This is a question often asked by novice retail investors. The standard answer is to cover positions in a pyramid shape, that is, to cover 20 lots. After the stock price drops by 20%, cover 40 lots, and after the stock price drops by 40%, cover 60 lots. . .

That is, the deeper the decline, the more you will make up for it. This can effectively reduce the cost of holding shares. Once the stock has a decent rebound, it can turn losses into profits.

Haha, I guess the poster is not satisfied with this reply. Because the poster does not have enough funds, yes, because the concept of covering positions is an institution. Institutional funds are huge and it is difficult to get in and out of stocks. Therefore, once you are trapped, you have to wait for the opportunity to cover positions and unblock them. Because they are institutions, they can always raise funds. There is enough money to spread the low cost, but it is different for retail investors. The money is pitiful, so after the position is deep, the money that can be used to cover the position is pitiful.

Fortunately, retail investors have an advantage, that is, all positions can be liquidated within a few seconds, and there will be no impact on the stock price. Therefore, for retail investors, if the stock loses money, they should clear their positions and exchange shares in time. Or if you take a short position and wait for the stock price to rebound before stepping in to recover the loss, if you mistakenly use the method of covering the position that can only be done by institutions, haha, because you don’t have enough money and your vision is not good, the result is often that the more you do, the more you lose, and ultimately the stock price When prices rise and fall at a low level, you can only take the elevator, 'wandering between losses and further losses'.

Of course, retail investors have another advantage, that is, the money is their own and there are no financing costs. Therefore, if they are trapped, they can adopt the 'turtle strategy' and hold on until the trap is resolved. Although they lose the chance to speculate in other Opportunities for stocks to make profits, but if you buy good stocks, then long-term profits will not be a problem. For institutions, although they can achieve book profits, due to high financing costs, they may actually still lose a lot. , so they would rather cover their positions or even raise prices to save themselves, instead of being leisurely shareholders like retail investors.

All the opinions about high and low positions sound reasonable but are actually nonsense. The high and low positions of the stock price can only be judged after a long time has passed, and at this time it may be too late, so the so-called high and low positions are basically It is the language of gods and fortune tellers and has no practical meaning.

When it comes to covering positions, you either don’t cover them, or you cover them according to the decline. Who will be trapped if you know the high position? Knowing the low position, even if you rob the bank, you still have to buy the bottom, so why should you cover your position? Isn’t it enough to open a position? hehe.