The Essence of a Stock Trading Master's Mentality
I:
In the movie "A Better Tomorrow," Mark said, "Don't think that after reading a few books, you can join the underworld. Have you ever been threatened with a gun to your head and forced to drink a whole bottle of whiskey?"
The same applies to stock trading. It's easy to read a few books on stock analysis, to analyze things thoroughly, and even to make hundreds of thousands in a few months. However, my friend, when you start to feel a bit elated, when you're calculating whether to make ten million this year or next, I want to give you a wake-up call: buddy, take it easy, nothing is easy, and stock trading is no exception.
Heaven is fair, it gives you one thing, and it takes away another. In layman's terms, don't just see the thief eating meat, you haven't seen the thief getting beaten.
II:
If you've ever made or lost half your lifetime's salary in a day and remained unfazed, with peaceful dreams at night, then congratulations, you're beginning to enter the initial stage of stock trading, that is to say, you're starting to get the hang of it. However, the cost of this entry is too high, perhaps with premature gray hair, or family separation. Many more people have already fallen forever on the snowy grasslands of the Long March.
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Therefore, my advice is: First, I do not recommend that you trade stocks. Second, if you insist on doing it, then trade with less money. Third, if you start losing money, that's a good thing. If you start making a lot of money, then this person is almost ruined.
Why? Because money comes too easily. A single thought of greed opens up eighty thousand obstacles. When I hear many people telling me how much they've made, I just smile; when I hear many people eager to invest more, I can only shake my head. I want to persuade them to stop, and they will say: Uncle, you're old, too timid, wealth is sought in danger, you know?
Yes, wealth is sought in danger, but Stephen Chow once said: "Ball, it's not played this way." Stocks are not done this way either.III:
Wealth does not enter the door of the impatient; those who gamble everything ultimately end up with defeat. There are indeed people who have become wealthy through stocks, but they are as rare as phoenix feathers and qilin horns, and it is due to the convergence of favorable circumstances and coincidences that an average person can become a great master. However, those who are extremely clever and have exhausted all their schemes only manage to secure a modest living. Who can truly understand the taste of such a life? How much can one sigh about the fate of life?
In my opinion, 99% of the books on the current stock market that teach people how to make money are not going to make you much money. The real method of making money is just a piece of paper. I won't tell you, and you will never see through it; if I tell you, you will say, "Oh, just this?"
There are thousands of volumes of false teachings, but a single sentence of true teaching. For this single sentence, some people may have been pondering for decades without fully understanding it.
IV:
Time is an artistic master; it will slowly smooth out your excessive profits and make you return to being an ordinary person. Do not fantasize about getting rich overnight, as it will cause you to lose your sense of balance.
So, please remember three words: take it slow.
When you learn to slow down, you will start to view yourself and your environment more objectively.
When you are more objective, at least you can be a little safer.Only when you can make yourself a little safer can you effectively ensure your returns.
When you can effectively ensure your returns, your wealth can gradually accumulate.
Small wealth comes from oneself, and great wealth is in the hands of heaven. Whether stocks can change your destiny does not lie in the stocks themselves; they are just a tool. The key lies in your own heart.
A single thought can lead to heaven or hell. There are many things in life that are more important than stocks, and this is something you should never forget.
Section Five:
1. Capital control and operational ability are directly proportional. Even experts' 100% investment is conditional.
2. Earn three points of profit with three points of ability. Ask yourself, how much ability do you have?
3. The selected individual stocks for participation must be in an uptrend adjustment, rather than an uptrend in an adjustment trend. This point requires careful distinction.
4. Firmly improve your own operational analysis and decision-making system. When you have the technology in your heart, there is no market in your eyes. Prices, news, and so on, sometimes do not work in the Chinese stock market. The highest state of stock trading is to have it in your eyes but not in your heart. If you achieve this, you may already be an expert.5. Making a profit by selling is a successful operation; waiting for a higher profit to sell is a speculative operation.
6. Technical indicators are signals to buy, but they are not the reason to buy. An upward trend is the reason to buy. Buy signals in an upward trend are worth buying, while buy signals in a downward trend are temptations. A blind man must know what an elephant looks like before touching it; one should have both hands before touching the elephant.
7. The current market is an arena for institutional competition. A drop of blood from an elephant may drown an ant. Knowing how to escape may not be the right choice, but it is the smartest and most practical method. When you no longer say "if" to yourself, you have already made progress.
