In the course of trading for more than seven years, I have summed up some experiences and lessons, which I think will be useful to those who are interested in stock trading.
The first rule is to study, study and study again.
No matter what you do, you should learn the relevant professional knowledge well. As far as stocks are concerned, many professional books and study materials are helpful for trading. And I still keep the habit of reading a new book every two or three weeks, because I think all books about my work can make me learn something new. Trading, like other industries, has been developing continuously. Only by constantly supplementing the latest knowledge can we keep up with the pace of trading.
Second, learn to think independently.
At the beginning of the transaction, I found that I had a great tendency: it was easy to believe other people's theories. Perhaps it is because I am not confident enough about my own level, so whenever I hear the analysis and theory of so-called experts and experts, I will easily accept it. In fact, this is not a good method. Everyone's trading style is different, so one must learn to think and trade independently. If you listen to every expert, you will often get nowhere in the end.
Third, trading must learn from actual combat.
What you get on the paper is very shallow, so pay attention. Some people like to read a lot of books and study a lot of theories, but they are just on paper. Once in actual combat, they are at a loss.
Just like learning to drive, no matter how many classes you take, how many books you read and how many driving theories you learn, if you don't sit behind the steering wheel and really control the car, you may never learn to drive, let alone face complicated traffic conditions. Only when you drive on the road will you know what it's like to drive and improve your driving skills.
At the beginning of the transaction, novices try their best to make transactions, but the number of each transaction is relatively small. Novices have more opportunities to make mistakes, and the fewer stocks they make, the less risk they have. But a lot of practice is necessary. Without a lot of actual combat, it is impossible to accumulate valuable practical experience and really learn this complex skill. People who stand on the shore and don't get into the water will never learn to swim. "This is also the truth.
Fourth, we should learn to control our mentality.
Be patient and disciplined. When a really good opportunity appears, take more decisive action instead of taking more rash action before considering it. Discipline is the most important principle for traders. You should know when to buy and when to sell, and how to control your risk in case of deviation. If you buy the right one, you should also pay attention to discipline. Don't be greedy for small profits and sell a good stock too early. This is an uncontrollable problem. However, with the continuous enrichment of actual combat experience, traders will constantly improve their discipline. In the final analysis, the easiest way to stock market is to minimize the loss when losing money and sell the losing stocks as soon as possible. When you make money, try to make the profitable stocks make more money for you, and don't sell the stocks that make money for you too early. This sounds simple, but it is difficult to do in practice.
According to my trading experience and observation for more than seven years, I found that almost 70% or 80% of novice traders failed because they didn't do it well. After buying the wrong stock, they blindly hope that this stock will rebound, and some people will continue to double their pursuit of this stock, so that his losses may become bigger and bigger. Although sometimes falling stocks will rebound, the probability is not great. If the stock keeps falling, your loss will be irreparable.
It's like driving a red light. In order to catch up with the time, you drove faster and ran a red light. Although it saved you time, or you ran a red light without being seen by the police, it didn't cause any car accident. However, you should know in your heart that if you run a red light many times, you will always be caught by the police, or cause a car accident, and sometimes even your life will be in danger. Buying stocks that have already lost money, or even chasing them twice, is equivalent to driving through a red light. Although it may not be dangerous every time, once it happens, it is also fatal. As we all know, if you always run red lights while driving, life-threatening and huge car accidents will always wait for you not far away.
In fact, the biggest difficulty that everyone faces, or the biggest enemy at present, is not the stock market, nor which stock to choose, but everyone's inner self-concept. Everyone has a self in his heart. When we read financial news, do analytical research or listen to other people's opinions, we will have certain prejudice when choosing stocks. But only the real-time dynamics of the stock market is the only basis for us to make decisions, and we can't let preconceived self-views influence our minds.
Experienced traders have this experience, that is, when trading, you must never let your self-concept decide everything. Everyone's inner self often makes us make unwise decisions. When a stock we buy is making money, our inner self will let us sell the profitable stock quickly. I'm afraid that the profits I can see in front of me will go up in smoke. However, when we lose money, our inner self is often unwilling to admit that we made a wrong decision and constantly look for various reasons not to sell stocks. At that time, the inner self would say that as long as I haven't sold the stock, I won't lose money and the stock will go up. In fact, this is just self-deception. At the end of the day, the price of any stock represents all its present value. If you haven't sold it, and the price you bought at the beginning is higher than the current price, then you have lost so much money. There is no law that stipulates that the price of a stock will rise after falling, and no one can guarantee this. And those who have a strong sense of self will never admit their mistakes. Even if the stock they buy falls sharply, they will hold on like straws. Because once the stock is sold at a loss, it is equivalent to admitting that you have made a mistake. In fact, this is a very bad idea. It is impossible for anyone to buy stocks 100% correctly, and there is always a loss for quite some time. The problem is that when you lose money, you should try to keep the amount of money lost to a minimum, and when you make money, you should earn as much as possible. The final result can make you a winner in the stock market. Collection and arrangement of the first portal of value investment
Fifth, when you start to learn trading, don't rush for success, start with small-scale trading.
One mistake that many people, including myself, easily make is that there are too many initial transactions when they are novices. In my first year as a stock trader, I made money for more than a month in a row, so I was a little complacent and felt that I should pursue my own victory to expand my trading volume and earn more money. I jumped from 300 shares to 500 shares to 2000 shares. It turned out that my decision was very childish and ridiculous, and soon my trading performance began to decline. Every trader, his trading level cannot be stable at a level forever. Sometimes it will be better, sometimes it will be almost worse, and I was in the initial stage, so I should know that my level will fluctuate greatly. But I suddenly increased the trading volume, added extra psychological burden to myself, and soon stumbled. After that setback, I learned to be a good person. I only added one or two hundred shares at a time, and it took several months to reach the level of 2000 shares at a time.
