Guide:
The market teaches you to be an independent thinker. But as long as you're an independent thinker, you're bound to make mistakes.
1. Random transactions lead to low success rate and surge in transaction costs
1. Short-term trading
There are two main reasons for short-term trading losses:
① Random transactions lead to a low success rate and a surge in transaction costs;
②The low success rate causes anxiety, the more you do it, the more you get out of control, and you end up losing a lot of money.
2. Midline trading
The core premise of swing trading is "buy low and sell high within a range". However, traders who are accustomed to oscillating operations will often be defeated by the impact of the general trend if they are not vigilant when the pattern is broken (the original low point or high point is pierced).
In terms of individual stocks, it is more difficult for those with high medium and long-term volatility to outperform the index. Traders should pay attention to individual stocks with low to high volatility, which are more maneuverable.
If stocks with long-term low volatility suddenly fluctuate up and down, it is a sign of a change in the market. The volatility of strong stocks has become lower, and it is necessary to beware of negative declines.
3. Long-term trading
The most critical reason for losing money: it is not that the stocks are poorly selected, but that they are too expensive to buy.
Facing a good business, a good manager also needs a good price.
Under normal circumstances, long-term gold stocks are accompanied by huge controversy at the start-up stage, and then all the way up and all the way, and finally there is no controversy. Everyone is optimistic about it, and it will reach the top.
Controversial stocks are stocks to watch. Without attention, it is a pool of stagnant water.
2. The profit and loss are from the same source, and the consistency of opening and closing positions is maintained
Realizing that losses are part of trading is very important thinking.
After all, there is no one who does not make mistakes, and if he makes a mistake, he may lose money.
Therefore, when formulating a trading plan, you need to take into account the possibility of mistakes, just in case.
Count more wins, count less and win less.
Only with the idea of "just in case" can we have awe of stop loss.
After realizing the importance of stop loss, clarify the basis for stop loss, and maintain the consistency of opening and closing positions, in order to make further profits.
Because of what to buy, you should sell because of what, which is the same principle as profit and loss.
It is worth mentioning that the stop loss should be simple and not complicated, and the mood should be calmed down quickly after the stop loss.
In short, three points must be achieved in the transaction: planning in advance, executing in the event, and recovering afterwards.
3. Think like a trader, not an analyst
1. Short-term stop loss
①The concept of opening a position interval: within the interval, there is no talk of stop profit or stop loss. If the price breaks through the range, you need to consider stop loss or take profit;
② Stop loss position: This is the bottom line for taking risks, which determines where you exit;
③There must be a trader's thinking, not an analyst's thinking. The method of judging whether to stop loss can be technical position, time or event, or even a conflict of ideas in communicating with others, but it may be a good habit to avoid risks first.
2. Medium and long-term stop loss
① Be wary of whether the shock range is broken. When the original high and low points are broken down, it means that the market may be one-sided;
②The formation of the divergence is reversed: the divergence at the top of the high position and the divergence at the bottom of the low position. If not long after a top divergence, an indicator breaking through the previous top divergence is formed in the same time period, indicating that the divergence has been reversed.
③Periodic resonance: If you are dealing with daily K-line fluctuations, you should pay attention to the weekly K-line and hourly line. When the direction of these two is opposite to the direction of the daily K-line, go short or long. That is to say, follow the general trend and go against the small trend.
4. Trading is anti-human, and there are few winners
"Cut off losses and let profits run!"
That being said, it's hard to do because trading is anti-human.
When losing money, most people like to take risks and fight to the death; when making profits, they are afraid of profit-taking, and take the move of avoiding risks and closing positions.
Conversely, the winner tends to protect the principal as much as possible, and use the profit to take appropriate risks, or even take particularly large risks.
Sometimes, seeing the part of the profit turned back, still unwilling to leave the market, but holding the mentality that the profit can be returned, the final result is that there is no profit, or even a loss of the principal.
Regarding this point, we need to understand: floating take profit means that there are many opportunities, so we don't have to stick to this one opportunity. No bull market is impossible to miss.
At the same time, everyone is always dazzled by the victory, and the floating stop profit is a safety valve to keep people vigilant.
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