On the loss:
I dare say that most people in this market are "blind". Sometimes we can bargain and haggle with vegetable vendors for a few cents, or we can go to several shopping malls for a set of clothes and shop around.
But people who enter the market are obviously much more "bold": they don't know what the risk is, and they don't care about their own weight. Just with the idea of "maybe I can make money", you can spend your life savings and hard-earned money. Put into the market without hesitation, what will be the consequences? For example, if a person who is not familiar with water falls into a crocodile pond, there is usually only one result: if he is not eaten by a crocodile, he will be disabled for life.
If it is a "dangerous" thing for people who are new to the market to enter the market without understanding the risks, well, for those who have lost money or are "deeply locked up" in the market, "risk" It means that real wealth has shrunk. As an investment, loss is inevitable and not a terrible thing. On the contrary, I personally think that loss is a very "precious" thing, but the premise is: you must be clear and clear until you are in the "bones" Find out the reason for the "loss" in ", otherwise, the loss means to you:
(1) A loss is also a loss;
(2) The same error will happen in the same way;
(3) Expensive tuition fees have to be paid indefinitely.
Just like a "confused" person, "confused" went to the battlefield, and then was killed "confused".
It's hard to imagine that you can make money without even understanding "how to lose money". Or it can be said that if you make money, you can only make money temporarily and occasionally, and you will inevitably lose money in the end. In fact, most investors do not know the real reason for the loss. In reality, many people explain the reason for the loss in this way:
(1) greedy
(2) fear
(3) unstable mentality
(4) Technical analysis is not good enough
(5) Blindly follow the trend
(6) Chasing ups and downs
(7) No opinion, listen to the news
(8) By feeling, by luck
(9) "Don't understand at all" (simply and frankly enough)
(10) The market environment is harsh and the bankers are vicious
(11) Blaming the government, complaining about policies, etc.
If it is said that the above "reasons" are all nonsense, it is equivalent to talking in vain, I believe that many people will object. In fact, each of the above "reasons" can happen to every investor, but if it is necessary to summarize the reasons for losses in this way, the results will be very tragic.
Because you will find out: Why is every loss always different? Why is this wrong? Is it wrong to do that? It's a pity that before you find out all the reasons for the loss, you may have lost a lot of money. If you add a "why" in front of various "reasons" and then think deeper, it may be easier to find the real reason for the loss.
In my opinion, the various "reasons" for the above losses are actually just the specific methods of the losses, not the real reasons for the losses. There are many ways to lose, but there is only one reason for the losses. In other words, just because you don't know the real reason for the loss, you can only keep trying various "loss methods" and then constantly sum up the "reasons". Every loss is different. What is the real reason for the loss?
The principle of losing money is actually very simple: when making a profit, it is more difficult to make money from the beginning to the end than reaching the sky; when losing money, it is easier to cover from the beginning to the end than eating. This principle applies to investment markets all over the world, so it can also be called the "truth about losing money".
I have personally played the same game with different investors in many different places, and found that the final results are surprisingly consistent. This game is very simple: let all participants buy at any price at will, and then the price fluctuates and rises, and the final increase reaches more than 100%. Each person can only have one chance to buy and sell. Then, let everyone repeat the buying action just now, and then the price fluctuates and falls, and the final drop exceeds 60%.
The final test results of the game show that: in the rising stage of shocks, 65%-70% of people will choose to close within the range of 10% profit; Close positions within the range; only about 10% of people can persist in making a profit of more than 50% or sell at the highest level.
In the stage of turbulent decline, only 20%-30% of people will choose to take stop loss actions within the range of 10% loss; when the loss reaches 15%-20% or more, most people will choose to continue to "stick to it"; at least 70% of people can stick to it from the buying price to the lowest point.
From the perspective of high probability: if you can make money from the beginning to the end, and you can also do it from the beginning to the end, the ratio of profit to loss is 50%: 50%. However, in reality, there are very few people who can make money from the beginning to the end, but there are many people who can make money from the beginning to the end. That is to say, the probability of most people making money in practice is absolutely far away. far below the 50% ratio.
If the principle of "a loss of 50% is equivalent to a gain of 100%" is added, the probability of making money for most people will be even lower. This is the most fundamental reason why most people lose money.
Facts have shown that when most people make profits, what they often lack the most is "greed". When people lose money, they tend to be more courageous than anything else, and the bolder the loss, the bigger the courage. With such a high probability of human nature, is there any reason not to "eight losses and two gains"?
This principle is the same all over the world.
It can be said with certainty: if you don’t understand the principle of loss, loss is inevitable; if you understand the principle of loss, it does not mean that you will be able to make a profit for a long time or survive in the market for a long time.
On greed:
There is a famous investment saying on Wall Street: "Greed is your own worst enemy." There is also a saying in China: "Greed is poverty."
Greed is one of the great weaknesses of human character, and I think very few people would disagree with this view. But how many people in the market can truly not be greedy? To put it bluntly, if you are not greedy, you will not come to do business.
In fact, all kinds of "greed" are constantly happening in the market every day. For example, after buying, it is obviously profitable, but because of being too greedy, it fails to sell the result in time and leaves the market at a loss. This is called "greedy". Insufficient"; Another example: The author has personally seen a private stock sale, but because he placed a sell order that was one penny higher than the current price, the transaction failed in the end and the price fell by 10%.
