What style of investor are you, and what type of investment strategy suits you best?
Investment philosophy (strategy): Style is a path determined by multiple factors such as an investor's investment experience, investment philosophy, financial qualifications, personality traits, and values combined. Style also means that investors can make money steadily - of course, it could also mean making steady losses. In the end, investors can only hand over the money to others to manage. Therefore, investors not only need to make money but also need to establish a stable style and solidify the 'rhythm' of making money.
There are three modes corresponding to short-term, medium-term, and long-term, each with a profitable mode or investment system. Actually, it doesn't matter what mode or how to profit in short, medium, or long term investments, the important thing is to have the matching awareness (including personal characteristics and abilities) and investment system. It is crucial not to mismatch these, short-term should not be turned into medium-term, medium-term should not hold onto long-term, long-term thinking should not compete with short-term, or you will end up getting slapped. Following your own strategy and executing it strictly is the key to succeed in the stock market.
(1) Short-term Trading - 3-7 trading days: Short-term trading is about respecting the market, following the trend, with no restrictions on the choice of symbols, focusing on buying high and selling higher, no profit requirements but strict prohibition on losses. If you have a grasp of 3 or more points that can win, you can enter the market. Short-term trading does not require a familiar understanding of the fundamental aspects of companies, but it does require a good market sense and strict discipline. The key point is to follow the trend, meaning as long as the trend remains the same, you can hold the position. In the past, during the technology stock bull market, it often lasted for several months after a rise. Even if you entered with a short-term mindset, never exit too early just because the profit exceeded expectations or the time extended beyond prediction. Therefore, daring to win and fearing to lose is the essence of short-term trading.
Short-term Opportunities: Generally driven by events, combined with emotional drivers. For example, sudden policy news, major restructuring acquisitions, market imbalance caused by sudden events, such as mask and glove stocks during a serious epidemic period. Events result in a short-term influx of funds in the market, usually dominated by hot money, leading to continuous rallies. Whether the event can bring a significant value increase to the company is not the most critical variable, but emotions and trends play a bigger role. Companies with good turnover of shares, suitable market capitalization are easier to rally. The most authentic ones may not necessarily perform the best, because it's all speculation, and the focus is not necessarily on authenticity.
(2) Medium-Term Trading - 7-15 trading days: Using a resonance method of fundamental stock selection + technical timing, starting from funds, based on logic, led by market sentiment, buy stocks with high probability and high odds, strictly setting stop-loss to achieve absolute returns. The medium-term approach requires a thorough understanding of a company's fundamentals, a good grasp of price valuation systems, and targets relatively stable businesses without significant fluctuations. Buy low during market undervaluation and sell high during overvaluation. The goal is to enter with an expected profit target of over 20% and set a stop loss at 8%. It requires being a discoverer of prices, daring to do what most people dare not, understanding the market but not entirely following it.
Medium-Term Opportunities: Generally, it involves changes in industry opportunities or turnaround of companies facing difficulties, with clear expectations of industry trends changing, making it suitable for swing trading. For example, the electric vehicle group last year, due to changes in foreign electric vehicle policy, Tesla actively expanded production and had development plans better than expected, leading to a trend market for the entire electric vehicle group. Generally, medium-term trends involve institutional participation because of their significant capital, and short-term trades can't handle the entry and exit of these large positions. Only industry or group trend opportunities can attract a large number of institutional funds, and their buying and selling activities also promote the formation of trend markets. 15 trading days are enough to achieve 20%-50% returns, while swing trading can generate even more profits.
(3) Long-Term Layout - 1-2 months: Long-term trading requires the highest level, needing a profound understanding of companies, clear grasp of companies' future development trends over the next few years, and an investment mindset to share the company's growth. The target should be carefully selected, with profit demands in multiples. In such opportunities, do not fear any losses or set any stop-loss indicators beyond the basic fundamentals because even over 50% losses are insignificant when dealing with stocks with huge potential.
Long-Term Opportunities: While it may be the most common strategy used by most trapped individuals, the key to long-term trading is not holding for a long time, but rather, viewing things from a longer perspective. Many tragic outcomes occur because the decision-making process happens without considering this longer perspective. Long-term trading encourages deep and long-term thinking, requires a massive amount of knowledge base, excellent analytical capabilities, broad social experiences, continuous tracking, and learning to keep assessing whether long-term value has changed in a dynamic and competitive world.
II. Short-term trading discipline
Short-term investors in the stock market are often in a rush, and are prone to mistakes. The risks of short-term trading do not come from the short-term nature itself, but mainly from operational errors, which require adherence to operational discipline. The stock market is a high-risk market, and one must have a good mentality, not to be clouded by a one-time profit, or to regret a failure or being trapped. As a short-term investor, one must adjust their mindset, not to expect too much, in other words, resist greed, control desires, and set appropriate stop-loss points.
