The investment market is not a legitimate casino, and we must reject gambling behavior. Gambling is of no benefit to you or the market. It not only loses money but also disrupts market stability, which is a self-defeating act.
Investment can only rely on oneself. Whether the funds are safe and whether there will be profits in the future, only oneself can be responsible. Therefore, learning more and complaining less is beneficial to both you and the market.
The stock market has its own patterns and trends. As long as you follow the rules of the stock market, you can generate income and profits, and enjoy it.
It takes years to understand the pulse of the market, accumulate trading techniques, concepts, capital management, and a large amount of practical experience.
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For your own trading principles, you need to guard them as if they were your own life. To gain, you must let go. Give up all the markets that you don't understand and can't afford to mess with, and endure alone, guarding the major trend principles that you can clearly understand and execute. The art of trading itself is incomplete, and perfectionists are destined to suffer. Trading is incomplete. The philosophy of "great success seems to be incomplete" is the best way to describe trading. Therefore, trading itself is a game for losers. Train your will in failure, gain greater profits after stopping losses, and continuously exchange small losses for greater profits. This is the essence of trading.
Making money in the stock market does not rely on frequent operations and striving to earn short-term differences. On the contrary, it should be to keep oneself calm and choose stocks carefully. Frequent operations have many drawbacks, such as being too tired, having a long time, poor physical condition, mental fatigue, and being prone to impulsive mistakes. There are so many stocks, and their quality varies greatly. If you are not careful, you may step on a mine. Moreover, the ability to make money in the stock market is not the whole of our life. Life is beautiful, and we should not lose the taste of learning and living just because of the Chinese stock market.
The real masters in the stock market have the following conditions:
(1) The real master is a person with ideals and goals.
There are two kinds of people in the stock market: one is people with strict plans and goals. Over time, these people can become masters because they have life goals, are not arrogant in victory, and are not discouraged in defeat, until they successfully achieve their goals.One type of person is those who harbor a fluke mentality in the hope of making a fortune. Such individuals inevitably end up facing failure. They make profits and suffer losses intermittently, without understanding the reasons behind either. It is akin to gambling. There is no principle that guarantees they won't lose.
(II) Technical experts are not the true masters
Technical analysis and fundamental analysis are both forms of analysis. Since they are analyses, there is a possibility of making mistakes. There has not yet appeared an omnipotent analytical indicator in the market, nor an omnipotent analyst, nor an omnipotent theory. This is true now and will remain so a thousand years from now.
(III) The standard for measuring a master is practice
Do not assume that those analysts, and those who recommend stocks that rise immediately after their recommendation, are masters. Often, those who dare to recommend are the ones who dare not to buy, which is the psychological factor of armchair strategizing at work. Stock trading is not something that can be resolved by just technical analysis and fundamental analysis; more importantly, it is a matter of psychological analysis. If one's psychology collapses, are technical analysis and fundamental analysis still useful?
The world of trading is fascinating, and many things are indescribable to those who have not experienced it. The process of stock trading is also a tempering of the mind. If one day, your inner self is strong enough, then you will become a god-like figure.
The market is an objective existence and does not change according to human subjective consciousness. Do not impose personal emotions on the market. Interpret the market objectively. Respect objective facts and trade based on what you see, not what you think.
If one cannot view the market objectively, it is easy to lose order and discipline when the market is inconsistent with one's judgment. Only after experiencing (preferably at least two) complete bull and bear markets will one begin to have a correct understanding of the market.
Heaviness is the root of lightness, and stillness is the master of restlessness. Therefore, the sage travels all day without leaving his heavy load. Although there are splendid views, he remains detached. How can a ruler with a vast territory treat the world lightly? Being light loses the root, and being restless loses the master. In the stock market, prudence is fundamental because weight is the root of lightness; calmness is crucial because it is the determinant of restlessness.
Because wise investors do not forget to make prudent decisions every day when buying and selling, although their operations may be magnificent, they can remain calm due to their careful decision-making. If you want to achieve something in the stock market, why should you trade recklessly? Recklessness loses the foundation of standing in the stock market, and restlessness loses one's true nature.Remember! There is no perpetual bull market, nor is there an eternal bear market in any market. Understanding the importance of avoiding the sharp edge during a bear market is more important than knowing how to make a big move during a bull market. Knowing how to avoid and control risks indicates that you are gradually on the right path of investment. An investor who only sees opportunities and forgets risks is trading on luck, not on a true investment philosophy. Consistent earnings are more important than big earnings, as they not only make your capital snowball grow larger, but also help you maintain a good mindset.
