What does the word stock pledge burst line itself mean? Why does the stock market need to set up a stock pledge line? The following is the significance of the stock pledge explosion line brought by Bian Xiao, hoping to help you to some extent.
Significance of explosion line of stock pledge
In fact, short positions are forced liquidation. The reason for this situation is that the loss of investors is greater than the deposit in the investment account. Refers to the stock investment, because the market changes too fast, the stock loses money, which affects the amount of the deposit in the account, so that the deposit can no longer support the original trading contract and will be forced to close the position, which is short position.
If there are short positions in the stock market, it often means huge losses for stock investors, which is also an investment situation that all investors are unwilling to face.
Forced liquidation can be divided into the following three types
1, forced liquidation due to failure to deposit additional margin as required;
2. Trading in violation of trading rules and relevant regulations will also lead to forced liquidation;
3. In view of the changes in policies and trading rules, it will also cause forced liquidation.
Usually, most of the funds in the investor's margin account are occupied by trading margin only when the market changes greatly, and when the trading direction is opposite to the market trend, it is easy to explode positions due to the leverage effect of margin trading. For example, the ability to resist risks caused by overweight positions becomes worse; For example, the market changes too fast and investors have no time to add margin, which will lead to the emergence of short positions.
How to reduce the proportion of short positions in stock financing?
The key to reduce the proportion of short positions in stock financing is to control risks. Investors can reduce the proportion of short positions in stock financing in the following ways.
(1) Reasonably control the financing scale and avoid excessive leverage.
(2) Set the stop loss point and stop the loss in time.
(3) Strictly control positions to avoid excessive concentration of positions.
How to calculate the short position ratio of stock financing?
The formula for calculating the short position ratio of stock financing is
Stock financing explosion rate = financing explosion amount/financing balance
Among them, the amount of financing short position refers to the amount that the financing customer is forced to close the position due to the loss of financing transaction, and the financing balance refers to the balance after deducting the financing principal from the financing stock value currently held by the financing customer.
The timing of buying stocks
Usually, the resistance level is a good reference buying point, and resistance will only be formed after the breakthrough attempt. But once the breakthrough is successful, the stock price will come to a higher price, so the stock price can be used as a sign of rapid admission.
Second, the moving average goes up to buy.
The 30-day moving average is a very important reference, and most main positions can also refer to the 30-day moving average. If the 30-day moving average goes down and then turns, there will usually be an increase of around 10% in the follow-up. Short-term operation can get unexpected results by this method, and the effect is better by combining the 5-day moving average and the 10 moving average.
Third, call back the triangle to buy.
In the process of callback, many forms will appear. The callback is a triangle. Although it is a callback, the low point cannot break through the previous low point. We also call it V or W bottom.
Fourth, adjust the neckline shape.
When the stock price meets the neckline in the operation process, it usually forms strong support. You can wait another day or two. As long as the neckline support is confirmed to be effective, you can boldly intervene.
5. Call back the previous low point to buy.
Usually, when a big trend is determined, a large number of investors will flock to the market as long as there is a slight correction. But a better way to enter is to call back to the front low position, which is a better opportunity to enter.