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Does the fund need to cover the position when it falls sharply? Skills of covering positions when the fund falls sharply.
Covering positions is a professional investment term, which means that investors buy a certain amount of securities for the second time. The popular explanation is that investors buy when the funds they hold fall, and share the investment cost by covering their positions. So when the fund falls sharply, must it make up the position?

Do you want to make up the position when the fund falls sharply?

Whether the fund has plummeted depends mainly on what the reasons are and its own economic situation. Although the purchase price is low when the fund falls sharply, it can share the investment cost well, but it will also increase the investment risk. Because the rise and fall of the fund is unpredictable, it may continue to fall after covering the position. If you keep falling to cover your position, it will only increase, and finally the loss will increase.

The fund crash can cover positions, but it is not recommended that Man Cang cover positions at one time. You can make up the position in batches, or you can make up the position by fixed investment. When the fund falls sharply, we can set the decline. When the fund reaches the falling standard, we can cover the position, divide the fund that can cover the position into multiple points, buy it once every time it reaches the covering standard, and so on.

Secondly, the fund's cover position can also depend on the fund valuation. When the fund falls sharply, the valuation of the fund is at a low level, and it doesn't matter if the amount of cover is large. When the fund's valuation position is high when the fund falls sharply, it is not recommended to cover the position. If it is necessary to cover positions, it is recommended to cover positions in a small amount, because once a highly valued fund falls sharply, it is likely to fall endlessly, and covering positions will only increase losses.

The rise and fall of a fund can generally be judged by looking at the stocks held by the fund. The stock held by the fund goes up, the fund goes up, the stock held by the fund goes down, and the fund also goes down. In addition, the fund will also be affected by the main funds, the ability of fund managers and major bad news.