Sixth, we should conform to the general trend of the stock market and not move against it. If the stock market goes up, we buy, if it goes down, we sell.
This is actually a very simple truth, but many people like to predict when the stock market will peak and when it will fall to the bottom. In fact, this is very dangerous. If someone could always correctly predict when the stock market would improve, he would have made a fortune. In fact, no one has such power. For most traders, stock trading is a bit like sailing in a big river. Follow the current, it will be smoother, and you can break the waves without blowing off dust. But if you want to go upstream, you must do your best, or you will capsize if you don't do it well.
I remember once I asked a very senior trader for the secret of making stocks. He gave me a very simple speech, but it inspired me a lot. He said that it is not difficult to do a good job in stocks. You just need to observe quietly and don't always want to find a wonderful way to buy and sell. In fact, there is no way to predict the stock or stock market dynamics 100%. What we have to do is always observe the development of the stock market and follow the development of the stock market. When a wrong decision is made, the trading computer will show that we are losing money. At this time, we should quit in time and sell the losing stocks. But many people can't operate according to this principle. Few people can really overcome themselves and reject their subjective opinions, so few people can achieve great success in the stock market.
From my own trading experience for many years, it is really very difficult to completely control myself. Although I realized this problem many years ago, I actually found myself struggling with my inner self from time to time until today. It is very difficult to completely exclude the subjective opinions of the self. But as long as we can realize the seriousness of this problem, we have taken a big step in the right direction. Many people have experienced such a process in the pursuit of success, that is, they are looking for the secret of success everywhere from the beginning, hoping that someone can tell us a magic weapon to win. Finally, we will realize that the secret is not in others' hands, but in our own minds and hearts. And the biggest obstacle to our success is ourselves. The biggest enemy we need to overcome is ourselves. As long as we no longer expect to find the so-called golden key to success from others, then success will smile at us not far away.
Seventh, learn to control emotional fluctuations. Facing the unpredictable stock market, it is extremely important to keep a cool head and a stable mood.
In the fierce stock market fight, traders have to make a lot of transactions every day, with gains and losses, losses and wins. The so-called victory or defeat is a common occurrence for military strategists. However, it is very important and difficult for every trader to control his emotions and maintain a calm and stable mood and a cool head. Every trader, even a professional trader with deep qualifications, is still a mortal in the final analysis, and worldly desires, where there are mortals, have various emotions. When dealing with different situations, it is inevitable that there will be emotional fluctuations, which will affect his normal trading level. When I first started to learn to make stocks, I found that my emotions were easily disturbed by the results of each transaction. I am glad that I can't find the north when I make money, but I am extremely annoyed and depressed when I lose money, and sometimes I even get angry.
However, some traders are always very calm. On the surface, you can't see whether you are making money or losing money. As if nothing had happened. Even if they suffer a big loss, they can always restrain their emotions. I envy such psychological quality. I spent a lot of time in this respect, read many books on psychology, and learned how to adjust myself and face the stock market with a normal smile. I also asked my admired traders for their skills and experience in controlling their emotions. Gradually, I can calmly face the good and bad situation and deal with the ever-changing situation of the stock market. No matter what job you are engaged in, especially in industries with high competitive pressure, it is very important to reach a relatively high level of skills, control your mental state, and keep a cool head and a calm mind at all times. These are all psychological qualities that a master must possess.
After years of actual trading and constant psychological adjustment, I have summed up a set of methods to deal with the psychological state in various extreme situations.
When I did it well and felt a little high, I told myself that trading was just a game in line with probability theory. When it goes well, think about what to do when it doesn't. In addition, I will remind myself that no matter how well I live now, there are mountains beyond the mountains, and there are days behind. I don't know how many traders in the same industry are better than me. Not only are they more experienced than me, but their trading performance is far better than mine. There is nothing to be proud of. At the same time, I also told myself that if I am self-righteous, I will probably make mistakes I shouldn't have made, and I will regret it then.
When the transaction results are not satisfactory, people often doubt their ability and their self-confidence will be greatly reduced because of the blow. When I feel that I have these psychological conditions, I remind myself that just like making money is a part of the whole trading performance, losing money is also a common thing for military strategists and does not affect my overall trading skills, so there is no need to lose confidence in myself.
Then I like to compare trading with professional sports, such as playing basketball. The highest level basketball league in the world is the NBA in the United States, and the greatest player in the NBA is Michael Jordan, who is called the greatest star in the world. His position in the hearts of Americans is like God. But his shooting percentage is only 40%, which means that every time he throws a ball, there is a 60% chance that he will miss it. His success rate is lower than his failure rate, but this has not affected him to become the greatest basketball star in the world. In the NBA basketball game, a professional basketball player's shooting percentage is generally around 30 ~ 40%. Only great stars can shoot and score without hesitation at critical moments. So, just because he misses the shot doesn't mean he is not a good player. 100% shooting percentage actually does not exist. Sometimes I tell myself that I like basketball stars like Jordan and Kobe Bryant, and sometimes I don't score 10 in a row, not to mention that I will have bad times as a trader. I will feel calmer if I think so.
I once saw an advertisement in America, which was made by basketball superstar Jordan. In the advertisement, he briefly stated all kinds of failures in his basketball career, and listed hundreds of times that he missed the shot at the most critical moment before the end of the game, which led his team to lose the game completely. There are thousands of times he made mistakes that he shouldn't have made, which led to his team's unsatisfactory performance. However, the last sentence of the advertisement is: "These failures are the reason for his success. I think the educational significance of this advertisement is that we can't give up our efforts no matter what unpleasant situations and setbacks we encounter. Only by persisting, believing in yourself and redoubling your efforts when things are not going well can you become the one who laughs last.