Another example: A stockholder talked about his experience. He bought (600663) Lujiazui in August last year. Horse? Unexpectedly, the stock plummeted and began to make up for the decline. The account also experienced a profit from 15% at the beginning to a loss of 40% at the end. This is called "greedy".
The author has one of his biggest "hobbies". Wherever he goes, he always likes to ask people "the reasons for losing money". The results of personal investigations show that "greed" is often one of the main reasons for losing money. "Greed is often the main reason for losing money" is almost the same rule in all investment (machine) textbooks. Just as Buddhist scriptures regard "greed" as a sin, various investment theories and investment methods also regard "greed" as a "demon" that everyone must get rid of. It seems that "greedy" is really not a good thing, just like "mouse crossing the street", everyone shouts and beats them. Here, we conclude that greed is one of the most important reasons for our investment losses.
Short positions are also a very difficult "forbearance". It can be said that if the trader does not learn to understand rest and short positions, needless to say, it will be hard work, and the final loss will naturally be inevitable.
Many books on investment have mentioned forbearance in a very high position, just like practicing the "Nine Yin Scriptures", the word "forbearance" can be regarded as the ninth level of martial arts. In fact, in addition to the "forbearance" of short positions, there are also various "forbearances" in the market, and different "forbearances" have different final results. Let's take a look at the various types of "forbearance":
(1) Endurance becomes gold
A stockholder friend said that he bought Yantian Port (0088) with all his positions at more than 8 yuan more than two years ago. Bear market, has been held so far. In his words, "At least two or three years will be covered, unless it is tripled in advance." This is the second such person I have met in +years.
It's safe to say that this is another "not normal" person. In a speculative stock market and under the background of "making big profits", it is really not easy to meet such a person, and I really admire this friend for being so patient. In fact, the final result of this kind of tolerance is often "becoming fine", so we call it "a hundred forbearance becomes gold".
(2) Small intolerance leads to chaos and big plans
A friend and I were short positions at the end of June last year. When the Shanghai Composite Index fell to 1514 points and then rebounded to 1700 points, because I couldn't bear to "watch it go up", I was thinking of "do it and run away". In the end, he couldn't bear the idea of killing it, and now he is forced to do "medium and long-term work". Originally, he was qualified and had the opportunity to steal the big bottom, but now he lost this opportunity because he was greedy for the small profits in front of him, and he was just dealing with the saying "Small intolerance leads to chaos and big plans".
(3) Endurance
At the beginning of July last year, a friend who bought (200055) Shenfang Big B asked me what to do? I said: "Either mix it cold, or chop it up, and then go home and have a good rest. It is best not to fry it in the future. Stocks.” As a result, he said that he had already lost 20% and couldn’t make a move, so he finally chose “Death”. Today, even if it is a loss of 30%, this friend is very willing to choose to cut the position, because the loss has exceeded 50% now. The result of "death forbearance" is not always "death", but often one "death forbearance" can give you "forbearance" or make you "forbear" so that life is worse than death.
(4) intolerable
This is the most tragic and tragic "forbearance". Anyone who has experienced "death tolerance" may have experienced this experience. The situation usually occurs when the market bottoms out and rises, when other stocks are so bullish and the "snail" in your hand is lying still, and if this situation lasts for a long period of time, even if you have suffered a lot of losses , It is estimated that you will eventually kill the "snail" "unbearably", and turn to chase other strong stocks, but it will not take long before you will find that the strong stocks do not know when they become "ceilings", and the "snails" "But turned into a big black horse, and finally had no choice but to "endure" again.
(5) endure humiliation
Sometimes when asked about "what should I do" who have lost more than 50% or who have been trapped for more than 2 years, there will always be some people who answer "reasonably" like this: "What are you afraid of? As long as I don't sell It doesn't mean it's a loss, if it doesn't work, I can still leave the stock to my son (or grandson)". The "big cause" that I failed to complete was left to the next generation, which can be described as "bearing the burden of humiliation".
But the fact is that a considerable number of people failed to complete this glorious task of "enduring humiliation" because they couldn't bear it; another part of them did "endure humiliation", but most of them left to the next generation " Junk" or "Century Set" (a stock that may not be able to solve the set in 100 years).
Years of experience have shown that: bear with it again and again, and when you finally can't bear to buy, you usually buy on the "ceiling";
We roughly divide "forbearance" into two types, one is "forbearance" (forbearance to earn) when making a profit or a short position; From the perspective of human nature, the former kind of "forbearance" can only be done by ordinary people (or "not human"); the latter kind of "forbearance" can be easily done by a little "normal" people. That is to say, the "endurance" of ordinary people in the state of loss is much greater than that in the state of profit or short position.
Some "forbearance" is beneficial to physical and mental health, and "forbearance" can also "cultivate positive results" in the end, such as Goujian's "stealing courage", and those who dare to hold short positions for a long time when the market is bad, and the most difficult one. "Tolerate earning". But some "forbearance" is harmful to people but not beneficial, such as "forbearance for feces and forbearance for urine". As long as we are human, we all have the ability to endure. The most important thing is that we must be clear: when to endure and when not to endure, as in trading, so in life.
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