Trading stocks is an art, a very profound art. The threshold for trading stocks is very low, as low as a few hundred yuan can allow operations. You can enter without relying on relationships and without having to please others; it is a very civilian investment. If you have high comprehension in stocks, it can indeed be a very good path to success. However, doing well in stocks is a very difficult matter, as there is much to understand, and it tests human nature significantly. Therefore, most retail investors do not make money and blame the market, which is a rather one-sided view. If you have not transformed yourself, how can you compete with millions of people in the market?
Trading stocks is actually a test of thinking. If your thinking is correct, you will make money in the stock market. Why do most people lose money in the stock market? This is because they have received incorrect education upon entering the market, resulting in erroneous ways of thinking. This wrong thinking leads many small and medium investors to lose money year after year and become trapped. Now we provide some guiding suggestions to help you abandon your previous erroneous ways of thinking and enter the stock market with a new mindset to achieve the maximum benefits.
The stock market is like life; the most important, easily overlooked, and hardest to truly accomplish is to adhere to trading discipline. Every time you stick to your principles, you will succeed; every time you violate your principles, you will fail. Life is the same. New investors must adhere to principles and discipline, while experienced investors should not cross the rules and bottom lines. Never losing in the stock market is by no means a myth!
Today, I have summarized 20 key points of stock trading for you, so that everyone can navigate the stock market with ease in the future:
1. Mastering the theory of moving averages is enough to earn a lot.
2. Even if you can fully master one stock in a year, that's enough.
3. If your capital is below one million, it is not difficult to double it during an annual bull market.
4. It's best to flip through the K-line charts of individual stocks by hand every day, as this will align your thinking with the main players.
5. There's really no need to be too greedy because the money in the stock market is endless.
6. There's really no need to be too afraid because the country will not let the stock market crash.
7. Major players also find it difficult; they are also afraid of being unable to offload their stocks.
8. Stocks with volume at the bottom must be watched, regardless of whether they have truly broken through.
9. Perhaps if you hold on a bit longer, the washout will end.
10. A mid-term mindset, heavily investing in one stock, keeping a little in hand, selling a bit at a high, buying a bit at a low, rolling operations is the best strategy.
11. Reading charts is not about skill; the ability to derive at least 10 insights from a chart is what true skill is. When you reach this level of skill, it will be difficult to lose money.
12. The main things to watch for in short trading are trading volume, turnover rate, and price increase speed.
13. Buying stocks that are bottoming out is the safest.
14. Buying stocks that are gradually accelerating upwards is the right choice.
15. This gap is only one cent wide.
16. The most worthwhile application is the divergence of technical indicators, not the values of those indicators.
17. By overlaying the K-line charts of the overall market and individual stocks or making a detailed comparison, you can judge whether the stock has major players and the strength of those players.
18. Being able to admit mistakes and effectively control losses is fundamental to surviving in this circle; its importance far exceeds the inability to make profits today.
19. Regardless of the method, mastering one is enough. As long as you have one method that you can master to an excellent level, that is sufficient.
20. In intraday trends, if the distance between the white line and yellow line suddenly widens vertically, it is a great opportunity for short-term selling, because you will definitely have a chance to buy back later. The success rate of this approach is over 95%.
The engulfing pattern is a major reversal pattern, composed of 2 K-line entities of opposite colors.
Regarding the engulfing pattern, there are three criteria for judgment:
1. Before the engulfing pattern, the market must be in a clearly discernible upward or downward trend, even if this trend is temporary.
2. The engulfing pattern must consist of 2 K-lines. The entity of the second must cover the entity of the first. (But it does not necessarily have to engulf the upper and lower shadows of the first.)
3. The second entity of the engulfing pattern must have a color opposite to the first entity. (Exception: The first entity must be very small, almost forming a doji.)
Here are some reference elements. If the engulfing pattern has these characteristics, the likelihood of them forming important reversal signals will greatly increase:
1. In the engulfing pattern, the first day's entity is very small, while the second day's entity is very large. This situation indicates that the driving force of the original trend is fading, while the potential strength of the new trend is growing.
2. The engulfing pattern occurs after extremely long-term or very sharp market movements.
3. In the engulfing pattern, the second entity is accompanied by excessive trading volume. This situation may belong to an inflation phenomenon.
4. In the engulfing pattern, the next day's entity engulfs more than one.
1. Bullish engulfing
Normally, the 'engulfing pattern' formed by a bullish candle and a bearish candle can be seen as a 'reversal signal.' For example, the 'bullish engulfing' pattern.
