The current A-share market gives people a feeling that buying stocks has become like committing a crime against the wind.
This is undoubtedly a huge blow to investors who still firmly believe in the market and continue to replenish their positions.
Perhaps those who are active online cannot clearly perceive that there are indeed a large number of investors around who are continuously cutting losses and leaving the market, and there are quite a few who have closed their accounts.
At this low point, the proportion of investors who are replenishing their positions in public funds is a minority, while those who are redeeming have become the majority.
In addition to the snowballing of passive explosions, margin trading, and pledges, there are always unsold chips every day.
There is a sentiment in the market that it is wise to wait for the system to be perfected before buying stocks, and it is better not to buy before that, choosing to lie flat.
This aura of fear envelops the market, making people dare not commit crimes against the wind.
When retail investors dare not buy stocks, one must consider who the stocks are being bought by.
Those snowballs that have exploded, margin trading that has been closed, and the precarious equity pledges.
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There are also a large number of public funds that have been redeemed, private funds that have been closed, and the chips in the hands of retail investors who have closed their accounts.Nowadays, it is absolutely impossible to say that there are a large number of retail investors entering the market against the wind. So where have all the chips gone?
Every day, what we see is the outflow of main capital, as if everyone in the market is running away.
But clearly, for chips to be sold, there must be someone to buy in order for the transaction to be completed. So could so many chips have just evaporated into thin air?
Some people may have figured it out at a certain moment.
But even if they have figured it out, the market's results are not very good.
Because the end result of buying is losing.
Even if you know that someone is taking advantage of the suppression to absorb a large number of chips, it cannot prevent the outcome of being trapped after buying.
Because the big money clearly understands a truth: if you buy after the rise, you can't get cheap chips.
So they accept a certain floating loss, buy stocks wantonly, and create the illusion that the market is very weak.
But for retail investors, floating loss is a real loss, and it is the beginning of the collapse of your mentality.Because retail investors can go all-in with a single click, buying a day early, and taking an extra limit down, no one can stand it.
Clearly knowing that it is killing sentiment, but the panic just can't be stopped, because the losses are getting bigger day by day.
There is only one way to stop the losses: sell the stocks and wait and see.
There is really no way out, the market is so cruel, it's unimaginable.
So, the word "buy" naturally has a knife on its head, a fast knife that kills people and cuts the heart, and every move is bloody.
Perhaps, this year's New Year's greeting can become, "Did you buy stocks today?"
Back to the main point, for small retail investors, not buying stocks means no loss, but also means no win.
Since the choice is to enter the stock market, the goal is to make some money.
So, how to deal with the current market is the best strategy?Perhaps many people will tell you that it's better to be empty-handed.
First look at 2600, then 2500, and even 2400, 2300.
In fact, being empty-handed is not wrong, but it can bring psychological issues in trading.
Originally, those who were empty-handed at 2724, how many started to enter when the rebound reached 2900?
Empty-handed investors are also afraid of missing out.
And their actions will eventually become deformed, which is to chase the rise in panic.
Because they also worry about their own misjudgment and fear of a large area of missing out.
This is the overly pessimistic, who are easy to lose control and execution due to emotions.
Unless it is a firm bearish view, otherwise, a single day's rise changes the three views, and the situation of turning from bear to bull is everywhere.
Bears are more likely to be cut than bulls, this has already happened in reality.So, for retail investors with not-so-good execution ability and psychological endurance, keeping an empty position at this point is not a very good approach either.
The second strategy is relatively simpler: grid-based position increment.
Since I don't know where the drop will end, I will divide the points into a grid and decide the position to buy based on the level of the points.
For example, start building a position at 2800, buy 20%.
When it drops to 2700, buy another 20%, then 2600, another 20%, followed by 2500 and 2400.
At 2400 points, go full position, the risk is definitely much lower than going full position near 2800 points.
After all, the probability of the index plummeting another 400 points is not high at least in the short term.
At the same time, the cost of scattered chips will also make the investor's mentality more stable.
Even if the stock rises, it's not that you won't make money, at most it's just a little less.
While averaging the risk, having a good income expectation is actually quite suitable for most investors.Most investors are quite subjective; they cannot control their restless hearts.
Once they believe there is a possibility of a bottom in this area, they will add positions aggressively, eager to gamble at this position.
You will find a realistic situation where the bottom is caught halfway up the mountain.
This situation is very common and is an inevitable result caused by human nature.
For this kind of investment method that leans towards grid buying, it must rely on passive execution of instructions and cannot allow investors to make subjective judgments.
There is another way, that is, to face the difficulties head-on.
At a point that one considers relatively reasonable, after buying a large position, lie flat.
Many people will be puzzled, at this stage, can they still buy and lie flat, not afraid of another 20% drop?
It seems so, but it is not necessarily the case.
In the stock market, it is common to see huge pits at the bottom dug out due to inertial killing, but looking back, they have all climbed out of the abyss.For example, when the index fell from 6,000 points to below 2,500 points, those who rushed to buy at the bottom eventually saw it rise to 3,478 points.
Another example is the drop from 5,178 points, where people rushed to buy at around 3,000 points, and later there were two rebound highs, both near 3,600 points.
Many times, buying at the bottom after a continuous sharp decline has eventually made money.
Even if you didn't avoid the last drop, you will also climb out of the deep pit caused by this last drop.
Since the situation will eventually evolve into this, jumping into the pit and squatting is also a strategy.
Of course, there is a premise, that is, this position has already approached the bottom area.
The judgment method is to look at the percentile of valuation to see if it is indeed in the historically low range.
Otherwise, squatting halfway up the mountain, the consequences are also unimaginable.
When buying stocks near the position of 2,800 points, there is no need to have too much psychological burden.
Because the group above 3,000 points has already taken up most of the risks for you.Do not underestimate these 200 points; the bitterness involved is crystal clear to those who buy them.
Moreover, when buying stocks, don't always prefer to do so during a downturn. Isn't it also good to wait for stability?
Many retail investors are too impatient when it comes to buying stocks.
As long as there is capital in the account, stocks can be bought at any time, and there is not much talk of missing out.
Compared to the "squatting" method of waiting for the rabbit, retail investors may be more suitable for a step-by-step approach under the control of their positions.
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