For short-term trading, when a certain group is just starting, it is feasible to enter immediately and sell at a high open the following day for a profit of more than 5%. But if it seems unfavorable, it is essential to sell decisively the next day, even at a price below the purchase to avoid deeper entrapment. Because the funds of individual investors are limited, once they are trapped, even the cheapest stocks cannot recover. It must be understood that among all investors, only a few can sell at the highest price, and similarly, only a few can buy at the lowest price; most people can only follow the trend. Short-term trading requires good psychological qualities, so sell when necessary; otherwise, the loss outweighs the gain.
The current stock market has a differentiated trend, not all stocks are rising, nor are all stocks falling. Today the high-tech group is rising, tomorrow it might be the turn of the asset restructuring group, the day after tomorrow, it may be the high-quality group... it's always changing, as long as the method is correct, the short-term opportunity can be seized. If the opportunity is recognized, one should act decisively, never procrastinate and miss the chance.
III. Short-term stock selection techniques
Short-term investment itself has extraordinary charm, and short-term opportunities are endless, but the key is to master the technique of stock selection. If investors can grasp the short-term stock selection techniques when the large cap stabilizes, they can navigate future market developments with ease. The specific principles are as follows:
(1) When the large cap is still in a continued downtrend, investors should actively select stocks, laying the foundation for participating in speculation when the large cap stabilizes. Focus on selecting stocks that have previously experienced a significant decline in stock prices and yet can lead the large cap in stabilizing the downtrend, observe them closely.
(2) When the large cap stabilizes, scrutinize the pre-selected stocks that have successfully built a small-scale bottom pattern in form. The stabilization period of individual stocks should be significantly longer than the large cap, and after a successful bottoming, the stock's trend should exhibit a certain degree of independence.
(3) Further select the stocks with bottom volume that can be moderately enlarged after the multiple selection.
(4) Confirm. When the market has confirmed the bottoming out and shows signs of turning stronger, for the stocks that have undergone multiple strict screenings, if there is a stock that can experience a strong volume rally, it can be confirmed as a short-term buying signal and should be followed up promptly.
It is divided into the following four methods:
① Selecting stocks based on sudden market conditions
In recent years, the stock market has experienced sudden market conditions several times a year. In the face of this kind of eruptive market condition, seizing opportunity means seizing money. When the overall trend is rising, there are always certain groups or individual stocks that are leading the trend, such as some trapped hot money stocks, groups that have not fully played their roles in certain themes, stocks with concentrated chips in institutional investors, and listed companies that make use of certain topics. These stocks or groups have a greater ability to expand. By selecting such stocks accurately, you can stay ahead of the overall trend.
② Selecting stocks by chasing the last-minute market
The stock market is never lonely. When the market is booming, it often makes a last-minute effort, with increasing volume and rising prices. All stocks turn bullish. In the face of such opportunities, as long as you have the courage to enter, sell when they reach new highs the next day, and generally you will reap some rewards.
③ Selecting stocks from the new stock groups
Before the IPO, brokerages generally push up stocks of the same group in order to ensure a smooth IPO. Every time before a new stock is listed, the associated group will become a market hot spot. Investors should decisively buy stocks of the associated group before the new stock is listed and sell them before the new stock is listed. If the new stock can open high and continue to rise, the related stocks may also rise, but this situation is very rare.
When selecting stocks with the comparative method, since it is a short-term investment, you need stocks that can have an explosive profit in the short term. Therefore, it must not be a stock that has experienced a deep decline and rebound, because a deep decline belongs to a downward trend and you do not know where the decline will stop. Rebounds often do not have enough momentum to continue, so the probability of success is low. Therefore, you should choose stocks with an upward trend that are stronger than the market and the industry. Then buy them at a reasonable position after a pullback.
Position management:
You need to understand position management. Only when you have some reserved assets can you avoid panic. Therefore, never blindly go all-in.
For short-term stocks (buy signals based on technical analysis, small-scale trading), the position allocation is at 2-3 levels.
For medium-term stocks (reversal in fundamental analysis + buy signals based on technical analysis), the position allocation is usually at 5-6 levels.
For long-term stocks (asset restructuring or industry-trend opportunities with high certainty), the position allocation is at 8-10 levels, or even leveraged funds.
In the rotation pattern, my current strategy is to allocate 3 levels of positions for each short-term stock. If the theme does not have effective and sustained speculation, and if there is a retracement adjustment and stabilization afterward, there should be enough positions to buy at a lower price, and then sell at high points during the trading day, which is a pattern for intraday arbitrage: harvesting intraday profits and diluting holding costs, reducing the risk of holding stocks.
