Let's talk about a strategy for covering positions on the decline!
The "covering positions on the decline" strategy is a way to reduce the cost of holding positions, but there are also many risks to consider.
1️⃣Fund management: There needs to be sufficient funds to cover positions. If the market continues to fall, covering positions will quickly exhaust funds. Without sufficient financial support, it may not be possible to continue covering positions, and thus the cost cannot be effectively diluted.
2️⃣Market trends: In a bear market or a continuous decline, covering positions may lead to greater losses. It is necessary to have an accurate judgment of market trends, otherwise covering positions may only continue to increase losses.
3️⃣Risk tolerance: Investors need to have a strong risk tolerance. Covering positions is a high-risk strategy that requires investors to be able to withstand potential further declines.
4️⃣Psychological pressure: Continuous declines and covering positions will bring great psychological pressure to investors, affecting decision-making and mentality.
5️⃣Investment goals: Investors need to consider long-term investment goals comprehensively, not just short-term cost dilution.
Summary: The idea of earning 1% a day may seem simple, but it is difficult to achieve in reality. The market is full of uncertainty, and wrong decisions can lead to rapid losses. Successful investing requires careful strategy and careful consideration, not just math or luck. Even with a 60% win rate, there is no guarantee that there won't be a 40% failure rate in the long run. Comprehensive consideration of market conditions, personal risk tolerance, and long-term investment goals are the key to successful investing.
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