These are the tricks for short-term stocks

Chapter 6 Preparations for short-term trading (6)
7) Only trade in active stocks, and thinly traded stocks should not be operated.

8) Diversify risks. If you have a large amount of funds, you can trade 4-5 stocks.

9) Avoid entering and exiting the market at a price limit, and buy and sell in the market.

Io) Do not close a position without a good reason, use a stop loss order to protect your profits.

11) After winning consecutive battles in the market, part of the profits can be withdrawn for emergency needs.

12) Buying and selling transactions should not only hope to receive interest.

13) Do not overweight when encountering losses in trading.Seeking to reduce costs may accumulate small mistakes into big ones.

14) Don't get out of the market because you're impatient, and don't get in because you're impatient.

15) Avoid winning small profits and losing big money.

16) The stop loss position set when entering the market should not be canceled indiscriminately.

17) Avoid entering and exiting the market too frequently.

18) Stay consistent with the trend, not just one-sided.

19) Don't buy because the price is too low, and don't be short because the price is too high.

20) Be careful to increase the price at the wrong time, that is, to prevent false breakouts.

21) Select small-cap stocks to go long, and select large-cap stocks to short.

22) Never hedge.That is: if you make a mistake, you will be out immediately and wait for another chance.

23) If there is no proper reason, stick to your trading strategy, and don't leave the market if there is no obvious change in the trend.

24) Avoid adding trades after long-term success or profitability.

Tip 22 Focus on money management
Many short-term masters often find it difficult to accept the term "gambler" just as hard to accept the derogatory term "speculation". In fact, their practices are far inferior to those of professional gamblers. They only care about a good reputation and self-righteousness. way of doing.It is also the stage of the game. Many short-term masters spend a lot of time on market forecasts. They believe that only with good "cards" can they win. In order to find "a good set of cards", they often spend too much energy on the market rather than itself.Trying to find the most accurate analysis method, trying to find the most worthwhile market, trying to find the Holy Grail of trading... This not only makes them fall into a dilemma of ignorance, but also makes them lose more market opportunities.On the contrary, even if they can find the most worthwhile market to trade, they are often not sure that it is the most worthwhile market to trade.Coupled with complex and volatile trading psychology and short-term market fluctuations, it often happens that you see the right thing but do it wrong.

Since it is more important to do it right than to see it right, how can we do it right?Being right does not lie in the short-term master's accurate grasp of the market trend, but in his ability to respond to future trends, that is, the ability to "see tricks and break tricks".This often involves short-term masters' assessment of risk, judgment of winning rate, estimation of market opportunities, ability to adapt to future market conditions, and their experience in opening, increasing, reducing, and closing positions.To put it simply, the common way to do it right is: if there is no opportunity worthy of entering the market, i will not enter; if there is an opportunity worthy of entering the market, enter the market lightly; Increase in batches; if the market trend is stagnant, immediately reduce your position; if the market trend is clearly turning around, leave the market immediately.

The above-mentioned correct "betting methods" can be summed up as fund management, that is, short-term masters manage their own funds in terms of investment direction and investment rhythm.Money management is the key to distinguishing winners from losers, and successful traders always list correct money management as the headline principle for making money.No matter what type of short-term expert you are, and no matter what method you use to profit from the market, if you don't know how to manage trading capital, it is difficult to gain the right to survive in the market for a long time.The best short-term players are not those who occasionally make the most money, but those who always lose the least, and their risk tolerance is usually very low.

Even a sprinter with the best car in the world won't necessarily outperform a mediocre Volkswagen in a months-long race if the driver is sedate and experienced and cares about the road safety and stability.In the same way, even if a short-term master has the trading system with the highest probability of success in the world, if he does not know how to effectively implement the rules of fund management, he will eventually end up bankrupt with a small probability of failure, just like the most dazzling long-term trading system on Wall Street. capital management company.People who think faster can come up with faster methods, but they are often prone to accidents; slower people pay more attention to safe methods, and can sail to the other side of victory instead.

The fund management method is the armor for short-term masters to deal with uncertain markets. It can enhance your ability to resist market risks and obtain a survival time different from ordinary people.Good money management methods can:

1) Make you pay attention to the grasp of high probability opportunities.

2) Opportunities that enable you to strike high returns.

3) Make you understand how much risk you can take.

4) Enables you to deal with worst-case scenarios.

5) Enables you to deal with profit maximization problems.

6) Let you know what method is the most suitable way to exit.

7) Enables you to minimize losses.

8) Enables you to preserve the most precious trading capital.

9) Enable you to deal with the problem of stable value-added of large funds.

lO) enables you to avoid a gambling trading mentality.

