Path
Underlying logic, objective laws; road, direction. Understanding the path: finding a trading path that aligns with objective laws. The market follows the natural law of the jungle; enhance cognition, strengthen oneself, strive to be one of the few predators, backed by time, compounding in the long term.
Law
Fundamental principles, rules. Risk first, profit second; cut losses when wrong, take profits when right; prioritize survival, then development. If execution is lacking, legislate for oneself, establish rules, and impose penalties if not adhered to.
Technique
Fundamentals, technicals, and sentiment
Fundamentals refer to the impact of capital, policies, etc., on the financial environment, and the supply-demand logic of the asset itself. Fundamentals are qualitative analysis, focusing on long-term positive and negative influences, while short-term news impact is limited.
Technicals have many schools. Indicator and moving average school focuses on moving average arrangement, divergence, and entanglement; Dow theory discusses long-term, mid-term, and short-term trends; Elliott Wave refers to impulse and corrective waves; Gann theory looks at segments and key levels; price action refers to swings and trading ranges. The core is the alternating operation of trends and adjustments, plus the nesting of large and small cycles. In specific operations, it involves direction, position, and timing.
Sentiment refers to greed and fear. Retail investors often feel greed at high levels and panic at low levels, while major players often manipulate retail sentiment using news at high and low levels. The operational principle is encapsulated in Buffett's classic saying.
Tools
Instruments. Leverage is a double-edged sword. If position is insufficient, leverage comes into play; leverage is a double-edged sword—when used well, it is a tool for wealth; when used poorly, it can lead to liquidation.
Two steps: one, a positive expected trading strategy; two, long-term repeated execution.