Classic stock market mantras:
Insider Mantra One: Do not sell without a surge, do not buy without a plunge, no trading in a sideways market.
"No trading in a sideways market" is something that should be paid special attention to in warrant operations. When trading in a sideways market, if the market reverses, you will inevitably stop losses or chase gains, both of which are not advisable. The price difference is not significant during a sideways market; if you lack patience and trade multiple times, it will inevitably lead to a loss in transaction fees.
Insider Mantra Two: Buy on the shadow, not the light; sell on the light, not the shadow. Act against the market to be a hero.
This mantra is similar to the first one, explaining the principle of acting against the market. The first mantra is about short-term trading, while the second is about medium-term trading. That is, when buying, choose to buy when the K-line closes with a shadow line; when selling, choose to sell when the K-line closes with a light line.
Insider Mantra Three: Wait a little longer when the market is in a high-low consolidation.This mnemonic includes the content of "no trading in a sideways market" from the first mnemonic, but the main idea is to say that when a stock or warrant has continued to rise or fall for a period and then enters a sideways state, there is no need to sell all positions at a high level, nor is there a need to buy all positions at a low level, because after consolidation, the market will change direction. Therefore, the period of consolidation should not be subjectively decided to build or clear positions. If it changes downward from a high position, it should be cleared in time to avoid losses; if it changes upward from a low position, it should be chased in time to avoid missing out.
Internal Reference Mnemonic Four: After a high position is consolidated, it will rise again, seize the opportunity to sell quickly; after a low position is consolidated and reaches a new low, it is a good time to buy all positions.
This is a further detailed explanation of the third mnemonic, describing the best opportunity in the third mnemonic. Stock prices and the market often have new highs after high consolidation, and new lows after low consolidation, so it is said that you should wait for the direction of the change to be clear before starting. For example, if the market changes upward after high consolidation and reaches a new high, this is the best time to sell; and if the market changes downward after low consolidation, this will be the best time to buy all positions.
Internal Reference Mnemonic Five: Being trapped and replenishing positions to break even is to seek to recover the principal, and seeking profit is greed.
This is a common mistake that people often make. When you are trapped, you have replenished a position at the technical support level, or you have replenished a position with an increased amount, but you must clearly understand that the purpose of doing so is just to recover the principal. When the rebound does not result in a loss, you should sell in time, but many people see the stock price rise, and they think that if it rises again, I will make a profit, and how much I will make, but the result is that it falls back again, and is trapped again with a heavy position, and this time there is no self-rescue funds, only waiting to be executed. Therefore, this is listed to remind everyone.
Internal Reference Mnemonic Six: Before starting, admit the mistake, it is better to buy less than to buy more.Inside Tip No. 7: A streak of red amidst the green, seize the moment to buy, don't let go.
Inside Tip No. 8: After one push and two recommendations, it still doesn't rise, so it has to shake the warehouse down again.
This tip is very important, it's an unwritten rule in the stock market. It is mainly about stocks. This situation is usually: a stock has been adjusted for a long time, close to the end, mostly in a state of platform consolidation, and people start to recommend it one after another. You look at the fundamentals and they are indeed good, but when you buy it, it doesn't move much. One day it suddenly breaks down, you curse and sell it, but you will see that its K-line has been rising after making a pit shape, and it easily broke through the original consolidation platform, leaving the dust behind. That's how you were left behind. Everyone is optimistic, but it just doesn't rise, and after 20 days it suddenly breaks down, the K-line made a standard pit, easily broke through the previous platform, and has already set a new high.
Inside Tip No. 9: A wave rises on a calm water surface, be careful of the big waves behind.
If I am wrong, I must quickly get out of it. There is a saying that as long as the green mountains are there, there is no fear of no firewood to burn. I must preserve my strength and make a comeback.
No matter when you suffer a setback, it will be very uncomfortable in your heart. Most traders always hope to immediately make up for it when they suffer a huge loss, so the volume of transactions becomes larger and larger, hoping to make up for the disadvantage at one stroke. But once you do this, it is destined to fail. After being hit, the correct approach is to immediately reduce the volume of transactions or stop trading. What you need is not to earn how much money to make up for the loss, but to regain your confidence in trading.Some traders continually lose money primarily due to a lack of patience, which leads them to overlook trading principles and enter trades impulsively without waiting for a clear trend or a market they can control.
