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Let's discuss a topic today, which is about how to seize some investment opportunities during the adjustment period.

The market does not rise every day, and naturally, it does not fall every day either.

Although the probability of making money is relatively low when the market is falling, the best approach is to wait with an empty position.

However, no one knows how long it will fall or how much it will drop, so most people still want to buy stocks during the decline, hoping to make some money against the trend.

Facts have also proved that if you follow some major principles and logic, there are opportunities to make money during the adjustment period.

As for whether to earn this money at the risk of cutting your own throat, it depends on the individual.

At least most retail investors are passively cut, and only a small part actively makes money under the knife.

The vast majority who can understand will choose to wait with an empty position or operate with a small position.

Only those with a higher risk preference will lay out some opportunities during the adjustment period.

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However, there is no absolute right or wrong in the trading model, you can rest, or you can do it.In the end, the final account of profit and loss is something that each investor must bear themselves.

Now, let's get to the main point. If you want to trade stocks during the adjustment period, how should you do it?

First, let's talk about the general principles, and then discuss specific trading methods.

Principle one: Keep the position within a reasonable range.

If you want to trade in an adjustment market, you must control your position.

It is definitely not feasible to trade with a full position during the adjustment period.

A position of 30-50% is a more reasonable one.

At least when facing risks, such as a loss of 5-10%, the impact on the overall account is not significant.

There are opportunities to make money, whether it's making a small amount or a large amount.Controlling one's position does indeed lead to not making a lot of money, but there is no big money to be made during the adjustment period anyway.

The significance and value of controlling one's position lie in compressing the risk to a controllable range, so as not to suffer losses due to an inability to control oneself.

Because after the adjustment period, it is the time of great opportunities, and the more capital you have, the greater the opportunity.

Principle two, always set a stop-loss line.

During the adjustment period, buying stocks without a stop-loss line is absolutely indispensable.

In case of extreme situations, if the stock price continues to plummet without any stop-loss, it can be fatal.

You think about entering the market to make some money, but in the end, you are robbed and stripped of everything.

Therefore, you must first prepare for the worst, have a stop-loss line, and ensure that the loss is limited to a certain extent.

Only by controlling this risk can you try to make a market during the adjustment cycle.

Principle three, manage the expectation of returns.For profit expectations, it is also important to manage them well.

If others are losing money while you are making money, it shows your great ability, but no matter how great your ability is, it is still difficult to go against the trend.

Therefore, there must be an expectation here, how much you can earn, rather than endless greed.

Usually, being able to achieve an alpha return of 10-20% above the market is already very good.

Don't expect to double in the 1-2 months of the adjustment cycle, which is really unrealistic.

Trading against the current also has a difficulty, which is how to make choices.

How to select stocks? Where is the buying point? When should you sell, settle in the short term, or lay out for the long term?

Compared to the above principles, that is, the overall framework, these are the most difficult.

Let's talk about a few key points and core issues.1. In terms of trading frequency, short-term trading is the main focus.

It is not that long-term investments cannot be made during the adjustment period; it's just that long-term investments imply that losses will be the primary outcome during this period.

For long-term positioning, the best approach is to start at the end of the adjustment period or when the market is just beginning to rise.

During the adjustment period, long-term stocks are not necessarily going to rise against the trend; more often, they will follow the general trend.

Only by short-term speculation on some hot spots is it possible to rise against the trend and achieve certain returns during the adjustment period.

The short-term trading here does not mean that you must buy today and choose to sell tomorrow, but the holding period generally does not exceed 3-5 trading days.

Because during the adjustment period, even if funds make waves, they will not stay for long; beyond that, it is considered excessive.

2. In terms of trading strategy, buy big when there is a big drop, and buy small when there is a small drop.

Choosing to chase the rise or absorb when the market is low during the adjustment period is an art.

There is no absolute right or wrong in this, but the suggestion is to buy big when there is a big drop and buy small when there is a small drop.After all, after a significant drop, the release of risk will be more substantial.

The significant drop referred to here is not about individual stocks, but about the index.

That is, during the major index decline phase, one should be as cautious as possible, and in the later stages of the decline, one can build positions based on the extent of the drop.

Try to ensure that your cost is relatively low, so you have the initiative.

The strategy of chasing rises, during the adjustment period, is actually quite risky.

Because the funds may fully utilize the T+1 trading system to kill the following plates, which can easily lead to significant losses within 1-2 trading days, so one must be sufficiently cautious.

3. In terms of stock selection strategy, trading volume is the core, and it is important to look for hot spots.

There are actually two strategies for stock selection during the adjustment period.

One is to look for defensive sectors, that is, sectors that are resistant to falls.

But in fact, sectors that are resistant to falls do not necessarily mean they will rise. If you want to be resistant to falls, you can simply be empty and there will be no fall, so why choose the ones that fall less?Here is the English translation of the provided text:

Another strategy is to look for hot spots and see where the money is going.

During the adjustment period, there are more declines than gains, but the part that rises is where the funds are gathering or clustering.

There are always rising sectors and stocks, which must be the result of a large accumulation of capital.

Trading volume cannot lie; where the funds are, the opportunities are.

Some local hot spots are where funds concentrate to release emotions during the adjustment period, which may lead to significant speculation.

Therefore, it is important to keep an eye on the daily hot spots and the rotation of sectors to ensure that funds can find a way out and also to ensure that there is money to be made when participating.

4. In terms of profit-taking strategy, 5-10% is appropriate to accumulate profits.

The issue of profit-taking will not be elaborated too much, but the proportion of profit-taking is recommended to be set at 5-10%.

This 5-10% is for most sectors, not necessarily for individual stocks, which can be slightly higher.

For sectors that rise against the trend, having a surplus return of 5-10% is actually quite good.

(Note: The translation is provided in a clear and accurate manner, ensuring that all key points from the original text are covered in the English version.)The goal during the adjustment period is not to become extremely wealthy, but to accumulate profits.

If an adjustment period lasts 1-2 months, and there is a return of 5-10% during this time, then with 2-3 adjustment periods in a year, the overall return can reach 10-20%.

From some perspectives, this is no longer about how much you earn, but it's already a legendary achievement.

Expectations for going against the trend must be lowered, as the mindset determines whether you can make money during the adjustment period.

Never think about making a lot of money against the trend, because the capital is speculating on some directions during the adjustment cycle, also just for the purpose of risk avoidance.

When you get the risk avoidance and speculation main line wrong, it is easy to have problems.

Once you do not follow the discipline, in such an adjustment cycle, it is entirely possible to lose money quickly, or even lose a lot of money.

Don't end up with nothing to show for your efforts, losing both the battle and the war.

More often, choosing to be patient and waiting is the best way to deal with the adjustment.