No. 23 Straighten out the three aspects of fund management

Fund management is the management of investment funds in terms of investment direction and investment rhythm. If investment funds are only limited to buying and selling in the stock market, then it will involve the management of portfolio, position, and timing.Of course, short-term masters can also use funds for special transactions such as "new shares" and "participation in private placement", but this will not be elaborated here.

1.Combination: input direction
For large funds, the risks faced by concentrated investment in a certain stock are relatively huge, so it is necessary to diversify investment and carry out combined investment.The so-called investment portfolio is to invest funds in multiple stocks with different attributes or in different trading markets based on certain market theories and experiences. When a single product or a single market moves in reverse, to avoid Significant losses occur; multiple varieties and markets locked and intervened by short-term masters are investment portfolios.

The purpose of the investment portfolio is not only to make profits, but more importantly, to prevent the systematic risk of large funds.Because the stronger the correlation, the greater the risk of simultaneous reverse; and the more heavily held a single stock, the greater the risk of reverse.The principle of combined investment is to require short-term masters to minimize the risk of a single variety, not to "put all eggs in one basket", and not to adopt egalitarian approaches to investment objects, but to focus on and be technical. Diversify your investments.

Portfolios often involve three levels of content:

1) Do not conduct investment transactions of a single variety.Transaction objects can include stocks, bonds, warrants and other varieties.

2) No portfolio investment in related industries.For example, the manufacturing industry and public utilities have a low degree of correlation and can be considered at the same time.

3) Conduct multi-period investment portfolios.Transactions should include long-term investment varieties and short-term trading varieties.

However, when using the investment portfolio, we must pay attention to the scale of fund dispersion.Decentralization refers to the dispersion of non-related transactions, but it must also pay attention to the principle of concentration, and cannot be dispersed without limit, resulting in the consequences of opening a grocery store.Generally speaking, in the face of more than a thousand stocks, the number of stocks that short-term masters can manage well will not exceed 9, and these 9 stocks may also cover short-term, medium-term and long-term trading styles.But it should be noted that in a long bear market, short positions are a wise move for big funds.

2.Position: how much to invest
The so-called position refers to the amount or capital investment of short-term masters in individual stocks.There are often two ways to define a position. One is the rated position, that is, the planned number of shares held in a certain stock or the total amount of capital investment; In the process of gradually reducing to zero, it is always in a state of flow.

The calculation of rated positions is relatively simple, it only needs to conform to the consistent trading style of short-term masters, and can be confirmed after evaluating the reward/risk ratio; while the management of current positions is more complicated, it requires short-term masters to strictly implement the opening, adding Management standards for positions, positions reduction, liquidation, etc., and rich trading experience of short-term masters are required.

For position management, the simplest standard is: if the risk is high but the opportunity is large, the number of positions will be reduced; if the risk is small but the opportunity is large, the number of positions will be increased; for short-term trading, the number of positions will be reduced; Increase depending on the reward/risk ratio; for large-cap stocks, the number of positions can be increased depending on other comprehensive conditions;wait.

Specifically, the strategy can be divided into three steps:

First, determine the funds for entering the market according to the nature of the market.For example, 90% of funds are used in a bull market, 50% of funds are used in a balanced market, 30% of funds are used in a bear market, and so on.

Second, determine the funds for opening a position according to the transaction object.For example, for individual stocks, when the risk < return, you can intervene in time, or even increase your position; when the risk > return, you cannot intervene, and those who have stocks should consider reducing their positions; Can continue to hold shares.

Third, control positions according to the trading style of short-term masters themselves.Different short-term masters have different trading styles, so they will naturally look at different trading opportunities to open positions, increase positions, reduce positions, and close positions.

3.Timing: when to get in and out
When buying and selling stocks, if the amount of funds is relatively large, it is difficult for short-term masters to trade the number of stocks they want to buy and sell at one time, so they often set a limit on the trading time and buying and selling prices for themselves.For example, when buying stocks, short-term masters can pre-determine the best buying range, the second best buying range and the suitable buying range, and make preparations for capital investment in each price range; , You must also consider the appropriate price range and time period to avoid conflicts with the main shipments.

In fact, the operation of the stock market and stocks is cyclical. When to intervene and what products are the experience that short-term masters should have; The result of experience; the number of concomitant operations depends on the experience of money management.

——Combination, position and timing, these three aspects often affect the whole body.When the market risk increases, not only the investment portfolio will change, but also the product positions will inevitably be adjusted, and the timing of the adjustment will also be considered simultaneously.

(End of this chapter)