Trader STRATEGY: Prepare for contingency before trading

Trader STRATEGY: Prepare for contingency before trading

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2015-03-02 13:56:02

There are two types of investment ideas prevailing in the market: the left and right trades. The left trader is represented by the value investor, and the trader on the right is more of a trend trader. The strategic premise of value investors is that the stock price of a company can be measured, identified and tracked. The motto is: Prices fluctuate around values, but eventually return to mean values, buy when undervalued, and sell when overvalued. Trend traders believe that: the trend is greater than the day, the market moves to the minimum resistance direction, follow the trend long or short.

In the real world, both of these ideas have successful representatives. But at home, value investors seem to occupy a high-end position, like spring snow, such as the label of their own tall on the flagship. Trend investors are being devalued and considered as lowbrow of presentable. In fact, the thinking and method of trading will be diversified, otherwise a-share or even the world will no longer exist. To maintain enough respect for an unfamiliar field or idea is the most basic common sense of life accomplishment, so it seems unnecessary to be self-reliant.

In fact, both the left trader and the right trader are faced with a problem: what if the next single appears to be losing money? In recent years, Buffett's theory has been deeply rooted, and some textbooks have been widely read, so that there is "falling more buy, more and more value" of the Great fallacy. After 2008 years of super-Big Bear, the "value investor" label of the CMB (China's Buffett faith short), presumably is the pain of false value investment deep experience. Of course, there are also a lot of trend traders to the warp, the rise in the bullish, bearish when the simple thinking is also caused by the rise and fall the ultimate loss of the major cause of losses.

The film "Avatar" can be said to be a revolutionary instalment in the history of film. It opened the world of 3D movies, so that people have an immersive experience, can be said to subvert the people's understanding of the film, but also put the audience back into the cinema. The thought of investing is similar. Most investors ' deals only take into account the rising price of the stock, or just how much to make money, without taking into account the efficiency of making money. If the idea of time is added, it is like the movie from 2D to the beginning, and the way of thinking about the trader is also a revolution. As a matter of fact, once an investor has the idea of a cost-of-money, there should be no more excessive trading and a death-holding problem.

The mistake most market participants make is to give up when it's time to stick, or to stick to it when it's time to give up. Perhaps the other way around is more familiar: traders should be fearful when markets are crazy and traders should be crazy when markets are scared. In practice, however, most participants succumb to emotion rather than rationality. Rational participants should prepare for various strains before placing orders, that is to say, take profit, especially stop loss settings. Even very good companies, at home and abroad, often appear in the market value trap: The company's steady growth in performance, but the stock price has continued to decline for a long time. If this time still holds "CMB thinking", it will inevitably face the green figures on the account. Even after a number of years after the solution, psychological suffering and the cost of time is high on the hold disk.

From the outstanding traders at home and abroad to emit a brilliant idea, most of the idea of small compensation big surplus. The proportional distribution of open positions, the profit-making Jiancang, is the process of how to lock down the profit from the book profitability, the opening of small positions, the unavoidable small probability loss in the trading system, and the rapid withdrawal, which is how to cut down the loss brainiac. Despite the loss, it is still a successful operation to comply with the operation of the trading system.

Trader STRATEGY: Prepare for contingency before trading