Traders talk about the risks of covering positions

First of all, the biggest risk when making up a position lies in the fact that some investors use the wrong method of making up their positions: the typical approach is to use the operation method of making up positions in sections and levels, which is a wrong method. Because ordinary investors have limited funds, they cannot afford to make up multiple positions. The result of making up positions in sections and levels is necessarily to make up more and more deeply. Moreover, making up a position is a compensation measure for the previous wrong buying behavior, and it should not become a second wrong transaction in itself. The so-called level-by-level closing is to justify imprudent buying behavior. If you make up a position many times, the more you buy and the more you cover, the result will definitely make you fall into a deep quagmire that cannot be extricated. For strategic replenishment, the most successful replenishment operation must be one-time success, because strategic replenishment is used for the purpose of unwinding, it often requires heavy or full positions, and the proportion of invested funds is large, which is the key operation that determines success or failure. Therefore, it must be extremely cautious. Tactical replenishment is mainly to grasp the phased bottom of the stock price, make a short-term attack, and quickly withdraw funds after making a profit. Although it does not have a limit on the number of operations, tactical replenishment does not require partial replenishment or step-by-step replenishment.

Secondly, foreign exchange trading experts point out that the risk of replenishment is also because some investors do not have the concept of strategic replenishment and tactical replenishment at all, or although they understand but confuse the use of the two methods. For example: strategic replenishment requires not deep replenishment, and if there is no unexpected situation after replenishment, they will not sell without unwinding. Some investors can't hold up the dealer's shuffle, and throw out the chips for strategic replenishment early. As a result, although the stock price has risen a lot, he cannot unwind it. There are also tactical replenishment. Whether deep and shallow, you can replenish the position, but it requires short-term profits to be settled in a timely manner. Some investors do not understand the technical requirements of tactical replenishment, and often make short-term into long-term, and make replenishment chips into lock-up chips. These are all mistakes that investors are prone to make when replenishing their positions, and they need to be addressed.

Finally, the risk of covering a position also comes from the lack of stop-loss awareness among investors during the covering operation.

Under normal circumstances, there is no stop loss problem for strategic replenishment, even when the stock price falls below the replenishment price and there is a temporary lock-up, there is no need to stop loss, because even if investors buy in the bottom area of the stock price, it is almost impossible to buy at the lowest price. A short-term lock-up after the correct replenishment is a normal situation, and you cannot rush to stop loss like a startled bird as soon as there is a loss. Moreover, strategic replenishment is also an investment decision made with a certain degree of confidence, which itself has certain security. Therefore, strategic replenishment does not require a stop loss under normal circumstances. However, there are exceptions, especially when there are major changes in the market environment such as fundamentals or major mistakes in investors' judgment of the market, investors still need to show the determination to break their wrists.

Tactical replenishment is a short-term operation. Usually, a stop-loss (or stop-win) plan and stop-loss criteria need to be developed before the replenishment operation. In actual operation, it is necessary to maintain a timely look at the market. When there is any abnormal change in the market, stop the loss immediately and exit the market. Do not participate in any unknown adjustment to ensure the safety of funds.