The significance of building positions in batches:
Cognition is only at the theoretical level, and operation is at the practical level. There is an essential difference between the two. Operation is also the core of trading, which lies in how to participate in the market after understanding the market. Make a hypothesis, if we can correctly understand the market time and fluctuation, we can accurately know that the lowest point of a day is 6550, and we can know that it is the price of 6550 and its occurrence time. (It hasn't happened yet, but you're sure it will happen by some means.) Then after you meet the certain price of 6550 at a certain time node, the only choice is to do more in Man Cang. Of course, this is impossible. Even if you can predict it once, you can't be sure whether it will happen beforehand. The reason is simple: the existence of certainty makes you have certain suggestions, while uncertainty makes some suggestions flexible.
It is the existence of market uncertainty (this uncertainty is for investors, not for God), so the result of one-off Man Cang operation may be a loss or a profit. If the profit and loss are fair, then it is ok to participate in the market on average. Obviously, this is not the case. All profit and loss calculated by percentage have such contradictions. For a single account, an account with any profit 100% will become the initial fund as long as it loses 50%. If any account has a loss of 50%, it is necessary to correctly identify an opportunity that can make a profit of 100% before it can be recovered. Therefore, in the case of Man Cang's action, opportunities are not equal. Because the cost of a mistake in Man Cang's operation is unbearable. Coupled with the leverage of 12.5 times, the average price fluctuation of 4% is prone to such a situation (loss of 50%). It is precisely because no one can guarantee to fully identify the highest point that there is always a deviation. If a person's cognition deviates from the actual market by 4%. Then this is very dangerous, because once Man Cang is wrong, the result will be an explosion. Therefore, it is obviously good to add positions in batches. Smart readers should realize that the way of adding positions is obviously related to their winning rate and cognitive bias. A higher winning percentage will not be specified here (a 55% is tolerable), and the cognition that the average overall deviation is below 0.7% will not be set. (The combination of low deviation and high deviation is 1.5%, which is a level of most analysis).
Advantages:
A.？ The average price participation interval is close to the actual lowest point to some extent. Assume that the lowest point of the actual market is X and the lowest expected price is N. If the judgment is correct, Y is the difference between the entry price and the lowest actual price. Discuss with piecewise function.
If the market is less than n but within the deviation range of 0.5%, it is better to participate effectively and make profits than not to participate; If the market reaches below N or 0.5%, it will rebound to above 99.5%, and the opening cost will increase by 0.25% or 0.08%. Although the price is high and the participation position is low, it is relatively safe, and the position is 0.07% lower than the expected price.
B. Once the error is identified, the position can be interrupted, resulting in lower-than-expected losses.
C. Opening positions for a long time will avoid the adverse effects caused by the impact of temporary sudden risk events. Because such a position is definitely not completed in an instant, when an emergency occurs, it will avoid greater losses.
The difference between opening and closing positions:
In opening positions, a basic idea of batch operation is to wait for the opportunity and pursue perfect opening positions. Because it is not chasing the market, then the position is in a state of falling, buying and rising. Because the reversal can be profitable, the implied situation is that the early reversal (that is, X>n) will not involve any stop loss problem, and a small number of participating orders can directly profit and close their positions. However, if it falls below or below the expected opening range, it depends on the profit and loss figures. If the position is 25%, the price fluctuation of 1.6% is set as the average stop price.
Assuming the relationship between price fluctuation X and loss relationship Y and its risk rate F (current margin 10%), use the formula:
Y= 10X/F
As a loss, y is usually 4% at most. Because it lost 4%. You need a profit of 4. 1%. Therefore, the same position can turn losses into profits, basically at an equilibrium value. And can withstand the price fluctuation of 1.6%. According to the example of 7000 just now, the average price of normal jiacang is around 6997, and the amplitude 1.6%, because I am afraid that the incoming position itself has a certain amplitude, and the daily amplitude of silver is generally 2.5%, so the participating market positions may have fluctuated by 1.5%. Therefore, if there is more than 5% of the market, it will not lose money to stop at 3%. Then the average stop-loss price (defined as H) should be set at around 6885. Summary: The difference between opening a position and stopping a loss is that opening a position is decentralized and leaving a position is centralized.
Whether to close the position and leave. How to stop loss and leave the market, obviously there are cases where you just hit the stop loss price or stay at the stop loss position for a long time and then reverse. What I want to explain here is that above the expected price (the corresponding example is higher than 7000), you will open a position when you see it. Below the expected price (that is, below 7000), whether you want to open a position or stop a loss needs to refer to another variable, time. Because in the final analysis, it is naturally difficult to see the entry position clearly, but by observing the duration of the market reversal node, we find that it is very short to last for more than 3 hours before the inflection point where the amplitude exceeds 2% and the amplitude exceeds 5% after the reversal. From the statistical point of view, when a price is the position that we think the market should reverse, but it does not reverse after a period of time, then the previous operation plan with this reversal will be discounted. This is also the reason why many of us regret after stopping. It is wrong to leave when you see a stop loss. You should leave slowly at the stop loss and wait for a while.