The market changes too fast, and there are always a lot of things that have never happened before.
Many of the best trading systems collapsed, and at the beginning of 2024, there were huge losses.
Indeed, a lot of things happen for the first time.
For example, the ** of micro-cap stocks has fallen by more than 45% in just ten days, which is unprecedented.
For example, the CSI 300 has four consecutive negative years at present, the first time in history, and the longest before was only two years.
For example, the new energy and photovoltaic indexes have closed in the negative line for 7 consecutive quarters, which is also the first time in history.
Too many things that once wouldn't have happened have just happened, which is a great test for a trading system.
Even quantitative private equity has not escaped the catastrophe, and some quantitative private placements have turned profits into losses in just a few days, and it is a huge loss, facing the embarrassing situation of liquidation.
This fully shows that many trading models have begun to be inapplicable in the current market.
Some ** may still be addicted to the joy of being a demon stock, chasing a leader, and eating big meat in the second half of 2023.
In January 2024, it really gave a slap in the face.
The market will always inadvertently harvest the once big winners.
Therefore, for many people, correcting the trading system has become a very important thing.
Moreover, this matter is a bit imminent.
Because it is obvious that the style of the market has shifted from a super game to a medium and long historical layout.
No matter how the market changes, the essence will not change, that is, buy cheap ** and then sell it at a high price.
But technically, as well as in trade execution, there are still a lot of corrections that need to be made.
When the market style changes, how to deal with it has become a matter that should be solved at the moment.
Here are a few key points to share with you.
First, whether the stop-loss mechanism is perfect.
If there is a problem with your trading system and you have incurred a large loss over a period of time.
The first thing to do is to check if your stop-loss mechanism is wrong.
Because if a good stop-loss pattern exists, it is unlikely that there will be a large loss in the short term.
When there are some things that should be sold, you must sell decisively, otherwise the whole system of stop loss is ineffective.
Although it is true that you will be deceived many times, there is no way to do it.
You can't think that just because it has fallen too much, it is to lure short, not that the funds are being shipped.
It is actually very dangerous to deal with the market with a fluke mentality, and you need to be rational.
The stop-loss mechanism does not simply refer to the stop-loss ratio.
More often, the stop-loss strategy is adjusted according to the frequency of the stop-loss to avoid short-term high-frequency stop-loss.
Once a large number of stop-loss behaviors occur in the short term, then the trading system is undoubtedly very unsuccessful.
Second, whether there is a change in stock selection thinking.
The failure of the trading system is not only due to the problem of the stop-loss mechanism.
More often than not, the idea of stock selection is no longer out of step with the times.
For example, the previous market style was clearly biased towards micro-cap stocks, but now it has long since turned to the direction of big blue chips.
This big style change is actually a change in the overall market capital being guided.
Therefore, in terms of stock selection ideas, it is actually necessary to make a lot of adjustments, otherwise, it will go further and further down the wrong path.
The idea of stock selection is nothing more than technical stock selection and fundamental stock selection.
When the trading system collapses, it is important to improve fundamental stock picking, not technical stock picking.
Many people have stepped into the misconception that technical failure is a problem with the technical form.
But the reality is that when the fundamentals change, all the technical aspects can fail.
On the road to a big fall, only trend trading without buying ** is a truly effective stock selection idea, and everything else is nonsense.
At this stage, the idea of fundamental stock selection needs to be changed, especially the focus of fundamentals is more critical.
Third, whether the buying point needs to be changed.
Whether there is a change in the so-called buying point is actually mainly for the bullish faction, whether it is necessary to calm down.
When a trading strategy fails and there is a large loss, the biggest problem must be the buying point.
There is no need to put the blame on stock selection.
Many times, it is the wrong time to buy and sell, not the wrong ** itself.
No matter how bad it is, there will be a time, and at a certain stage, it will bring a huge ** because of it.
* In itself, there is no absolute good or bad, only the difference between cheap and expensive.
When you catch a very good buy point, you will understand the mystery of trading.
Some people who specialize in catching the fall and chasing the fall and the rise will often make a lot of money if they can do it well.
Moreover, buying down rather than buying up, being able to effectively receive cheap chips is also the core of the transaction.
Fourth, whether the distribution mechanism should be optimized.
* Management seems to be a cliché, but in fact it is extremely valuable.
Some investors like to do it with a full position, but in fact, the risk is very large.
* The allocation mechanism is mainly used to counter risks and avoid major surprises.
Generally speaking, when you have a relatively large loss and the trading system collapses, you have to find a way to make adjustments on the **.
*The distribution mechanism must be optimized in a way.
When the return of diversification is less than expected, it is necessary to know how to retract ** and preferred**.
When there is a large loss in concentrated investment, it is necessary to appropriately diversify ** and reduce risks.
An excellent trading system also needs to control the overall amplitude.
For example, the current position of the market is judged through the valuation method, so as to facilitate the allocation management of the first class and ensure the safety factor.
Fifth, whether the take-profit pattern needs to be adjusted.
The last point is the adjustment of the take-profit mode.
This is actually very important and directly determines the profit.
In the bull market, it is about covering it to the death, but the bear market has become a stock game, and you must pick a good ** to sell.
In a bear market, taking the elevator has become the norm the most, because the market is not very controllable, and funds may retreat at any time.
If you still do it according to the trading expectations of the bull market, it is easy to be on the mountainside of the bear market, and it is often the first to fall first.
The take-profit itself is to earn the money in one's own cognition, and how to balance the money lost due to insufficient cognition has become the key.
The trading system itself requires a stable, unstable take-profit model, which must be adjusted.
The establishment of the trading system is actually only an initial part, and once it enters the game, it is normal for the whole system to face tinkering.
It is also very normal that there are some trading systems that may be completely eliminated by the market.
The market is brutal, and we must be fully prepared to tear it down and start over.
In this market, you can only conform to it, there is no situation that makes it succumb to you, and following the trend is the way out.
Disclaimer: This content is provided by *** Monster Hunter and is for reference only and does not constitute operational advice. If you operate by yourself, pay attention to ** control and risk at your own risk.
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