When i first came into stock, i was like a bunch of rookies, and the open-up software was blinded by a full-screen red and green k line, a beating number and a sommy term. Looking at the words “market gain” and “change of hands” and “mcd”, the heart goes out and says, “it's not an investment, it's a book. After six months of hard-headed learning, stepping on the pits of death and death, and losing the credit, it slowly became clear that the introduction of stocks would not require an urgent study of advanced theory, but that the basic concepts, trading rules and common fault lines would be more than ten times more important than the next one。
Today, my experience will be summed up into a “new hands guide to avoiding pits”, which will help you move less around and move faster。
What exactly is stock? Let's break the gambling concept first
For the first time, many people bought stocks because they heard that “an old king next door earned 20%” and that “one share doubled in three days”. The temptation to make money is easy to use as a lottery or a gambling tool. - look what's going on. But the essence of the stock is the “certificate of ownership” of the listed company。
In short, when you buy shares in a company, you become its “small shareholder”. The rise and fall in stock prices are essentially expected changes in the market's ability to make money in the future. For example, when a company announces that a new product is on the market, the market believes that it will make more than 100 million profits and that stock prices may rise; on the contrary, if the company is exposed to financial fraud, the market feels that it will lose money and the stock price will fall。
Of course, starters do not have to start with the complex issues of corporate values and industry prospects. But at least understand that buying shares is not a lottery, but a part of the company. This perception helps you avoid the trap of “tracing up and falling down” – for example, seeing a stock rise and fall and rushing in without knowing why it went up; or seeing stock prices crash and sell in a panic, without analysing whether the company’s fundamentals are changing。
I've seen too many newcomers who use their stocks as a gambling tool, and they lose more than they earn. A friend once told me, "i bought a share, went up 15 per cent in three days, dropped 8 per cent in the fourth day, i sold it, and then went up 20 per cent." this is the typical “emotional trade” — without logical support, operating by feeling, and often at the end of the market “slice-cutting”。
Opening and trading rules: these “hard rules” must be known in advance
The first step is to open an account. It is now convenient to open an account by choosing a top-ranked coupon dealer (e. G. Chongshin, huatai, gutai kwok an), downloading their aps, filling out their id cards, tying bank cards and making risk assessments. But the opening of accounts is only the first step, and the rules of the transaction are the “play instructions” that are easy to step on。
Time of transaction: do not order in “non-business time”
Unit a will be traded on workdays from 9. 30 to 11. 30 a. M. And from 1 to 3 p. M. No trade can be made on weekends, holidays, after closing (after 3rd) and before opening (before 9:30). The mistakes often made by the newcomers were to see “a good announcement of a good company’s return” over the weekend, to open up the ap to put down a list, to find out “system maintenance”; or to study stocks at night until midnight, to feel that “a sure rise tomorrow” and to leave the list in front of the opening of the next day is not valid。
Rise and fall: don't fantasize about “one-night wealth” or “no blood”
The daily rate of rise and decline in the main stock stock (st. 5 per cent) is 10 per cent (st. 5 per cent) and 20 per cent for science and business. This means that even if a company announces that it “discovers a gold mine”, stock prices will increase by up to 10 per cent (or 20 per cent) a day and vice versa, if the company goes bankrupt, it will drop by up to 10 per cent (or 20 per cent) a day. So, let's not be fooled by rumours that “a single stock will rise by 50 per cent a day” — that was the first day of the new stock listing (without a rise or fall limit) or the case of the hong kong or the united states shares, and that it is impossible for an a stock to be in ordinary stock。
3. T+1 system: not available on day sell
Unit a operates a “t+1” trading system, i. E. Stock purchased on the same day and sold the following day. The purpose of this rule is to prevent excessive speculation, but for starters it means that “the order must be clear” — if the stock price falls on the same day, the sale cannot stop immediately, but only wait the next day. When i first started trading shares, i saw a 5 per cent drop in the price of the stock and cut meat, and the price rebounded 8 per cent the next day, regretting to hit my thighs。
The most easy pit for a freshman: i made these mistakes twice
In the introductory phase, avoiding mistakes is more important than learning skills. I stepped on two typical pits and spent six months and $20,000 on tuition to understand:
1. Information-only, no logic
When i first got into the market, i loved financial news: a company signed a big order, a good business policy, a big man's stock increase ... Seeing this, the first reaction was to “buy quickly”. And? On one occasion, a “billion-dollar order signed by a light-voltage company” was seen rushing in, resulting in stock prices falling instead of rising。
It was only later that it became known that 1 billion orders accounted for less than 5 per cent of the company's annual profits, that there was only 3 per cent of the profit space and that the delivery cycle was two more years — the market was clear, and only i did not understand。
Lessons: the message is “outcome”, not “cause”. When you see good news, you ask three questions: how much does it affect the company's profitability? Short or long? Has the market responded in advance (e. G., stock prices have risen by one wave)
Financial data are not visible and are being manipulated by “face numbers”
The financial report is a “statement card” for listed companies, but the newcomers look at it and tend to focus only on “net profit growth”. On one occasion, an annual report by a company showed a “net profit increase of 50 per cent” and found it to be a good company and bought it quickly, resulting in a 30 per cent decline in stock prices for six months. A careful analysis of the financial statements later revealed that the 50 per cent increase was due to the sale of two office buildings (non-recurrent gains and losses), while income from the main operation (selling products) fell by 10 per cent and the māori rate fell from 30 per cent to 20 per cent — the company was actually on the downside。
Lessons: the financial statements cannot be seen only as “net profits”, but also as “absorption of non-net profits” (elimination of non-recurring profits), “māori rates” (reflecting product competitiveness), “cash flows” (money actually received by companies). For example, if the net profit increases but the cash flow is negative, it may be that the company supports its performance on credit (receipt after delivery) and risks bad debts in the future。
For starters: learn to walk and learn to run
The opening of the stock is like learning to drive -- learning the rules of the road, practicing basics, and finally getting on the highway. For starters, don't rush to make money in the first three months
Water testing with small funds: for example, for $10,000, one or two shares, experience the trade process, experience stock price fluctuations, even if they are lost。
Recording of every transaction: what shares to buy, why to buy, how to buy, how to sell, how much to gain or how much to lose. A month later, we'll come back to see which decisions are right and which are wrong。
Basic analysis methods: e. G. Looking at k-line maps (other complex indicators, first supporting position, pressure level), reading newspapers (first learning to read net profits, mĀori rates, cash flows), following industry dynamics (e. G. New energy sources, policy changes in medicine)。
Equity investments are marathons, not sprints. At the start-up stage, less mistakes are more important than more money. It is hoped that today's sharing will help you to avoid the pits i've stepped on and walk more steadily and further along the investment road。
