1. The most suitable strategy for retail investors: choose fewer stocks and focus on familiarity.
Stock selection is not about quantity but quality. Familiar stocks are a hundred times stronger than new ones.
Retail investors are not suitable for chasing hot spots or changing stocks every day. The most reliable strategy is:
Select 3-5 stocks that you are familiar with and trade them back and forth for a lifetime.
The three major rules for stock selection (lazy version) are as follows:
🔹 Fundamental stock selection (risk avoidance).
Do not buy stocks with performance growth below 15%.
Do not buy stocks with a price-to-earnings ratio over 30 times.
Do not buy stocks with a price-to-book ratio over 3 times.
Do not buy stocks with negative cash flow or high debt ratios.
Do not touch goodwill stocks or stocks with equity pledges.
🔹 Technical timing (follow the trend).
Do not buy stocks that are declining on the quarterly chart.
Do not buy stocks that are still in the A wave on the monthly chart.
Do not buy stocks that have not finished their weekly bottom.
Do not chase stocks that rise wildly at the end of the big wave.
Only enter at 'trend starting point + small wave adjustment end'.
🔹 Avoid risks from news.
Do not touch stocks with major bad news or rumors of violations.
Apply this model, select the industries you are familiar with, and then pick 3-5 stocks with good quality and clear trends to rotate and make large waves.
This is much stronger than constantly changing stocks, chasing themes, and gambling on news.
2. Different stocks require different strategies.
Stock trading is not a one-size-fits-all approach; different types of stocks require different strategies.
1. Large-cap stock strategy (suitable for conservative investors).
Lay low during downturns and sell when performance improves.
Low volatility, suitable for long-term holding.
Look more at historical highs and lows to grasp the value center.
2. Small and mid-cap stock strategy (suitable for trend following).
Easier to be speculated by the main force.
Focus on low valley reversals, with a cycle of 1-2 years.
More sensitive to the environment and news, timing is more important.
3. Growth stock strategy (suitable for active investors).
High profit growth is key.
The industry should be new, the company should be small, and the growth should be fast.
The mid-term of a bull market is the best buying period; decisively exit during the frenzy period.
4. Speculative stock strategy (high risk, high volatility).
Main force lifts, dramatic rises and falls.
You must pay attention to the main force's movements and the chip structure.
Suitable for short-term experts; not recommended for beginners.
5. Blue-chip stock strategy (long-term capital safe haven).
Stable profits, considerable dividends.
Do not seek quick profits, but have strong risk resistance.
Able to hold and maintain, suitable for lazy long-term layouts.
3. There should be rules in stock trading; you cannot rely on feelings.
What you need is a method, not luck.
Remember this eight-character mantra: 'Simple - Patient - Endure - Not Annoyed.' It is more important than any formula.
1️⃣ Simple: Understand the trend, intervene less.
2️⃣ Patience: Do not act if there is no rise.
3️⃣ Waiting: Only act when the probability of winning is high.
4️⃣ Endurance: Do not be swayed by intraday fluctuations.
Trend market + familiar stocks + standard process = stable profit.
Do not be greedy, do not be anxious, do not fantasize about getting rich overnight.
Making money in the stock market relies on discipline, not inspiration.
The retail investors who can truly continue to make money in the A-shares market are not the smartest, but the most patient.
By familiarizing yourself with stocks, following trends, and maintaining discipline, you will find that you no longer frequently cut losses, misread the market, or regret your decisions.
