settle, and then buy in again at a lower price to reduce or offset the losses from untrapping at the upper level.
3. Use the method of cutting losses decisively. That is, sell all the holdings to avoid further losses from a continued price decline. This untrapping strategy is mainly suitable for short-term investors with speculative purposes. Because in a bearish market, the longer short-term investors hold, the greater the losses will be.
4. Adopt the method of averaging down. That is, buy more as the price falls, thus lowering the average cost, in anticipation of a price rebound for profit. However, this approach must be based on the premise that the overall investment environment has not worsened and that there is no situation where the market has shifted from a bullish to a bearish one; otherwise, it is easy to fall into a predicament of being increasingly trapped.
5. Investors who are lightly trapped can use the rebound market to exit or reduce positions at high points;
6. Investors who are heavily trapped can also partially reduce their positions at high points, so that they can take the initiative psychologically and financially in the next wave of the market.
7. If the purchase price is in a downtrend, once the downtrend is confirmed, one should immediately stop loss and not hold onto fantasies. Any hesitation and doubt may lead to deep losses.