Daily Investment Tip: Grid Trading, the Secret to Automatically "Casting a Net to Catch Fish" in the Stock Market!

Investing without research is like playing poker without looking at the cards. It is bound to fail!

(This is just for knowledge sharing and does not constitute investment advice.)

In the ocean of the stock market, numerous investors are striving to find methods that can make them profitable. For novice investors, the situation of "buying and the stock price immediately dropping, selling and the stock price immediately rising" seems to be a curse that is difficult to get rid of. Today, we are going to learn about a magical method that can be said to be a cure for this "handicapped trader" dilemma - the grid trading method. It is just like installing an autopilot for our stock account. It is easy to operate, and even friends who don't understand complex investment techniques, such as aunties in the vegetable market, can easily get the hang of it.

What exactly is grid trading?

To better understand grid trading, we can imagine such a scenario: selling potatoes in the vegetable market. When the price of potatoes is 3 yuan, we purchase 10 jin. If the price drops to 2.8 yuan, we buy another 10 jin. When the price rises back to 3 yuan, we immediately sell the 10 jin that we bought at a lower price. If the price continues to rise to 3.2 yuan, we sell another 10 jin. This way of operation, "buying more as the price drops and selling more as the price rises", is the underlying logic of grid trading. From a professional perspective, it means setting up price intervals in advance, just like drawing price grids. When the stock price drops to the corresponding grid, we buy, and when it rises to the corresponding grid, we sell.

Why is grid trading considered a novice's magic weapon?

1. Cures the "shaky hand" syndrome: With grid trading, the system will automatically place orders according to the rules we set in advance. Investors no longer need to constantly stare at the candlestick chart and operate in a flurry when the stock price fluctuates.

2. A money-making machine in a volatile market: When the market is in a volatile situation with ups and downs, many investors will suffer losses due to the large fluctuations in stock prices. However, by using the grid trading method, it is possible to make a profit in such a market. While others are losing money, investors using grid trading can count their earnings.

3. Forces stop-loss and take-profit: Grid trading is like a double insurance for the account. Through the established buying and selling rules, it prevents investors from missing the best selling and buying opportunities due to greed or fear. There will no longer be situations where "profits are not realized and finally turn into losses".

Let's look at an actual case: Xiao Wang used 100,000 yuan of principal to operate a certain ETF. At that time, the current price of this ETF was 2 yuan. He set a grid interval of 0.2 yuan. That is to say, he would buy 5,000 shares every time the price dropped by 0.2 yuan and sell 5,000 shares every time the price rose by 0.2 yuan. Three months later, although the price of this ETF was still fluctuating around 2 yuan, Xiao Wang obtained a profit of 18% through 46 buying and selling operations! It can be seen that the grid trading method can bring good returns in a suitable market environment.

Five Steps to Create Your Profitable "Fishing Net"

Step 1: Select the Right "Fishing Pond"

We need to choose investment targets with large fluctuations, just like fishing in a "fishy" pond. It is best to choose ETFs or stocks with an average daily fluctuation of more than 3%, and the variety with a handling fee lower than 0.1%. At the same time, we must definitely avoid stocks that rise or fall sharply in a one-sided manner. Because the trend of such stocks is difficult to predict and they are not suitable for grid trading.

Step 2: Draw the "Grid Lines"

Here is a universal formula: Grid density = Average daily fluctuation range in the past three months × 0.8. For example, if the average daily fluctuation of a certain ETF is 2%, then its