The nature of raising positions.
The first thing to make clear is that adding a position is an investment technique. It is a tool, not a purpose, the purpose of investment is to obtain the minimum risk content of the income, so only when the position can help investors to achieve the above purpose, it is the value of use, otherwise it should be discarded, this point is like the vajra sutra said, all laws are raft metaphor, the law should still be abandoned, let alone illegal.
The object of application of the addition of the position. From the analysis ability, at least the future week's direction can make accurate judgment of the investor, can use the position (which requires investors not only to look at the chart, but also care about the fundamentals and the weather, policy, etc.), from the operation rhythm, said that the position is suitable for the combination of short and medium investors, from the amount of capital, said that the position is suitable for larger funds, when 80% of the position cannot be considered to increase the position, or back-up when the ratio of funds to current funds reaches or exceeds 1:1, it is suitable for the operation technique of adding positions.
Why should we add positions into the investment instead of opening a position in place at once. Usually there are several situations in which a position increase operation is to be carried out.
1, The capital is too large, a time into the field is likely to be found, to strong wheat for example, if a time to open more than 150, for several days in a row, it is easy to be institutions to focus on, eat, then, we should take the whole into zero to increase positions skills.
2, When the discovery of fundamental changes, but the technical side has not been reflected when it is known that the speculative market is not always rational, often has its emotional side, such as when the fundamentals of the good, the graph often want to shock again, may have to fall a bit, and vice versa. At this point, both want to occupy a favorable position, but also do not want to risk more shocks, we must take the technique of splitting into parts.
The use of additional positions.
Increase positions are usually pyramidal increase method, to do more, for example, at the bottom to buy a part, for example, is 80 lot, and so on the market to a certain position, and then buy 60 lot, with another rise, and then buy 40 lot, and so on. In this way, because you always buy more at the low end than at the high end, you can always ensure that the cost of your position is lower than the average market price. When you think the market is about to reversal, you can close out once or twice to pay attention to the time to close out as quickly as possible.
Notes on adding to your position.
1, before deciding to use this technique, the law of the species to be operated, the change of mind in the various stages of the species, should be very familiar with, do know yourself and your enemy to do this, the tracking of the species at least one from up to down or down to up process.
2, only when the fundamentals support the variety out of the unilateral potential, can use the method, if it is oscillating potential or is reversing when using, often outweighs the losses.
3, must follow the principle of the pyramid, so as to ensure that their costs are lower than the market.
4, adding positions is often used in combination with rolling open and close, active locking, etc.
5, always recognize that position raising operations are only a skill, and that positions should be raised for profit, not for the sake of raising positions.