If the number of profitable trades is decreasing, you must be patient and wait. When the market trend is completely opposite to your prediction, you should choose to exit.
You must hold onto your good trades and reduce your bad ones. If you can't hold onto your good trades, how can you compensate for the losses caused by bad ones? Many profitable traders end up giving back all their earnings because they lack the patience to hold onto winning trades and are unwilling to stop trading when they are losing.
A common mistake made by many traders is trading too frequently. They don't carefully choose the right trading opportunities and want to enter trades as soon as they see market fluctuations. This is undoubtedly forcing themselves to trade instead of waiting patiently for good trading opportunities.
Experts can profit because they have done a lot of patient work before entering the market. However, many people start to take trading lightly after making a profit, and their operations become more frequent. The following losses will make them unable to cope, leading to huge losses, and even losing their old capital.
The worst trades come from impulsiveness. The most destructive mistake in trading is excessive impulsiveness. Everyone should follow established trading signals and never hastily change their trading strategy due to a moment of impulse. Therefore, not being impulsive is the first element of risk control.
To engage in trading, you must learn to control risks. You need to learn to make the worst plans, so you must operate in small quantities and control each loss between 1% and 2% of your capital.
Point nine: Learn to stay calm in trading. Traders are like boxers. The market can deliver a heavy blow at any time, and you must stay calm. When you lose, it means the situation is unfavorable to you. Don't rush, take your time. You must minimize losses and try to preserve your capital as much as possible. When you suffer a significant loss, your emotions will inevitably be greatly affected. You must reduce the volume or stop trading, and consider the next trade after a period of time.
Whether you make a big loss or a big profit, you must remain calm and analyze every trade every day to see if there are any violations. For good trades, think about why they were successful, and for bad trades, you need to self-reflect and find out the crux of the problem. Therefore, if you want to do well all the time, you must pay great attention to every trade in your daily life.
Most people know the trading principles, but the real experts are those who still firmly implement these principles when the market appears in extreme conditions.The reason why experts have a high rate of return is that they usually fear the market. The fear of market trading makes them have to choose the right time to enter the market carefully. Most people will not wait until the market is clear before entering. They always enter the forest in the dark, while experts always wait until it is light before entering. They do not predict the direction of market changes before the market starts, but always let the market changes tell them the direction of the market changes. They choose to attack only when there is an absolutely safe opportunity, otherwise they give up.
Trading strategies need to be flexible to cope with market changes. The most common mistake made by most traders is that their trading strategies remain unchanged. They often complain about how the market is completely different from what I think! Why should it be the same, isn't life always full of unknowns?
Don't be intoxicated by the joy of profit. You should know that the most difficult thing in the world is how to continue to make a profit. Once you make money, you will expect to make more money. In this way, you will forget the risk, and you will not doubt the correctness of the established trading principles, which is the cause of self-destruction. Therefore, you must always be cautious, be very cautious when losing money, and be even more cautious when making money.
In the trading process, you need to learn self-discipline and fund management. Try to relax when operating. If the position is unfavorable, then exit, and hold if it is favorable. What you should think about is how to reduce losses, not how to make more money. When your trading situation is not good, reduce the volume or stop trading. When the trading enters a good state, increase the volume of trading, and never enter the market rashly when you cannot control it.
When trading, you need to learn to be vigilant, because success in this industry comes quickly and goes quickly. The blow always appears when you are complacent. The speed of destruction of anything is far greater than the time it took to build it. Some things take ten years to build, but can be destroyed in a day. Therefore, you should always strictly restrain yourself.
The vast majority of people have a gambling mentality when trading, and like to trade heavily. Therefore, you must change yourself in this aspect. From ancient times to the present, no one who has operated heavily has not failed. You must control each loss within 2%.
Trading according to the chart is like surfing. You don't need to know the reasons for the ups and downs of the waves. As long as you feel the rhythm of the waves and master the timing of surfing, you can become a surfing master.
Some people change their trading system when they lose money, while some people don't believe in the trading system at all. They doubt the instructions issued by the trading system, so they often enter and exit the market according to their preferences. However, experts always follow the trading system. Engaging in trading is not for excitement, but for victory.
The real trading experts are not competing for the amount of instant profit, but for the length of time they can make money and live longer!
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