Source: festivals

Niuniu knocks on the blackboard:

Livermore believes that what speculators need to control most is their emotions. It is not reasoning, logic or pure economics that drives the stock market. The real driving force is human nature, and human nature has never changed.

Jesse Livermore (Jesse Lauriston Livermore) was born on July 26, 1877, a Wall Street legend in New York in the 1920s.

He went bankrupt several times in his 40-year trading career and made a comeback several times. Made hundreds of millions of dollars by shorting during the Great Depression of 1929. His trading rules (entry timing, money management and mood control) have been going on for more than 70 years and are still very effective in today's stock market.

A successful speculator must always learn the following three points:

Admission time-- when will you enter?As Eddard Bradley, a close friend of Livermore and owner of the Palm Beach casino, often says: "when to hold, when to stop." "

Fund management-never lose money at willDon't lose your chips or your position. A speculator out of cash is like a grocer out of stock. If there is no cash, you are out. So don't lose your capital!

Emotional control-before making a successful trade, you must make a clear and detailed trading plan and strictly implement it.

Before really starting to speculate, every speculator must draw up an intelligent battle plan and modify it according to his or her own personality.

What speculators need to control most is their emotions.Remember, it is not reasoning, logic or pure economics that drives the stock market. The real driving force is human nature, and human nature has never changed. This is what we are born with, and it will not change.

"unless you invest real money, you will not know whether your judgment is correct or not. "

Livermore once said: "if you don't put your money on the table, you can't test your judgment because you don't really test your emotions."

I believe that it is human emotions, not reasoning, that control the stock market.Everything important in life is like this: love, marriage, educating children, war, crime. There are only a few times when the force that drives people is reason. "

"of course, I'm not saying that sales, profits, the world situation, politics and technology don't work on stock prices.

These factors will eventually play a role, and the entire stock market and the performance of individual stocks will also reflect the impact of these factors, but the most powerful and extreme factor is human emotion. "

"I believe that everything has a cycle, life has a cycle, the market also has a cycle. These cycles often go to extremes and have little chance of achieving balance.

The cycle is like the waves on the sea, the waves are higher when the situation is good, and the low ebb will emerge when the carnival is over. These cycles come and go unexpectedly, unpredictable, and if you want to withstand the challenges of the cycle, you have to be restrained, poised, and patient at all times-for better or worse.

But keep in mind that skilled speculators know that you can make money no matter how good or bad the market is, and as long as you are long and short, as I do, there is no psychological burden. "

Market principle

"I realized a long time ago that the volatility of the stock market will not be so obvious. The stock market is trying to fool the vast majority of people most of the time. My trading principle is based on reverse thinking, which is contrary to human nature. "

Stop the loss in time; make sure your judgment is correct before the position is full; if there is no good reason to close the position now, then let the profit run.

Only do the leading stocks, but when the market changes, the leading stocks will continue to change; do not pay attention to too many stocks at the same time to ensure sufficient attention; the emergence of new highs may be a sign of an effective breakthrough.

After a sharp correction, bargain stocks look like bargains, but they often continue to fall or have little hope of rising. So stay away from them!

Use key prices to identify trends and confirm that trends continue; don't fight against the market!

"the study of the stock market is actually a research cycle, if the trend changes, then the kinetic energy does not decrease, the new trend will continue-objects in motion will always remain in motion. Remember, do not operate against the market, do not fight with the market! "

"under the action of the market, prices will fluctuate all the time. Prices will not keep going up, and certainly not going down all the time. This is good news for a vigilant speculator, because it allows him to earn both ends of his money! "

The principle of seizing the opportunity of the market

Principle one is that we can really make money from the stock market by "waiting for the right moment"-rather than thinking hard.Don't trade until all the risk factors are on your side-you should follow the principles of trading from macro to micro.

When you have established a position, the next challenge is to be patient and wait for the opportunity to close your position. The temptation to close your position quickly is great, and sometimes you may cover your position for fear of losing paper profit.