When trading stocks, you must know the "buy on long lower shadow, sell on long upper shadow" strategy, which has been a great help to me, and the key to truly understanding it is that one key!
In the battle between bulls and bears, sometimes there is a gap in strength between the two sides, but the disparity in strength does not always lead to one side having the final say. It is often the case that although one side has the upper hand, the other side still has the strength to fight back. Reflected on the chart, it means that there is resistance above the stock price and support below, with both sides launching a tug-of-war, thus forming a K-line on the K-line chart that has a head (upper shadow) above and feet (lower shadow) below, except for the entity. This is the shadow-type K-line. A long shadow-type K-line refers to a K-line pattern where the length of the upper shadow (or lower shadow) is far greater than the length of the K-line entity.
Long lower shadow application rules:
In the K-line chart, the thin line that extends downward from the entity is called the lower shadow. In a positive line, it is the difference between the opening price and the lowest price of the day; in a negative line, it is the difference between the closing price and the lowest price of the day. Generally speaking, the reason for the emergence of the lower shadow is that the strength of the bulls is greater than that of the bears. After the stock opens, the stock price falls due to the suppression of the bears, but due to the strong buying, the stock price recovers and closes above the low point, thus forming the lower shadow. The K-line pattern with a lower shadow can be divided into a positive line with a lower shadow, a negative line with a lower shadow, and a doji star. To more accurately judge the strength of both sides, different forms need to be judged.
When the size of the K-line entity is the same, the longer the lower shadow, the stronger the support below; the shorter the upper shadow, the smaller the resistance above. Long lower shadows mostly show the characteristics of a phased bottom.
There are several application rules for long lower shadows:
(1) A long lower shadow appears at a high position in an upward trend. If the trading volume increases, it means that the selling pressure is increasing, and the acceptance is active, but there is a feeling of exhaustion of the bulls.
(2) A long lower shadow appears at a low position in a downward trend. If the trading volume increases, it means that there is a panic selling of chips, but the acceptance at the low position is active, and a large number of bullish bottom-fishing plates are involved.If the candlestick is a bullish one with a long lower shadow, it indicates that the bulls' attack in the battle between the bulls and bears is steady and powerful, with the stock price falling first and then rising, suggesting that the market has the potential for further increases.
Application Rules for Long Upper Shadow Lines
In the candlestick chart, the thin line that extends upward from the body is called the upper shadow line. In a bullish candlestick, it represents the difference between the highest price of the day and the closing price; in a bearish candlestick, it represents the difference between the highest price of the day and the opening price. Therefore, the candlestick patterns with upper shadow lines can be divided into bullish candlesticks with upper shadows, bearish candlesticks with upper shadows, and doji stars. For different patterns, the judgment of the strength of the bulls and bears is different.
Generally speaking, the reason for the formation of the upper shadow line is that the bearish force is greater than the bullish force. After the stock opens, the bulls are unable to attack effectively and are suppressed by the bears, causing the stock price to fall from the high point and form an upper shadow line. When the size of the candlestick body is the same, the longer the upper shadow line, the greater the pressure the stock price encounters at the higher level; the shorter the lower shadow line, the weaker the support at the lower level. Long upper shadow lines mostly exhibit characteristics of a phased peak.
There are several application rules for long upper shadow lines:
(1) A long upper shadow line appears at a high position in an upward trend. If the trading volume increases, it means that the bulls are actively chasing high prices, but the selling pressure at high levels is heavy, making it difficult for the stock price to rise, and the market is likely to turn back or reverse.
(2) A long upper shadow line appears at a low position in a downward trend. If the trading volume increases, it means that the bulls are entering the market to bottom-fish, but they cannot effectively curb the selling pressure, and the bulls and bears are gradually becoming evenly matched.
(3) If it is a bullish candlestick with a long upper shadow line, it indicates that the selling pressure above is heavy when the bulls attack. This pattern is often seen in the main force's test of the market, indicating that there are more floating chips at this time, and the uptrend is not strong. Long upper shadow lines often appear at phased tops.
Battle Tactics with Upper and Lower Shadow Lines:The "upper and lower shadow line strategy" refers to a situation where the stock price first closes with a small positive line that has a long upper shadow line on one day, and then on the following day, it closes with a lower shadow line after stabilizing, forming a reference for buying.
