Learn these three tricks to reduce retracement.

What does retracement mean? It means that you have made a lot of money, but before you are happy for a while, you become a roller coaster.

It was immediately returned to the market.

Controlling retracements is the most important weapon to protect principal and allow profits to run.

If you want to choose a good fund manager, you need to look at his drawdown.

If he can double in a year, but as long as he retraces 50%, he will be back to the starting point.

So it is very important to control the retracement.

The drawdown is a touchstone to test a person’s investment level.

Through continuous learning and thinking, I have used practical experience to summarize three useful tips and give them to those who are destined to be destined. If you learn how to do it, you will make money.

First, position control.

Let’s start with an example, which is a capital-guaranteed fund.

Few people sell this product now because the yield is low.

But how to ensure capital preservation?

Can you imagine?

Can you do it?

If you can answer this question, congratulations, you are getting started.

If you don’t understand, leave a message. The message is enough for ten people to give the answer.

He said he would return to position control.

Several settings for positions: full position. Short position, half position.

The first type is full position. If you are full position, then you are consistent with the market. If it goes down, you will go down. If it goes up, you will go up. If you are less capable and less lucky, the market will rise, but if you don't rise, the market will fall, and you will fall even more.

Drawbacks can range from 10-50% or more depending on market conditions.

This involves the issue of stock selection. Not discussed here.

If you are interested in stock picking, you can leave a message.

The second type of short position. When the market goes up, you don't go up; when the market goes down, you don't go down. The drawdown is zero.

The third type of half warehouse. If the market drops 50%, your account will drop 25%. Cut the drawdown in half.

Thinking further, how can we gain more profits and reduce drawdowns on the basis of controlling positions?

Conclusion: Positions have a great impact on retracement. If you think clearly about the relationship between positions and investments, you will get better investment results.

Second, asset allocation.

Investment is not speculation, so buy assets instead of chips.

What is a high-quality asset?

You need to think carefully. If you can answer, congratulations, your investment level is quite high.

Simple asset allocation model:

Gold and CSI 300, the ratio is 5:5.

There are many situations that can be listed, which one can calculate the overall retracement degree.

The simplest example: if the CSI 300 falls by 50% and gold rises by 50%, the retracement will be zero, avoiding a retracement.

Therefore, choosing a good asset allocation is to choose the least drawdown and the most generous return.

You can also choose other asset allocations.

Third, the retracement selling strategy.

Set the retracement ratio to sell to avoid the roller coaster ride.

For products that have already made profits, it is important to set up retracement selling, so as to ensure profits and allow profits to run.

Profit is like going up a step, setting the take profit, and then all the way up, you can increase the take profit step by step. If it turns around and goes down, you should retreat quickly.

Protect the living forces.