'Bullish engulfing' patterns mostly appear at the bottom of a downward trend, where the last bearish candle is engulfed by a larger bullish candle, indicating that strong upward momentum may occur in the short term. Its characteristics include:
Next, let's look at a real case:
'Bullish engulfing' patterns reflect that stock prices are originally in a downward trend, but then a strong bullish candle appears, which engulfs the previous bearish candle. This indicates that the buying force in the market has gained the upper hand. The market may end the downward trend and turn upwards.
2. Bearish engulfing
'Bearish engulfing' is somewhat similar to 'bullish engulfing.' This pattern mostly appears at the top of a rising trend, where the last bullish candle of the rising trend is engulfed by a larger bearish candle, indicating that the market is likely to decline in the short term.
Let's look at a real case:
Generally, the characteristics of the 'bearish engulfing' pattern include:
'Bearish engulfing' patterns are signals of strong bearish momentum.
After stock prices rise for a while, if a large bearish candle suddenly encompasses the previous bullish candle, or at least the single bearish candle completely covers the single bullish candle to the left, it indicates that the bears are coming on strong, overwhelming the bulls and creating a reversal in trend. The ability to engulf the previous bullish candle shows the strength of the bears, leaving the bulls with no chance to fight back.
Below, I will share the stock market guide outline, K-lines, moving averages, tangents, indicator analysis, stock selection, sector rotation, and various scams in the stock market, hoping to provide a comprehensive understanding of stock knowledge.
1. Stock market guide outline
2. K-line basics
3. Moving average basics
4. Tangent basics
5. Indicator analysis
6. Statistical analysis
7. Stock selection methods
8. Sector rotation
9. Various scams in the stock market
Reasons why retail investors can't hold onto stocks
1. The mindset of taking profits when seeing good results is causing trouble.
Retail investors always think: take profits when they see a good opportunity, sell and then buy a promising stock. This approach will lead to never losing money. This view seems reasonable but is actually absurd. Because, generally speaking, after selling one stock and buying another, the other stocks will also rise. Since you think the sold stock has risks, other stocks that are also rising will have risks as well.
Those stocks that haven't risen do not necessarily mean they are risk-free. Because, first, since they are not rising, after you buy them, they may not rise either, while the stock you originally sold may actually rise instead, which is the risk of missing out. Second, the stock you buy may not only fail to rise in the upcoming trends but may also drop significantly, nullifying your original profits. This situation happens frequently, and anyone who has traded stocks has a deep understanding of this aspect.
2. The thought of making more money by trading in segments is causing trouble.
Strictly speaking, trading large segments is not wrong. The rise of this large segment must exceed at least 30%; otherwise, it is not called a segment. If short-term profits exceed 30%, selling first is not wrong. However, many people sell and then lack the patience to wait for the original stock to adjust to the bottom, instead jumping into another stock. This practice is extremely wrong and is a major reason why many people fail to make money.
Why can't money be earned? Because the stocks you just bought are likely to drop in the upcoming market trends, even more than the stocks you originally sold. Plus, the transaction fees add up. If you finally pick a good stock but casually trade it, your final result will be: the number of stocks you own will just keep decreasing. Why? You can't guarantee that when you come back around, the price of the stocks you originally bought will still be waiting for you at a low point to buy back. That's how the market works; since another wave of the market is rising, the stocks you originally bought will also increase. The big players are not fools; when the market is good, they will also push it up. So, theoretically, trading in segments is feasible, but in practice, the success probability is very low.
3. The thought of weak willpower is causing trouble.
Some people always think their stocks are bad. When they see other stocks soaring while theirs stagnate, they become anxious and furious, believing they have not picked the hot stocks. They then sell at a slight profit or even a loss to chase those stocks that have already risen significantly, thinking they are the hot stocks.
First, it indicates that you did not put in enough effort when selecting stocks, casually buying shares without careful selection. You know to choose carefully when buying clothes, why not when investing so much money in stocks? If you can't even do this, it really shouldn't be.
Second, it indicates that your confidence is not strong or your will is not firm. In fact, looking back, the stock you originally bought is still a good stock; it has risen significantly after you sold it.
4. Fear of losing what you have gained
In the stock market, retail investors often hold onto their stocks for a long time after being trapped because they are unwilling to admit defeat. However, once they make a profit, they want to cash out quickly because they fear losing what they have gained. A little profit is sufficient; anyway, it's good to have made money.
Follow the public account {Encrypted Philosopher} and you will surely gain something. Helping others is like helping yourself. No matter how the market changes, I hope we can always walk together and smile at the stock market after ten years.
