Grid trading refers to buying at the trigger point whenever the price falls near the benchmark price; Every time it goes up, it is sold at the trigger point.
For stocks that fluctuate back and forth within a certain range, stocks with large fluctuations are suitable for grid trading, that is, when the stock price falls to the support position below the shock consolidation and the stock price is supported and rebounded, investors can buy it; When the stock price rises to the pressure position above the shock consolidation, the stock price is suppressed and the breakthrough is hopeless, then investors can consider selling the stock.
For stocks with small fluctuation and unilateral market, it is not suitable for grid trading. The specific reasons are as follows:
1, the transaction cost increases.
Grid trading method allows investors to day trading, which increases the trading procedures.
2, not suitable for unilateral market.
Grid trading is only suitable for adjusting the market, not for unilateral rising market, that is, in unilateral rising market, if investors use grid trading, it is easy for investors to sell flying stocks, while in unilateral falling market, it is easy for investors to buy more and lose more.
It needs a lot of energy and time.
Grid trading requires investors to always pay attention to the trend of individual stocks. Once they sell at a high level and buy at a low level, most investors have no energy and time to stare at stocks.
4, volatility is not enough
For stocks with less volatility, the price difference earned by investors through grid trading may not be able to make up for the formalities, which is not worth the candle.
Whether investors use grid trading or not, they should follow the following trading strategies:
1. Set the stop-loss and profit-taking position.
When operating, investors should set the position of take profit and stop loss, which can ensure investors' income and avoid greater losses.
2. Control its position reasonably.
When investors are trading stocks, they should never operate in Man Cang. It is better to operate in a light position, leaving enough funds to deal with the risks brought by the late decline of individual stocks, that is, when individual stocks fall, they have funds to cover their positions, so as to share the cost of holding positions and spread risks.
3. Diversified investment
When buying stocks, investors should not put their eggs in one basket to distract investors. They can consider buying two or three stocks. It should be noted that when investors diversify their stocks, the correlation of the stocks they buy should not be too strong, otherwise it will not play a role in diversifying risks.
Step 4 follow the trend
Investors should follow suit when buying stocks, that is, buy rising stocks, not falling stocks.
5. Don't blindly follow the trend
Investors should strictly follow their own investment strategies when trading individual stocks, and don't blindly follow suit. In particular, we should blindly follow the so-called expert news in the market to buy and sell individual stocks.