The above is the operating mode, position management, risk control awareness, and mentality in the rotation pattern. I hope it can help fellow stockholders. I also hope everyone can clearly understand what stage they are at and what they should do, and get out of the current predicament as soon as possible.
There are three modes corresponding to short-term, medium-term, and long-term, each with a profitable mode or investment system. Actually, it doesn't matter what mode or how to profit in short, medium, or long term investments, the important thing is to have the matching awareness (including personal characteristics and abilities) and investment system. It is crucial not to mismatch these, short-term should not be turned into medium-term, medium-term should not hold onto long-term, long-term thinking should not compete with short-term, or you will end up getting slapped. Following your own strategy and executing it strictly is the key to succeed in the stock market.
(1) Short-term Trading - 3-7 trading days: Short-term trading is about respecting the market, following the trend, with no restrictions on the choice of symbols, focusing on buying high and selling higher, no profit requirements but strict prohibition on losses. If you have a grasp of 3 or more points that can win, you can enter the market. Short-term trading does not require a familiar understanding of the fundamental aspects of companies, but it does require a good market sense and strict discipline. The key point is to follow the trend, meaning as long as the trend remains the same, you can hold the position. In the past, during the technology stock bull market, it often lasted for several months after a rise. Even if you entered with a short-term mindset, never exit too early just because the profit exceeded expectations or the time extended beyond prediction. Therefore, daring to win and fearing to lose is the essence of short-term trading.
Short-term Opportunities: Generally driven by events, combined with emotional drivers. For example, sudden policy news, major restructuring acquisitions, market imbalance caused by sudden events, such as mask and glove stocks during a serious epidemic period. Events result in a short-term influx of funds in the market, usually dominated by hot money, leading to continuous rallies. Whether the event can bring a significant value increase to the company is not the most critical variable, but emotions and trends play a bigger role. Companies with good turnover of shares, suitable market capitalization are easier to rally. The most authentic ones may not necessarily perform the best, because it's all speculation, and the focus is not necessarily on authenticity.
(2) Medium-Term Trading - 7-15 trading days: Using a resonance method of fundamental stock selection + technical timing, starting from funds, based on logic, led by market sentiment, buy stocks with high probability and high odds, strictly setting stop-loss to achieve absolute returns. The medium-term approach requires a thorough understanding of a company's fundamentals, a good grasp of price valuation systems, and targets relatively stable businesses without significant fluctuations. Buy low during market undervaluation and sell high during overvaluation. The goal is to enter with an expected profit target of over 20% and set a stop loss at 8%. It requires being a discoverer of prices, daring to do what most people dare not, understanding the market but not entirely following it.
Medium-Term Opportunities: Generally, it involves changes in industry opportunities or turnaround of companies facing difficulties, with clear expectations of industry trends changing, making it suitable for swing trading. For example, the electric vehicle group last year, due to changes in foreign electric vehicle policy, Tesla actively expanded production and had development plans better than expected, leading to a trend market for the entire electric vehicle group. Generally, medium-term trends involve institutional participation because of their significant capital, and short-term trades can't handle the entry and exit of these large positions. Only industry or group trend opportunities can attract a large number of institutional funds, and their buying and selling activities also promote the formation of trend markets. 15 trading days are enough to achieve 20%-50% returns, while swing trading can generate even more profits.
(3) Long-Term Layout - 1-2 months: Long-term trading requires the highest level, needing a profound understanding of companies, clear grasp of companies' future development trends over the next few years, and an investment mindset to share the company's growth. The target should be carefully selected, with profit demands in multiples. In such opportunities, do not fear any losses or set any stop-loss indicators beyond the basic fundamentals because even over 50% losses are insignificant when dealing with stocks with huge potential.
Long-Term Opportunities: While it may be the most common strategy used by most trapped individuals, the key to long-term trading is not holding for a long time, but rather, viewing things from a longer perspective. Many tragic outcomes occur because the decision-making process happens without considering this longer perspective. Long-term trading encourages deep and long-term thinking, requires a massive amount of knowledge base, excellent analytical capabilities, broad social experiences, continuous tracking, and learning to keep assessing whether long-term value has changed in a dynamic and competitive world.
II. Short-term trading discipline
Short-term investors in the stock market are often in a rush, and are prone to mistakes. The risks of short-term trading do not come from the short-term nature itself, but mainly from operational errors, which require adherence to operational discipline. The stock market is a high-risk market, and one must have a good mentality, not to be clouded by a one-time profit, or to regret a failure or being trapped. As a short-term investor, one must adjust their mindset, not to expect too much, in other words, resist greed, control desires, and set appropriate stop-loss points.
