Why do spot gold liquidation occur again and again? Will gold also liquidate its position?

Doing gold futures also liquidate it? Why does gold, the most valuable store of value, also experience liquidation? I believe many people want to know the reasons behind this, so the editor specially brings to you why the spot gold position is liquidated again and again. I hope you like it.

Why spot gold positions are liquidated again and again

Spot gold liquidation may involve multiple factors. Here are some possible reasons:

Excessive leverage trading: Some investors use a high degree of leverage when conducting spot gold transactions, which will increase the sensitivity of funds to market fluctuations. If the price fluctuates violently and maintenance margin requirements cannot be met, a liquidation may be triggered.

Unreasonable risk management: The lack of effective risk management strategies is one of the common reasons for liquidation. Investors may not have set stop-loss orders or failed to adjust stop-loss levels based on market trends, thereby taking on excessive risks. If the price fluctuates in the opposite direction and the loss exceeds the tolerable range, liquidation may occur.

Unable to adapt to market fluctuations: The spot gold market price is relatively volatile and is affected by a variety of factors, such as the global political and economic situation, geopolitical risks, U.S. dollar exchange rate, etc. If investors cannot correctly predict market trends and lack the ability to adapt to market fluctuations, they may face the risk of frequent liquidation.

Excessive trading and emotional decision-making: Some investors may trade excessively, adjust positions frequently, and make emotional decisions amid short-term market fluctuations. This behavior can easily lead to trading losses and the risk of liquidation.

To avoid frequent liquidations, investors should pay attention to risk management and adopt appropriate strategies. This may include setting leverage ratios appropriately, setting stop-loss orders, staying on top of market trends, maintaining discipline, etc. The important thing is to make prudent investment decisions based on your own circumstances and risk tolerance, and to constantly learn and improve your trading skills.

What is liquidation in gold speculation?

Investors in gold speculation often hear a word: liquidation. So what is liquidation? It means that the margin in the gold account is no longer enough to replenish the amount of your losses. At this time, the system will liquidate. For investors, a liquidated position equals a heavy loss of funds, and may also affect subsequent investment transactions. In severe cases, it may cause investors to withdraw from the investment market.

Do you have to lose money if your Bitcoin position is liquidated?

You have to lose money if your Bitcoin position is liquidated. Bitcoin is a highly profitable digital currency, and now everyone is investing in Bitcoin. Bitcoin is a virtual currency with a small quantity, but it can be used for cash and can be converted into most national currencies. Although Bitcoin is highly profitable, the consequences of a liquidation of this virtual currency are dire.

Stock position control skills

1. Control positions according to the stock market. For example, when the market falls, try to choose short positions and wait and see. When the market rises, you can keep more than half of your position and wait for the stock to rise.

2. When the market rises steadily, 70% of the positions can be reserved. After all positions in hand are profitable, the additional positions will be increased until the positions are full.

3. When the market adjusts, 40% to 60% of the position can be reserved. Reduce positions when stocks are high, buy when stocks are low, and close when profits are made.

4. In addition, be cautious in covering positions. For example, only stocks with obvious bookmaker operations and good mid- and long-term trends are suitable for covering positions. When the market is uncertain, it is not recommended to cover positions.

The following are some position management methods for stocks:

1. Funnel-type position management method

The initial entry capital is relatively small and the position is relatively light. If the market moves in the opposite direction, the market outlook will gradually change to adding positions, and then the cost will be diluted, and the proportion of adding positions will become larger and larger. In this method, position control is much like a funnel, with a large top and a small bottom, so it can be called a funnel-shaped position management method.

2. Rectangular position management method

The proportion of the initial amount of funds entering the market to the total amount of funds is fixed. If the market develops in the opposite direction, it will gradually turn into adding positions and adding positions. It will follow this fixed ratio and its shape is like a rectangle, which can be called the rectangular position management method.

3. Pyramid position management method

The initial amount of funds entering the market is large. If the market moves in the opposite direction, it will no longer be a position increase. If the direction is the same and the position is gradually added, the proportion of the position increase will become smaller and smaller. Position control is in the form of a big bottom and a small top, like a pyramid, so it is called the pyramid position management method.

How to choose stocks

Fundamental analysis is generally carried out from the company's main business, product market, historical performance, return on net assets, cash flow and price-earnings ratio. analyze. For example: The stock price changes of listed companies are controlled to a certain extent by the company's main business, product market and historical performance. The company's main business, product market and historical performance have a great impact on the stock. They are closely related to each other. Changes in the stock price also reflect the company's operating conditions to a certain extent.

1. Return on net assets: It represents a company’s ability to make money. Generally speaking, return on net assets can be used to measure the development speed of a listed company. The higher the data, the better it is for the company. The faster the development speed, the stronger the ability to make money.

2. Price-to-earnings ratio: The price-to-earnings ratio mainly represents the rationality of the company's valuation. The price-to-earnings ratio is not higher, the better, nor is it lower, the better. It mainly depends on the industry in which the company is located, and companies in different industries. , the judgment standards of P/E ratio are somewhat different.

Technical analysis is mainly based on K-line charts, moving averages, KDJ, Bollinger (BOLL), RSI and other aspects.

1. K-line chart: Under normal circumstances, we will analyze the shape of the K-line chart to determine the changing trend of the stock price. We can also see the strength of buyers and sellers from the K-line chart and analyze subsequent market development.

2. Moving average: Mainly through the analysis of short-term and long-term moving averages to find buying and selling points. Generally speaking, when the short-term moving average crosses the long-term moving average upward, this is the buying point. When the short-term moving average crosses the long-term moving average downward, it is a selling point.

In addition to fundamental and technical analysis, there is also news analysis. The analysis of news mainly allows us to pay attention to the hot spots in the market, the industries supported by the state, and various brokerage research reports, and use these news to analyze the possibility of stock rising and falling.