First aid guide under the background of tariffs.
Trump's tariffs triggered a panicky sell-off in global stock markets, which plunged and seemed to leave no one alone. Those of you who are watching at this time may be hesitant not to cut the meat to a halt, or may regret not getting it done early, and can't help but be complacent.
If you are anxious, do not rush to blame yourself, remember 2022? A world that felt like it was going to collapse, but now I look back on it. What we really have to fight is never the casual temper of the market gentleman, but the impulse to throw his umbrella in a rainstorm. Take a deep breath now to calm yourself down...
First, deconstructing the three-layer psychological mechanism of panic
When we are deep in an emotional storm, try to understand the three-layer psychological mechanism of panic, understand its scientific explanation, and then try to accept it.
1. Experimental Effects of Electrocution
Research from the University of Chicago found that investors are more likely to endure real shocks and are reluctant to look directly at accounts with persistent losses. This primal instinct for “loss aversion” stems from an oversensitivity to danger signals during human evolution.
2. DIGITAL DROWNING
When the market cap falls below the psychological point (usually the cost price or the initial net value of the year), the computer notices the loss. The amount of blood flow in the skin is reduced by 40%, and the decision power returns to youth levels -- which explains why we often sell when we shouldn't sell.
3. GROUP HYPNOSIS TRAP
MIT HAS EXPERIMENTALLY SHOWN THAT MORE THAN 73% OF INVESTORS WILL NOT AUTOMATICALLY MIMIC MARKET MOVEMENTS, JUST AS AIRPORT TRAVELLERS FOLLOW PEOPLE RUNNING AROUND UNAWARE OF THE RISK DIRECTION. The social media hype is more unheard of by this drama group. Knowing the scientific explanation of this emotional storm, isn't anyone responsible for themselves? However, what comes next is not a splurge, but a step forward in securing and sorting yourself out, but then implementing a hedging strategy and making a low-loss investment operation.
2. Five-step emotional first aid
Step1: Enable “Brain Mist Removal Mode”
Disable all Live Quote APPs and cut the loop with physical isolation. The trick for Wall Street Traders is to lock your phone into a microwave oven (without electricity) for two hours to create a strong cold shutdown.
Step2: Draw a Reality Check Map
Complete three key answers:
✓ Can my cash flow support 6 months of basic life?
✓ Is the current loss greater than the 2018/2020 dividend spread?
✓ Do you have a valid Operation Engine with a symbol?
Step3: Create a “Sensory Firewall”
Playing specific ambient sounds (such as coffee shop white noise) during the Trade phase, training computers to link market fluctuations with relaxation. Neuroplasticity studies prove that this reframe can reduce the critical pressure by 40% in 21 days.
Step4: Perform “Emotion Accounting”
Create a mental health benefit statement, Algo anxiety to tool cost, and dull self-adjustment.
Watch your actions every hour = consumes 300 calories of concentration
Late Night Insomnia = Lost 8 Hours of Productivity
Risky Trade = Payment 0.5%-2% of gross cost
Step5: Launch the Time Capsule Program
Write the message to yourself three years later, detailing this excerpt. Below is a detailed summary of current Hold Positions, and you will be surprised to see that many of the major stock market disasters are just a small wave in the historical Long River.
Third, practical countervailing strategy toolbox
When you've calmed down enough, it's time for rational decision making. Is it cutting meat, skimming, lying down, or hedging? This is based on your judgment of what the future holds.
Stocks can be exchanged for cash at a time when you're not moving in the usual way.
When you are more optimistic about future trends, you may underwrite or restock.
When you have absolutely no focus on the movement, or when you do not move easily, you may choose to have a horizontal vision. However, there are a number of hedging strategies available to provide protection when you have the right stock and the movement continues downwards without wanting to cut the meat.
1. options hedging
The most commonly used isProtective Puts(Protective Put Option: Buy a put while holding Stocks. As can be seen in the following chart, no matter how the stock price falls, this strategy's dipping maximum losses are limited.Long Collar(Long Collar Strategies are typically based on Protective Put's underly-to-sell call.
Some options strategies are to trade against the volatility, such as Long Straddle, such as Long Straddle, such as Long Straddle, buy a long straddle combination, Short Straddle, Short Straddle, Short Straddle, Short Straddle and Long Strangle Long Strangle, Short Strangle, Short Strangle, Short Strangle and Short Strangle Slip Combination ShortStrangle. With an immediate stock decline, you can take profits from these options strategy strategies, lower the gains on the aggregate strategy, and lower the downside losses on low bullion holding positions. More strategy, we are atAdvanced options strategy knowledge in ChinaShare the details of the course.
2. Reverse ETF: When a large disk or major stock falls, the corresponding reverse ETF increases. For example, if your Hold Positions are more than Technology shares, then$ 3ProShares UltraPro Short QQQ ETF (SQQQ.US)$ und$ 3Direxion Daily Semiconductor ETF (SOXS.US)$ Possibly relative to the mouth. However, be aware that if the wrong direction is chosen, there may be losses, and the investment results may not be good in the case of a large plate or a positive stock cross.
3.VIX Index ETF Hedge: In times of sharp falls in the market,$ CBOE Volatility S&P 500 Index (.VIX.US)$ A rapid rise is possible, then, and the options strategy strategy type described above is described above, the lower bulk strategy category is possible through the investment VIX index ETF, and the downside losses of holding warehouse positions with the investment VIX index ETF is possible. Moreover, this type of ETF is only suitable for Short Term Trading and there are risks in the long term! For more details of the course, see hereWHAT IS VIX INDEX? How to Trade in the Big Bang?》
Fourth, reduce investment risk with good position management
Again, if you identify opportunities for backwardation during a big fall, remember to exercise good risk control, after all, market volatility is actually unpredictable. Here are 2 methods of position management:
If the downtrend in the market is not completely over, the fall gap has not increased: you can follow the warehouse management of the left-hand side shape, take the path of buying in batches, and buy the warehouses one by one, and the whole shape one by one.
Since the initial stock ratio is low, it is not possible to have an average cost of almost half a mountain. The point of no risk is that if you make a mistake in the bottom, Stocks are incomplete in one fell or another, and then you will end up in default. If you want to avoid this problem, you can increase the buying interval.
If you determine that the market will soon turn bearish into liters, consider pyramidal position management. The initial capital inflows are larger. If the market continues to fall, the market does not expand, and after it starts to rise, it increases, but the inventory ratio gradually decreases.
This approach has a relatively large position before the trade starts, resulting in more potential gains as the trade turns better. But there is also a risk of loss if things do not turn out well or are constantly shaky. For more courses on risk management, click hereHow to reduce investment risk?》。