For short-term trading, when a certain group is just starting, it is feasible to enter immediately and sell at a high open the following day for a profit of more than 5%. But if it seems unfavorable, it is essential to sell decisively the next day, even at a price below the purchase to avoid deeper entrapment. Because the funds of individual investors are limited, once they are trapped, even the cheapest stocks cannot recover. It must be understood that among all investors, only a few can sell at the highest price, and similarly, only a few can buy at the lowest price; most people can only follow the trend. Short-term trading requires good psychological qualities, so sell when necessary; otherwise, the loss outweighs the gain.
The current stock market has a differentiated trend, not all stocks are rising, nor are all stocks falling. Today the high-tech group is rising, tomorrow it might be the turn of the asset restructuring group, the day after tomorrow, it may be the high-quality group... it's always changing, as long as the method is correct, the short-term opportunity can be seized. If the opportunity is recognized, one should act decisively, never procrastinate and miss the chance.
III. Short-term stock selection techniques
Short-term investment itself has extraordinary charm, and short-term opportunities are endless, but the key is to master the technique of stock selection. If investors can grasp the short-term stock selection techniques when the large cap stabilizes, they can navigate future market developments with ease. The specific principles are as follows:
(1) When the large cap is still in a continued downtrend, investors should actively select stocks, laying the foundation for participating in speculation when the large cap stabilizes. Focus on selecting stocks that have previously experienced a significant decline in stock prices and yet can lead the large cap in stabilizing the downtrend, observe them closely.
(2) When the large cap stabilizes, scrutinize the pre-selected stocks that have successfully built a small-scale bottom pattern in form. The stabilization period of individual stocks should be significantly longer than the large cap, and after a successful bottoming, the stock's trend should exhibit a certain degree of independence.
(3) Further select the stocks with bottom volume that can be moderately enlarged after the multiple selection.
(4) Confirm. When the market has confirmed the bottoming out and shows signs of turning stronger, for the stocks that have undergone multiple strict screenings, if there is a stock that can experience a strong volume rally, it can be confirmed as a short-term buying signal and should be followed up promptly.
It is divided into the following four methods:
① Selecting stocks based on sudden market conditions
In recent years, the stock market has experienced sudden market conditions several times a year. In the face of this kind of eruptive market condition, seizing opportunity means seizing money. When the overall trend is rising, there are always certain groups or individual stocks that are leading the trend, such as some trapped hot money stocks, groups that have not fully played their roles in certain themes, stocks with concentrated chips in institutional investors, and listed companies that make use of certain topics. These stocks or groups have a greater ability to expand. By selecting such stocks accurately, you can stay ahead of the overall trend.
② Selecting stocks by chasing the last-minute market
The stock market is never lonely. When the market is booming, it often makes a last-minute effort, with increasing volume and rising prices. All stocks turn bullish. In the face of such opportunities, as long as you have the courage to enter, sell when they reach new highs the next day, and generally you will reap some rewards.
③ Selecting stocks from the new stock groups
Before the IPO, brokerages generally push up stocks of the same group in order to ensure a smooth IPO. Every time before a new stock is listed, the associated group will become a market hot spot. Investors should decisively buy stocks of the associated group before the new stock is listed and sell them before the new stock is listed. If the new stock can open high and continue to rise, the related stocks may also rise, but this situation is very rare.
When selecting stocks with the comparative method, since it is a short-term investment, you need stocks that can have an explosive profit in the short term. Therefore, it must not be a stock that has experienced a deep decline and rebound, because a deep decline belongs to a downward trend and you do not know where the decline will stop. Rebounds often do not have enough momentum to continue, so the probability of success is low. Therefore, you should choose stocks with an upward trend that are stronger than the market and the industry. Then buy them at a reasonable position after a pullback.
Position management:
You need to understand position management. Only when you have some reserved assets can you avoid panic. Therefore, never blindly go all-in.
For short-term stocks (buy signals based on technical analysis, small-scale trading), the position allocation is at 2-3 levels.
For medium-term stocks (reversal in fundamental analysis + buy signals based on technical analysis), the position allocation is usually at 5-6 levels.
For long-term stocks (asset restructuring or industry-trend opportunities with high certainty), the position allocation is at 8-10 levels, or even leveraged funds.
In the rotation pattern, my current strategy is to allocate 3 levels of positions for each short-term stock. If the theme does not have effective and sustained speculation, and if there is a retracement adjustment and stabilization afterward, there should be enough positions to buy at a lower price, and then sell at high points during the trading day, which is a pattern for intraday arbitrage: harvesting intraday profits and diluting holding costs, reducing the risk of holding stocks.
The above is the operating mode, position management, risk control awareness, and mentality in the rotation pattern. I hope it can help fellow stockholders. I also hope everyone can clearly understand what stage they are at and what they should do, and get out of the current predicament as soon as possible.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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