Technical Points:
1. The trading volume on the day the upper shadow line is formed should be significantly larger than the previous trading day, but it should not be too high;
2. The next morning, after the stock price falls and stabilizes, the trading volume should be significantly increased, forming a lower shadow line;
3. The lengths of the upper and lower shadow lines should not be too long or too short, ideally between 2% and 5%.
The long upper shadow followed by a long lower shadow line is divided into four categories. The application of these four methods can be judged and the direction of the future market can be determined through trading volume.
1. Long upper shadow followed by a long lower shadow line:
A. If the volume of the latter long lower shadow line is reduced compared to the previous volume, the next day is expected to rise;
B. If the volume of the latter long lower shadow line is increased compared to the previous volume, the next day is expected to adjust;C. If the two quantities are basically equal, then it is bullish.
2. First, a long upper shadow line followed by a long lower shadow line:
A. If the volume of the latter long lower shadow line is relatively reduced compared to the previous volume, then the next day is expected to be adjusted;
B. If the volume of the latter long lower shadow line is increased compared to the previous volume, then the next day is bullish;
C. If the two volumes are basically equal, then it is bullish.
3. First, a long upper shadow line followed by a long lower shadow line:
C. If the two volumes are basically equal, it is a standard bullish signal;4. Long upper shadow followed by a long lower shadow:
C. The two volumes are basically equal, forming a standard volume relationship with upper and lower shadows, indicating a bullish outlook.
Long upper shadow followed by a long lower shadow: The initial attack is met with resistance and falls back to form a long upper shadow, and the fall is supported to form a long lower shadow. After consolidation, it will continue to rise. Generally, it will rise on the third day.
How to avoid being a "mug" in the stock market, here are some suggestions:
1. If you find that a stock in a downtrend suddenly has more than three consecutive days of gains, it indicates that the trend in the future may be reversed. Similarly, when a stock is in an uptrend, if it suddenly has more than three consecutive days of losses, it indicates that the uptrend has been broken, and the market may reverse and fall in the future, and it should be left as soon as possible!
2. When the stock market is volatile, if a sudden increase in volume and stable price occurs, a significant breakthrough will occur later, and it is recommended to intervene in advance and build a position to participate. After the breakthrough with increased volume, when a slight pullback occurs, and a candlestick with double the volume appears again, the market for a significant rise has arrived.
3. The core reason why a strong stock is called strong is that the stock's daily line has always been above various moving averages. Therefore, if you want to hold a strong stock, you should rely on this simple method instead of considering those complex and dull technical indicators.
4. When the stock you hold has made a profit of more than 10%, you need to set a stop-loss to break even. Generally speaking, when the stock you hold has made a profit of 10%, it indicates that the direction of the operation or the entry point is correct. If the subsequent price pullback is within 10%, the market is normal. If the pullback exceeds 10%, it indicates that it is still in a volatile market.5. When getting involved in a stock, exercise caution and it is recommended to enter in batches. In a high-risk market, sometimes it seems like you have missed out on profits, but in fact, you have avoided the risk. Combined with this, exiting decisively is crucial. As long as you make a profit from stock trading, it is always right to exit at any time. After all, you can never obtain all the profits in the stock market.
6. For short-term operations, it is essential to refer to the 5-day moving average. Do not enter if the stock price is far away from the 5-day moving average, as it is the lifeline for short-term trading. If the stock price is far from this moving average, it indicates that the stock price has risen too quickly in the short term. Once the rise stops, a large number of profit-taking positions will be sold, and entering at this time carries greater risk of being trapped.
7. Do not become too obsessed with intraday short-term trading. You have to admit that the smaller the fluctuations, the harder they are to grasp! The genius trader Jesse Livermore has a famous saying: "Big money is made by sitting, not by frequent trading!"
8. Do not try to bottom-fish just because a stock has fallen too much, nor should you go short just because the stock price has risen too high. There is no bottom for junk stocks, and there is no top for strong stocks! 80% of people will get it wrong!
9. Do not transfer money to securities every day, but frequently transfer securities to money, and feel the warmth of money more often. Otherwise, you will become numb from seeing too many numbers. The former will often become a gambler, while the latter is the key to continuous profit!
10. Pessimists may be right, but optimists are the ones who make money! Always be positive and optimistic, be bullish and do more buying, not short selling. The essence of short selling is to go against the general trend, so the risk of short selling is infinite, while the risk of buying is limited!
Without experiencing the biting cold, how can you enjoy the fragrance of plum blossoms? Without tasting the vinegar and ink of the world, how can you understand the sour and sweet of life? All those who have achieved great enlightenment have experienced being beyond help, breaking through to establish, being reborn in the morning, and rising from the ashes like a phoenix, living towards death. If you are at the end of your rope, then you will break through like a bamboo!