If there is a maximum retreat within a period of time, it is called maximum retreat. Users should pay special attention to the retracement of stock prices when investing in stocks. Retreat is a common term in daily transactions, which refers to the reduction of funds in an account. Some transactions may lose money, which everyone needs to accept. Therefore, the withdrawal of funds is naturally a fact that people must accept.
Retreat occupies a large part of trading time, even in the period of expanding profits. Stock retracement refers to the reduction of assets in the course of trading. Recovery is equal to the risk faced by investors in the investment process. Generally speaking, the lower the retreat, the better, and the smaller the risk.
The main reasons for the stock retracement are:
1, retracement caused by stock price fluctuation;
2. Retreat caused by company performance;
3. The retreat caused by the Black Swan incident;
4. Delisting caused by dealer shipment.
It is precisely because of retracement or long-term retracement that a large number of weak traders will waver, make wrong actions and get into trouble, which is the best time for mature traders to clean their opponents; It is precisely because of retracement or long retracement that ordinary traders mistakenly think that their trading system is out of order and give up one after another. When they give up, the system has actually ended the retracement period and entered the profit track, and traders who know how to use retracement will always be invincible. In the category of fund profit-loss ratio, it is not enough to just look at rate of return on capital, but also look at the rate of fund withdrawal. If rate of return on capital is 85% and the withdrawal rate is 10%, then the ratio of income to withdrawal: rate of return on capital/capital withdrawal rate =8.5 is ideal. The greater the proportion, the stronger the profitability of this person. There are three main ways for private fund managers to control retracement: stock selection, hedging and position control. Choosing stocks with safe margins is the first priority to control retracement. A-share retail investors account for a large proportion, and the overall market sentiment fluctuates violently. Any concept and theme, whether true or false, can be hyped up in a short time as long as it is novel and dazzling, but it often plummets after the hype. The game of delivering packages is undoubtedly a disaster for clumsy investors. Therefore, Danshuiquan, Gaoyi and other institutions advocate reverse investment, pay attention to the margin of safety, conduct in-depth research, and buy ginseng at a radish price, thus avoiding the almost inevitable panic after the war drums stop.
When fund managers firmly believe in the value of their own stocks, once faced with systemic risks, hedging with stock index futures is almost the best way to control risks. In the stock market crash, all kinds of stocks have accumulated sediment, and the use of stock index futures has been restricted. Position control has become the last valve to control the withdrawal of orders.