A friend asked me: "there are many highly qualified professionals around me, and they are the best in their respective fields. Why are they all losing money? What's the advantage of a stock market game? How do we win
Why do the bulls in all walks of life fail in financial markets? The reason is, in fact, to lose the word "scramble." they are highly educated and highly qualified, but they fail to capture the core of “business behind stocks”, and they lose price volatility and humanity. Senior finance staff of a well-known foreign car company have invested in a power company that they don't understand; a doctor of medicine has bought shares in a car company ... Many examples of this are in line with the phrase “humanity reduces iq”. Leaving their niches and skills, "no need" and "maybe" are bets。
After many stock market injuries, i discovered that stock market variables were multidimensional and complex, just as humans could defeat the world's greatest chess masters with computers, but still they could not achieve the desired results in the stock market, thus demonstrating their complexity. In the stock market, mistakes are usually made not because we have little understanding of the industry, not of the companies, but because our research and thinking are not comprehensive, but because the trees do not see the forest and do not form a complete trading and thinking framework. Common fundamentals, technical aspects, financial aspects, emotional aspects, etc. Are all elements of this system and framework, which together form the basic model of stock market probabilities thinking and the entry tickets for our participation in this game。
Basic elements of stock market success
Dr. Van k. Tharp, in his book " the road to financial freedom " , considers that there are three components of the transaction: psychological state (memotional control), financial management and system development (trading methods). The state of mind is the most important (approximately 60 per cent), followed by fund management/position determination (approximately 30 per cent), while system development is the least important (about 10 per cent). A complete stock market perception system has at least five components: big case studies, industry awareness, business analysis, fund management, emotional control - the “five carriages” of the trading system. These five aspects are the key to our participation in the stock market game: building our strategy, five-rounding, none of which is going to make a difference, and putting the five elements to maturity would make it possible to achieve good results in the stock market。
In dr. Fan's understanding, the psychological state (memotional control) is in place to overcome the human vulnerability of fear and greed by removing the idea of one-night wealth and quick money, raising the chances of winning to more than 50 per cent, which is the strategic “track”. In fact, why not? Even at the peak of a career, when one loses its own self, when one loses its inner balance, that is to say, the beginning of a rapid decline in a career, or even a fall in a cliff, for those who do stock, the cattle market is highly leveraged, highly financed, its assets appreciate rapidly, and when the bear market arrives, everything will remain dusty if it does not survive。
2. Probability thinking
Nothing in the stock market is 100 per cent, and everything is optimized in terms of “probability” and “probability” to increase its chances of winning. Whether it be basic analysis, technical analysis or financial management, mind control, it is assessing the chances of winning a single fight, just as generals on the battlefield plan and deploy a war, a battle campaign, and not a hundred percent, it is a comprehensive assessment of the situation in all its aspects and a plan of action that is most conducive to their success。
The certainty of the stock market is based on probabilisticity, origin and the fundamental tenet of the stock market: the ultimate determinant of the stock price is the enterprise, whose development determines its dynamics. This simplest argument, in the fog of market speculation, has led too many people astray。
So what's the probability and the probability? By definition, what most people can do is probability and vice versa. Most people get married in their twenties, and most of them spend the rest of their lives in normal flats, and it's almost impossible for a plane to fall, and ordinary people lose most of their shares, which is also the probability。
With probabilistic thinking, we will understand that in stock market games, basic aspects, technical aspects, psychological aspects, financial aspects, etc., are one of the factors in measuring probability success. The stock market is a melting pot, ideas and methods need to be widely integrated. Value investments, trend investments, technology analysis, graphic analysis, fundamentals analysis, etc. Can be self-contained, and good work can be done well in the market. I've gone through more than one cycle over the years: looking at the graphics, finding it bad, playing with the basics, and then finding out that many of the basics don't go up at a time when the market is booming, and the bigs don't go up, and i can't hold the stock, and then changing the trend investment, not working, and then changing the value of the investment。
How much of this combined probability score is the central point of thinking for a single strike, such as the current situation, whether you want to go in and bounce back, or you want to build a middle line. What are your chances of winning in your cycle? With the big trends and the large exchange rate alone, the chances of winning are much reduced, the better in other industries, the better in shares, and what does it mean? No eggs under the nest。
3. Focus on competency
Limited human capacity and knowledge structures, limited human energy, limited energy, and a long period of time to gradually expand the circle of capabilities and expand the scope of research, are the shortcuts to growth, slow or fast, which, in fact, appears to be slow and, in the long investment career, is the last wise way to laugh。
For us in general, the advantage of “special resources” is that they belong to a group without a bottom card, and the market's choice of direction is two ways: first, focusing on business values, bands or large bands of speculation, most of the time without having to look at the market, and secondly, focusing on market price games, believing that all elements of the fundamentals are reflected in price trends and following the market. Two ways, two kinds of operation, "value game" vs "price game", one that goes through the market, don't tell me what would happen if the two went together, so you wouldn't read my code, so, without more than a decade of gunpowder, without three or four bear turns back, be careful。
Most of the investors made the mistake of “swaying” — swaying in the “value game” and “price game” camps, which was hard to replace, and the cycle ended up being lost. The core of the two game models is “focusing on”, and the core of the value game is focused on familiar industries, familiar stocks, long-term bands, large bands, and repeated operations to catch up with markets, one holding cycle that may be two years, the market is bad, and the holding cycle can be reduced to weeks. At the heart of the price game is “the exercise of discipline”, all of which operates in accordance with the trading system, leaving aside all subjective and emotional factors and not believing in anyone's views。
The key to these two models is to choose an approach suited to one's personality, to practice for a long time, not to hesitate and swing after the choice, not to change the other side, not to change the other side, to change the runway, not the way, and the problem is that there is a problem with the strike position, which will not solve the problem。
The market is a question of “probability” at the end of the day — how big is it? How's the industry? How's the exchange rate and the macro? How's the stock you bought going? How's the market? How's the capital? All of these factors are important, and each part of the assessment is rated as a “probability of winning”. Ask yourself, by comparison with the five wagons, what level have we done with “great research, industry awareness, business analysis, financial management, emotional control”? Do you have your own criteria for the short- and long-term direction of power? Do you know enough about a business? Or do you have confidence in the pattern of changing the style of the market industry? Does the study of the unit have its own test set? Do they have their own mechanisms for fund management and risk control? Is self-aware enough? Can you control your demons
In pursuit of the conjecture, the confidence to do certain things can only be achieved after the reflection of “great awareness” and “self-aware”, and it must be “focusing, patience and reflection” in order for this path to continue. As sporandi said in the principles of professional speculation, emotional discipline is the first point to success. Only when emotional discipline is set on the basis of self-awareness and mutual knowledge, strict enforcement and constant reminder of one's weaknesses, can mentalities grow and survive in the market. Thinking clearly about its survival strategy, gradually incorporating the skills of money management, learning lessons after each defeat and deepening our understanding of our weaknesses, we will be able to upgrade our investment agenda。
In the game of games, only probabilistic thinking can win。
You can split all the problems at work in the form of an exercise or a summary。
