Mooer's Stories | Catch the trend and discipline yourself
We're honored to invite @满山猴我腚最红, the runner-up of AU Papertrading Competition (Season 3), to share his investment story！👏👏
Let's dive in!
When did you start investing? Who or what initially sparked your interest in the stock market and investing?
I officially started investing in 2007 during the Chinese A-share market boom that
$SSE Composite Index (000001.SH)$ reached 6,000.
Initially, it was watching my father invest in the stock exchange. My elementary school was nearby, and I often visited him during lunch breaks for meals. In the 90s, computers weren't widespread. Seeing a room full of people with computers, smoking with one hand and typing with the other, discussing the market, I thought they were cool and impressive. My interest in stocks probably started around that time.
How would you describe your investment style? What type of investor are you?
I consider my investment style to be relatively conservative. I'm adept at identifying stocks that the market has overly underestimated. When opportunities arise, I decisively buy a significant amount and hold. I'm not someone who enjoys frequent trading. I persist in holding onto strong stocks.
In terms of stock selection, I usually look at the scarcity and liquidity of individual stocks. I believe that scarcity increases the chances of a stock being selected by institutions during sector rotation and thematic speculation.
Liquidity, such as strong cash flow, gives it the ability to undertake new businesses to improve performance. I would also combined those with the right timing, position, and people for the enterprise. I really like companies that change their management staff, which usually represents a positive signal.
Additionally, when buying, don't go all in at once; manage your position and buy in batches, without the pursuit of buying at the lowest point. Stock-trading is not an exact science; grasping the trend is already quite an achievement.
How do you operate during market fluctuations or downturns, bear markets? Do you have a specific risk management strategy?
In volatile markets, I practice stricter position management. If it's confirmed to be a bear market, I'll leave to do something else.
There are many risk management strategies, but I believe the most important is discipline and trend judgment. Almost all risk management strategies are good, but discipline is the hardest to adhere to.
In terms of trading discipline, I think everyone has their own standards. My trading discipline is generally focused on profit-taking, stop-losses, and position sizing.
For instance, if I see a stock that is currently volatile and I decide to trade on a daily basis after analysis, my discipline would be to take profits at 5%, set a stop-loss at 3%, limit my position to 10%, and sell before the market closes; if I decide to trade on a monthly basis, my profit target would be between 30%-50%, with a stop-loss at 15%-25%, and my position would be at 30%.
If there's a stock that I'm particularly bullish on and decide to take a risk, I won't set profit-taking or stop-loss targets or holding duration, but I will set a very strict position line at 80%-90%. If the stock rises during this period and the position exceeds 80%-90%, I should find a time to rebalance it.
When it comes to stock trading, always keep a reserve, never go all-in. No one can fully predict the market. Going all-in means saying goodbye to other opportunities and having zero risk resistance. My worst investments were all due to not strictly enforcing the discipline of stop-losses and position sizing.
Can you share one of your most memorable trades? Whether this is memorable in terms of strategy execution or profit return.
My most memorable trade was holding a large position in $Myer Holdings Ltd (MYR.AU)$ at a cost of 0.5 before the pandemic, which dropped to 0.06 when the pandemic hit. It was the stock with the most paper-loss on my account. I used the remaining 20% position to buy in at 0.1, and after half a year, I made up for the loss and left with a small profit.
The rollercoaster from heaven to hell and back, and the experience of turning the tide in the middle, are all deeply memorable. My understanding of risk and recognition of trends also reached a new level after that.
Can you describe the main strategy you used in the competition?
In the competition, it's similar to reality, but in reality, I'm more cautious. Before buying a stock, I observe and confirm its trend through various methods and a lot of analysis. Technical indicators, volume and price analysis, fundamentals, industry prospects, and management background are all used in my trading. Technical indicators are important but not that important. I think everyone will have their own understanding and data models. Then it's about holding firmly, observing carefully, and staying alert.
It seems you focused mainly on $Appen Ltd (APX.AU)$. How did you select stocks and determine entry timing in the competition?
I think $Appen Ltd (APX.AU)$ is a stock that is seriously underestimated, and it's clear that it's on an upward trend. But it's still necessary to continue observing and paying attention to risks.
The last few days of the competition were very tumultuous, with everyone taking turns to be in the lead, which surprised me with the intensity of the simulation competition and the level of the participants.
How did your previous trading experience (if any) help in this competition? How was it applied?
My previous trading experience was helpful in this competition. I've been more calm in terms of mentality. Simulated money is still different from real money, and the pressure is much less. I think participating in this kind of competition is a good exercise.
Are there any specific indicators or tools that you frequently used in this competition? How good are these features in moomoo?
I refer to all the indicators provided by Moomoo. Indicators like MACD are useful but have their limitations, and I usually don't use them directly to determine the buying point. Moomoo is indeed the best application I've used so far, with its indicator tools, beautiful interface, and community interaction all meeting my needs.
What important experiences or insights did you gain from this competition, and what benefits do you think these experiences or insights can bring to other traders?
The experience from this competition is that when you catch a strong stock and are in a bull market, you should be brave and daring. But I also want to say that as long as you are still in this market, it's too early to judge who is a winner and who is a loser. If you extend the competition time and make stock investment a part of your life, then mental strength is the real strength.
I wish you all winners, and let's encourage each other.
We truly appreciate@满山猴我腚最红 for sharing his valuable and inspiring experience with us! Feel free to interact with him if you have anything to say!
Disclaimer: This presentation is for information and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Before investing, please consult a licensed professional. See this link for more information.
