From Collapse to Glory: 'Black Monday'
On October 19, 1987, a day known as 'Black Monday.' The US stock market plummeted over 22% in one day, causing panic among investors, with almost everyone selling off. However, at that moment of market crash, a trader made a counter-trend move at a critical moment. He was Paul Tudor Jones, a young trader who had predicted an economic crisis before the market collapse and shorted stocks before the market began to plunge. With this precise trade, he gained fame, became a legendary trader, and accumulated enormous wealth after the market crash.
I. Maintain a Calm Judgment: Understand the essence behind the market.
Just like what Jones did in 1987, successful traders often remain calm during market panic. They don’t simply follow the crowd but independently analyze market data, looking for opportunities from a long-term perspective. To become a trader who achieves 'legendary status' in one battle, the key is to learn to see the essence of the market amidst turmoil.
How to achieve this?
1. Establish 'Contrarian Thinking': Stay calm and think critically during public panic; try to observe from the opposite side of the market.
2. Macroeconomic Analysis and Micro Observation: Focus on policies, economic data, and company performance, without being swayed by short-term emotions.
II. Decisive Action: Opportunities are always fleeting; daring to act is the only way to seize them.
Jones's success largely stemmed from his decisive actions. Market opportunities are often fleeting, and hesitation can lead to missed chances. True trading masters can make quick decisions and take decisive actions at critical moments.
How to cultivate this decisiveness?
1. Set Action Standards: Develop buying and selling strategies in advance; once standards are met, act directly without hesitation.
2. Use Simulated Trading to Train Reactions: Practice with simulated trading to familiarize yourself with operational maneuvers under market volatility.
III. Comprehensive Risk Management: High returns must come with high safety.
Whether in stocks or cryptocurrencies, the market is brutal. Even though Jones succeeded in the 'legendary battle,' he never overlooked risk management. By setting stop-losses and controlling positions, he ensured that even if mistakes were made, they wouldn't lead to catastrophic losses. This robust risk control capability is the key to long-term survival in the market.
Risk Management Strategies:
1. Diversify Investments: Do not invest all your funds in the same asset; diversifying investments reduces risk.
2. Strict Stop-Loss: Set reasonable stop-loss points, and once triggered, execute immediately without delaying due to a sense of luck.
Becoming a trader who achieves 'legendary status' does not mean relying on luck alone, nor is it simply about buying and selling. In the market, true winners are those who understand the path to long-term survival. Just as Jones did, if you can maintain a calm mind, sharp judgment, and robust risk control, perhaps your moment of 'legendary status' will come amidst future market turmoil.