Stock Investment: Whether To Buy Up Or Buy Down?

Many experts recommend a way to buy part of the platform when it breaks through the platform, and buy part of it when the neck is retraced after the break.

If we do not withdraw directly, we will not catch up.

Some people think that we must not increase the cost of capital at the time of the fall, and we should buy more and more to ensure that every purchase is profitable at the very beginning.

If buying is down, it means that this purchase is wrong, and no more capital should be added.

And value investors are buying and selling more, because the criterion of buying is that the price is lower than the value, and of course, the lower the price, the more worth buying.

What is the right way? If we simply ask this question, we are thinking too one-way. The stock market is neither black nor white, and there is no absolute right or wrong. Each method has its advantages and limitations, and has its specific application scope.

Now discuss the two buying methods:

Technocratic: the important principle of homeopathic trading technology is homeopathy, so most of them are on the right side of the trade. When the upward trend is clear, they will buy. If buying up, indicating that the direction of the trend is correct, we should continue to increase capital.

If buying and selling goes down, it means that the buying operation is wrong. It should not continue to buy to expand the error, but should consider whether the stop loss is.

This method of buying more and more is very demanding for buying points. It is necessary to accurately judge the key point established by the upward trend (pay attention to not the lowest point on the bottom, trying to copy to the lowest point is greedy, often dying badly). If you have gone up a large section, you will buy more and more, which will result in high cost of buying.

Fundamentals: bargain buying is value.

People will prefer to do the left side paction and start to fall more and more before the upward trend. The premise is to make an accurate analysis and calculation of the valuation of the company. The buying point should be low enough, leaving enough margin of safety, and the price of each file should be widen enough.

The worst thing to do is to be self righteous at the bottom of the bargain. As a result, a few files have dropped sharply after buying.

At the beginning of the bear market and the top of stocks, the most taboo is buying and selling.

When a large number of retail investors see the fall, the first reaction is to raise the cost of the flat. The instinctive impulse of this moth is probably from the experience of buying the bargains in life.

In this way, there is no judgement on the valuation of stocks and the ups and downs of stocks. Blindly buying and selling more and more is a wrong way of operation which is strongly criticized by the technocrat.

The premise of buying and selling more and more is to be able to accurately determine the value of a stock and confirm that its downside is not large enough, and we should also consider the market trend and the status of Niu Xiong city.

Even so, it often suffers from long term sideburns at the bottom and costs a lot of time, which is a natural defect on the left side.

The advantage of the left side buying is that as long as the judgment of the bottom area is generally successful, the cost of holding the stock can be diluted to a lower level, and then it can be held up.

Is it big or small?

When the warehouse is built for a long time, it often needs to build a warehouse on the left side. If it is bought later, it will cost too much.

Small funds come in and go flexibly until the upward trend is established, and then buy again, and the success rate is even higher.

The compromise method can also consider the combination of left and right trading, that is, when the mid line upward trend is established, it begins to buy, but not rushing to catch up, but buying in the short term callback process, pyramid type.

For example, seeing a good stock, judging from the fundamentals and technical aspects, there is a big room for growth, but it has risen sharply. Therefore, it only buys the amount of 1/2 funds first, and then moves back to the 10, 20 or even 30 days of average in the upward trend of the stock price. (Note: the smaller the more up the warehouse is), if you buy a certain gear and go up and do not turn around, you will give up the purchase of the next few files and keep the funds waiting for other opportunities.

In fact, how to buy is a side issue. What is more important is what to buy and when to buy.

If the stock price is at the end or upward trend of the downward trend, then it will be correct to buy more and buy more and buy more. If the stock is bad, or the stock price is in the early stage of the fall or the end of the rise, then no matter how to buy it, it is wrong.

However, the location of the top and bottom is difficult to accurately judge. In order to prevent the risk of judging errors, we can adopt the method of buying in batches based on the actual situation and our own ideas, so as to avoid the risk of misjudgment in one lump sum purchase.

In addition, in the different stages of the stock price operation, different buying strategies can be adopted. At the bottom of the beginning, the breakthrough stage is very secure. If the situation is matched, it can be more radical, and buy a heavier position at the beginning. If the position is higher, the stock exchange can be replaced by a robust strategy, and the callback will be bought again.