Eleven rules for stock market masters

Stocks are the main long-term credit instruments in the capital market. They can be transferred and bought and sold. Shareholders can share the company's profits with them, but they also have to bear the responsibility. Risks arising from company operational errors. The editor has compiled the rules of stock market experts for your reference. I hope you will gain something from the reading process!

You really want to trade

This is the first principle. One-vote veto power, if you don't "love" this industry, please go away. I guess this is not just Murphy's point of view. All super traders love trading crazily. There are very few successful people in all industries who don't love their profession. Success is no accident.

I, WHY and HOW

I - I do want to trade, WHY - why do I want to trade? HOW - how do I plan to trade? These are three questions instead One, must have thought clearly. Again, why do you want to trade? If you can't answer, please go away. - No prompts.

You are you

Okay, the above two questions did not let you go away. Congratulations, now I will tell you how to trade. How to trade? Build trades that fit your personality. This is not just Murphy's point of view, Van Kepp also particularly emphasizes that the trading strategy must be consistent with the trader's personality. Of all the factors in trading, you, number one. Article 4 You are still you. Even if you have a perfect trading system and money management strategy that completely suits your personality, in fact this is impossible, you still have to exercise restraint, you are still you.

The sea has its shores and the sky has its ends

Determine a method and use it, no matter what. You must know something about basic analysis, technical analysis, value theory, value-added theory, charts, indicators, mechanical systems, intelligent systems, waves, Gann, and Gann. It is important to know this, because it teaches principles, and more importantly, determines its boundaries. You should know under what circumstances it can be used and when it cannot be used.

Talent and sweat

Now, assuming you "love" trading, you have good trading motivation, a systematic trading strategy and fund management that fit your personality, and you also I know moderation and have mastered a complete analysis technique, congratulations. However, I regret to tell you that only a very small number of people can become super traders, and others can only rely on sweat to become net profitable traders. Becoming a super trader requires talent. Edison said 1% talent + 99% sweat = something. He seemed very polite. Let us calculate how much this 1% talent equals. Buffett is the undisputed king of stocks today. Since 1965, his annual compound interest has only been around 26% (the starting and ending times vary). This is nothing in the Chinese stock market. What matters is that he can make it year after year. . Cody Ashgod, the most outstanding mechanical trading master since the widespread use of computing technology in the 1970s, has increased his wealth 1,000 times in 18 years, with an average annual compound interest of 46%. His achievements are nothing when it comes to the Chinese stock market. How many times did Shi Kai's capital double in 1999? But how many more years did Shi Kai become famous? So accidental success is opportunity or luck, and long-term success is genius. Now, do you think you are a genius? Is your pursuit higher than genius?

Those who are good at fighting have no reputation for wisdom and no bravery.

Sun Tzu said: "Those who are good at fighting have no wisdom. Fame means no bravery." Among the thirteen chapters of "The Art of War" by Sun Tzu, no sentence is more essential than this. The less effortless and natural the trading process is, the greater the chance of success. Murphy said: "The perfect deal is the one that requires no effort." Profound. I can't understand it either, I can only feel it.

Management, management, management

What to manage? Funds! No matter what you trade for, profit is indispensable. Funds are the beginning and end of a transaction. There are some experiences we can learn from,

(1) The risk in any transaction should not exceed 1%~2% of your funds, and it is strongly discouraged to exceed 5%. Murphy is talking about futures. As for the stock market, it can be appropriately relaxed, but from my point of view, it is still strongly opposed to exceeding 10%. I usually use a 5% stop loss and spread the risk through the combination.

(2) Decide on the exit point before trading.

(3) Set a quantity (10%~20%) in advance. If the loss exceeds this quantity, exit the market and analyze the reasons, or drastically reduce the scale of the operation.

(4) Entry and exit in stages.

(5) Correctness is more important than genius. Geniuses can buy low and sell high, buy the bottom and sell the top, but I am not one, I only want to win.

Rules, rules, laws

There is no rule without rules. Foreigners also understand this truth, and they pay more attention to the spirit of the law. What is "law"? According to classic Western political science, law is a contract reached between the people and the government, and the U.S. Constitution is a typical case. Unfortunately, quite a few Chinese people don’t like these things. Traditionally, we value habits, emotions, face, blind obedience, and feelings, but not contracts. Rules, rules, laws, there is no need to repeat their meaning and significance. Murphy says you can never avoid bad trading habits—the best you can do is let them lie dormant.

I say the best effort is not to form these bad habits in the first place. The worst of all bad habits is disrespecting the rules.

Independent spirit

Do you have an independent spirit? It is best to have one. Mr. Market by Professor Benjamin Grean (Buffett’s master’s tutor) clearly illustrates the value of independent spirit. The following points are worthy of reference:

(1) Dare to take action. Dare to act but dare not take responsibility cannot be called independence.

(2) Dare to act. If you have an idea, can you implement it in the first time? Today is the most important.

(3) Dare to give up. Giving up is also a virtue.

(4) Face reality. No matter what it is, face it head-on, look directly at it, and then analyze the specific problems in detail.

(5) Self-criticism. Self-examination is easy. You and I have both written that there must be no excuse for self-criticism.

(6) Dare to win. Expand your profits, sail with the wind, and win to the end.

(7) Dare to fail. Failure is failure, failure is part of it.

(8) Refuse to be comfortable. Human nature tends to be comfortable. If you want to succeed, don't do "comfortable" things.

(9) Reject hope and reject necessity. The stock market has "what is" and "what may be", but there is no "what it hopes to be" and "what it must be". Hope will take away the opportunity. You must win and you can only lose.

(10) The most terrifying thing is to dare to break through, but to be complacent. Gilblake is a fund manager who has been incredibly profitable over the long term. In fact, he got into trading by accident. Once he tried to explain to his friend that stock prices were arbitrary, and when he realized he was wrong he became a trader.

The above ten points can actually be divided into two categories: dare to take responsibility, dare to act, face reality, dare to win, and refuse to be comfortable, which is the active side; dare to give up, dare to fail, refuse hopes and needs, and self-criticism , Dare to break through is the other side.

Life

Trading is not everything in life, life is so beautiful. It is enough to have the above ten rules for market masters. It is meaningful for Murphy to take "Trading is long-term and Yi takes a broad view, life is more than just trading" as the last rule of the last chapter, just like the last hexagram of the ancient "Yi" is "Weiji". Life, it can tell you why you "really want to trade" or "really don't want to trade".

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