Advice from a veteran investor who lost a million: The three characteristics of
On the surface, it seems easy to make money in the stock market, with stocks soaring every day. However, in essence, the stock market is no different from other industries; it is also very difficult to make money, and only a very small number of people can achieve success. These few people possess personal qualities that most people do not have. In my view, the reason why ordinary people are ordinary is because they have common psychological characteristics: timidity, laziness, short-sightedness, eagerness for quick success, and conformity, all of which are the archenemies of success in stock trading or investment. To achieve lifelong success in stock trading, one must have the virtues that ordinary people lack: independent thinking. Many people learn the wealth-building techniques of investment masters like Buffett and Soros or learn various technical analysis techniques, but ultimately, they do not succeed in the stock market.
Why is this the case? It is because they blindly copy the sayings and techniques of these masters without truly facing the market issues of A-shares and engaging in deep independent thinking.
People with independent thinking are always a very small number and are always lonely.
Independent thinking is a quality that investment masters must possess. Decades ago, a famous analyst talked about how a certain stock had a brilliant future and excellent performance. Unexpectedly, a fund manager in the audience said, "I want to hear about the risks of this stock." The challenging fund manager was the world-renowned investment master John Neff.
Advertisement
Firstly, in stock trading, we should never do three things:
Firstly, never operate with a full position. After a full position, you will become very passive. The market never lacks opportunities, and the opportunity cost of a full position is very high.
Secondly, never bet on a single stock, even if you are very optimistic about one. Don't put all your eggs in one basket. When investing, we must always maintain a sense of awe and respect. It is recommended to hold three stocks, preferably in different industries.
Thirdly, never use leveraged financing. This mentality of seeking quick success is doomed to fail. We must take one step at a time and leave one footprint at a time.
"Ultra-short line" refers to a trading method where the holding time after purchase is very short, but the profit is relatively high. The shortest holding time may only be a few seconds. Of course, when you see the transaction on the plate is particularly strong, and the price is rising or falling directly, you can hold more for a while, but generally, do not hold overnight.Short-term stock selection cannot ignore the three characteristics of stock selection:
1. Security
Generally speaking, the main reason affecting security is the uncertainty between investment and the recovery of principal. Investors must understand the credit rating, status, profitability, and development potential of listed companies. The security is closely related to the operating conditions of the issuing company.
2. Profitability
Profitability often conflicts with security. The greater the risk of a stock, the greater the potential return it may obtain.
3. Liquidity
The liquidity of a stock is very important for investors. It can meet the investors' temporary need for funds in a timely manner, making stock investment flexible.
How to play ultra-short-term well, look from the following five aspects:
1. Have keen market insight and sufficient time to watch the market.
2. Be able to timely discover the short-term focus of the market. In fact, there are always a few stocks that ignore the overall market trend and perform well in the short term, while driving the entire sector. The object of our short-term operation is to choose such stocks that are widely concerned by the market, but most people are still hesitant and dare not to get involved.3. When selecting individual stocks in popular sectors, it is essential to participate in the strongest leading stocks in the trend. Many investors buy stocks with red lines for short-term trading, rather than considering the safety of funds to participate in stocks that are catching up or following the trend.
4. From a technical analysis, ultra-short-term candidate stocks must have an upward 5-day line with a certain slope to be considered. The timing of the purchase is when the stock stabilizes after a long and strong positive line without significant volume. However, sometimes when encountering stocks that have a continuous surge in volume, especially those that have started from a low position with a surge in volume, and the next day's volume ratio is several times or even tens of times larger, it is possible to chase the rise and enter the market. In addition, when you hold the base position of a certain stock and encounter the bulldozer trend just starting, you can boldly intervene to do "T+0", but do not have illusions about stocks that are expected to reach the daily limit price before the afternoon closing. Facts have given us too many lessons!
5. The most important thing in ultra-short-term operations is to set a stop-loss point. It is essential to remember that short-term is speculation, and once speculation fails, you must have the courage to stop loss and exit. This is an iron discipline.
Introduction to Ultra-Short-Term Tactics
1. Be brave to intervene in strong stocks for the second wave during "refueling in the air"
Specific operation: If a stock is bullish and you haven't had the chance to ride on it, there is still an opportunity, which is when this dark horse is running and taking a break to refuel and drink water. Technically, it is during the second wave adjustment stage after the first wave, taking the opportunity to intervene, which is to buy during the "refueling in the air" that people often say, and to eat its second segment.
2. Break through the previous high with a limit-up board, and wash the plate with a huge negative line
Specific operation: The limit-up board passes the previous high, and the second day closes with a huge negative line. If it dares to turn red on the third day, follow it without hesitation.3. Continuous small positive push, followed by a volume contraction bearish line method
Specific operation: Continuous small positive push, followed by a bearish line, buy at the end of the day. This type of chart pattern implies that the stock price will enter an accelerated rise in the future!
Short-term Seven Sevens Rhyme
Rhyme one, High and low consolidation
Wait a bit longer. When the market is in a horizontal consolidation, do not enter the full position at this time, because after the consolidation, there will be a change in the market. Do not make subjective decisions to enter or exit, wait for the breakthrough to be clear before taking action. Rhyme two, Buy on the line with a bearish line
Even if you buy wrong, you have to buy; sell on the line with a bullish line, even if you sell wrong, you have to sell. The "line" here mostly refers to moving averages, or key support and resistance levels. Rhyme three, Do not sell without a surge
Do not buy without a dive, stay in a horizontal position. This is the most basic truth and the fundamental truth. You must thoroughly understand this sentence, otherwise, you will not be able to profit in the stock market. Rhyme four, Prepare before investing
It is better to enter less than to exit more. No matter how confident you are when you start, do not buy all your funds at once, which means not to be full position. Be prepared for a decline or being trapped before starting, so that there is room for operation later. Rhyme five, Do not be attached to a huge bullish line
Leave decisively at the end of the day. Whether it is at a high or low position, a huge bullish line appears, and a short-term adjustment is needed, even if it is a limit-up, you should also leave. Rhyme six, Do not be attached to hot stocksHoldings should be frequently changed, from the beginning of trading to the end, and it all ends up in vain. All short-term popular stocks are speculation, and after the speculation, the funds will leave the market. Based on the situation, we need to adjust our positions appropriately. Motto seven, the rising gap is full of hope for a big increase. On the way up, the K-line rises slowly, and a high-opening positive line appears, and the volume also increases, indicating that the market has entered an accelerated phase.
Most retail investors mainly operate in the short term, not only because short-term operations are more intuitive, but also because they can bring huge returns in a relatively short period of time. Instead of slowly choosing a medium to long-term stock, it is better to choose a short-term stock that can bring excitement. Elderly people invest in stocks to prevent Alzheimer's disease in the middle and old age. If they choose a medium to long-term stock, isn't it a waste of effort and not exciting at all? I will explain several short-term buying signals, and investors who can grasp these points to buy will not lose a lot of money.
The above is a summary of my 15 years of practical experience and technology in stock trading, which may not be suitable for everyone. Everyone needs to combine their own practice to use and summarize. As a trader, the most terrible thing is not that there are problems with your technology, but that your cognition is not enough, and you fall into these trading traps without knowing it! There is no invincible trading system, only people who use the trading system invinciblely! This is the truth, and the trading system will eventually return to the people!