In this market, successful traders actually come in three levels.
The first level is the supremacy of mindset.
The so-called supremacy of mindset is actually very easy to understand.
Investing requires a good mindset, or a normal heart, and just this point can actually defeat 80% of investors.
Because most investors will chase the rise and kill the fall, and they will all stand on the mountain top and sell in the basement.
The reason why this rule is established is essentially a problem of mindset.
It's like when the index is at 3300 points, the market must be full of optimism.
But when the index falls to 2700 points, the market must be full of pessimism, feeling that the sky is about to collapse.
Rational investors will definitely think that the risk of 2700 is obviously lower than 3300, the index has a gap of about 20%, and individual stocks are at least 20-30% cheaper to start.
Therefore, investors with a good mindset can choose to add positions at a low level and reduce positions at a high level, which is the low buy and high sell.Investors with a poor mindset believe that there are more opportunities to make money when the index is at 3300, but fewer opportunities when it's at 2700, because their emotions change, and what they see is different as well.
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Investors with a good mindset may not necessarily make a lot of money, but at least in the long run, they tend to have more gains than losses.
The second level is technology supremacy.
More impressive than mindset is technology.
Many investors think that technology is intangible, but in fact, technology is definitely one of the key points of investment.
In recent years, we have become familiar with a term called "quantitative."
The essence of quantitative is arbitrage based on big data models, which is technology.
However, at the retail investor level, technology is imprinted in the brain and may not be able to execute technical strategies in a quantifiable manner, but that does not mean technology is useless.
Technology itself is actually a reflection of a certain rule and is in line with big data.
The reason why retail investors fail to learn technology is that they are not diligent enough, not entirely due to their comprehension ability.Since technology is backed by big data samples, understanding technology requires a lot of practical experience to summarize and generalize.
The sporadic pattern of "fishing for three days and drying nets for two days" is difficult to grasp the true laws behind the technology.
In addition, technology itself is a matter of probability, which many people have not deeply understood.
Quantitative trading models are high-frequency, diversified, and use the probability in the laws to make arbitrage.
For retail investors, they hope to turn technology into huge profits, and concentration has become the key word.
Quantitative overperformance of 10-20% in a year, the value of the technology itself is also 10-20%. If you are pursuing 3-5 times a year, in addition to the technology itself, you also need some luck.
It is relatively tiring for retail investors to make money by relying on technology, because how much effect the technology itself can have, the details are also very important, and grasping the details is definitely laborious.
The third level, strategy first.
Higher than technology and mentality is strategy.
The word "strategy" may be a bit abstract, so let's change it to "trend" or "big direction".The essence of strategy is essentially timing and stock selection, which is also the key to the problem.
For example, in a downward trend, a defensive strategy should be adopted, with valuation as the primary measurement standard, choosing high-quality white-horse stocks that have been wrongly killed, and entering the market in batches for layout.
Again, in an upward trend, an active strategy should be adopted, looking for the main hotspots of the market, and firmly looking good and holding.
The strategy of investment itself is to buy more when it falls and sell more when it rises, a way of arbitrage that is commonly known as a long position in stocks.
The rest are extended strategies, such as risk hedging, quantitative arbitrage, and so on.
For ordinary investors, using a strategy of valuation + cycle, or a trend strategy, is the easiest way to make money.
However, in the actual implementation, most retail investors will not be able to execute due to changes in mentality and lack of technical skills.
Many investors have a good strategy, but in the final execution link, they are not up to par.
Unable to control the mentality, without technical advantages, and do not understand investment strategies, the three no retail investors will definitely not survive in the market.
Don't listen to those stories all day, what investors bought a stock, put it away for a few years and didn't look at it and made dozens of times.Such stories do exist, but how many people can actually make money by luck?
Most investors, without even having their mindset under control, are eager to learn technical skills. Not to mention whether you are diligent enough or have talent, no matter how good your skills are, they will never surpass the level of strategy.
The best strategy in a bear market is to take a break, reduce the frequency of trading, and lower positions. In a bear market, most of the time, technical skills fail, especially in the context of a market crash, where technical skills are worthless.
This is also why so many investment gurus basically appear in a bull market. After 2-3 years of a bear market, there are no more outstanding figures in the capital market, which is the reason.
No one can rely on skills to go against the current. If there is, it is only temporary, because after avoiding one wave, you will be knocked down by another on the beach.The momentum is irreversible, hence the strategy is the key of keys.
Setting aside the idea of making money by short selling, if one simply wants to make money by going long, a good strategy is essential.
A high-quality strategy should at least ensure making more money in a bull market and less in a bear market. It's not as simple as just buying blue-chip stocks and weathering the market cycles.
The decline of some blue-chip stocks in the past two years has far exceeded that of the Shanghai Composite Index, which directly refutes this simplistic approach.
A truly high-quality stock must have one characteristic, which is not high growth, but affordability.
Buying affordable stocks is the best strategy.
Therefore, the core of retail investment is actually how to find a stock and reasonably define whether it is affordable.
Those so-called "punching the board" strategies are not ineffective, but most retail investors simply do not apply.
The recent sudden A-kill incidents have directly proven the cruelty of this market and the riskiness of strategies.
In the future market, ordinary investors, without the ability to judge, may only have the strategy of ETF investment, and it may be difficult to have individual stock investment strategies.The cheapness or expensiveness of individual stocks is the most difficult to judge.
Additionally, controlling positions and buying and selling in batches has become a required course for ordinary investors.
Investment in the future will become increasingly difficult.
Therefore, there must be a fundamental change in strategy.
The original strategies, especially those for short-term trading, will become more and more difficult, while trend-following trading, combined with ETF strategies, may become the only strategy that suits retail investors in the market.
The capital market is constantly evolving and is extremely ruthless.
The process of de-retailization is inevitable, and those retail investors who survive have actually evolved themselves into professional investors.
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