This mistake has cost millions of speculators millions of dollars. You have to have a good reason to enter the stadium, and you have to have a good reason when you leave the court. If you want to make a lot of money, you have to wait patiently in the big fluctuations.

Rule number two: trade only when all risk factors are on your side.No one can participate in the market all the time and make a profit all the time. Sometimes, you should just leave the game completely.

Principle 3, if a person has made a mistake, then the only thing he should do now is to correct his mistake and not to make it again and again.Stop the loss quickly and don't hesitate.

Don't waste your time. When the stock falls below your psychological stop, close your position immediately.

Principle 4, stocks often behave like people and have different personalitiesSome are aggressive, some are conservative, some are very nervous, some are direct, some are logical, some follow the rules, and some are unpredictable.

Studying stocks is like studying people. After studying for a period of time, you will find that their performance in certain situations is predictable, which is very useful. You can use it to grasp the timing of stock fluctuations.

Principle five, buy stocks and never disrelish the price is too high, short selling should never disrelish the price is too low, the key is to be appropriate.

Rule 6: if you have an opportunity to clear a large illiquid position, but you don't take it, it will be a very expensive mistake.

Principle 7, if you are lucky and encounter a very good opportunity to make money in the stock market, but do not seize it, then this is also a mistake.

Principle 8, if the market fluctuates in a narrow range and stocks basically do not fluctuate, it is very dangerous to predict when and in which direction the market will move.You have to wait and wait for the market to break through the consolidation range, no matter whether the direction of the breakthrough is up or down.

In short, do not prejudge! You should wait for the market to give a confirmation signal! Do not fight with the market, should follow the minimum resistance line, the transaction should be based on.

Rule 9: never spend too much time looking for the real cause of a stock's price fluctuation. On the contrary, you should pay close attention to the opening.

The answer is always hidden in the information given by the market, so don't seek "why" in vain.

In the stock market, there is an irresistible force behind every big market, and these reasons will emerge one day. All successful traders should be aware of this.

Principle 10, stocks may rise, fall or consolidate.Whether it goes up or down, you can make money-you can buy it or you can short it. As for the direction of your list, it doesn't matter to you.

You can't make a deal with personal feelings. When the market starts to consolidate and you can't figure it out, take a break.

Principle 11, you should pay attention to a danger signal:"one-day reversal"The high point of this trading day is higher than the high of the day before, but the closing price is lower than the closing price of the day before, and the trading volume of the day is higher than that of the day before. You have to be careful at this time!

Rule 12: if the direction of the stock is contrary to your expectations, sell it as soon as possible. This fact shows that your judgment is wrong, and the best policy is to stop the loss as soon as possible.

Rule 13: wait, wait patiently until all the risk factors are good for you, and then trade-only patience can make money.

Principle 14, you should carefully study those stocks whose prices have suddenly fallen, and these stocks have come out of a steep negative line at this time.

If the stock does not rebound quickly, it is likely to fall even more-because it shows that there is a big internal problem with the stock itself, but the exact reason will not be seen until later.

Principle 15, the volatility of stocks is based on the future. The stock price has fully taken into account the current factors.

Principle 16, the signal of a real buying point or selling point is to break through the key price, when the trend has just reversed and a new market is about to be launched. Only by taking advantage of this change in the market can you make the most money.

Principle 17, there are two key prices on the market. One is to reverse the key price, which is defined as: "the starting point of a big market, the trend has changed, and the market mood is excellent at this time." "

You don't have to think about whether it happens at the bottom or peak of a long-term trend. The second key price is the "continuation of the key price".

The "reversal of the key price" just mentioned means that the direction of the market has indeed changed, while the "continuation of the key price" confirms that the previous market will continue-the previous consolidation is for the next big rally.

But you still have to be careful, the key price is often accompanied by a substantial increase in trading volume. The key price is a particularly useful tool for judging the timing of entry, which can reveal when to enter and when to leave.

Principle 18: at the end of a bull market, you need to observe how crazy the market capitalization of stocks is. Good stocks may have a price-to-earnings ratio of 30, 40, 50 or even 60 times earnings. Under normal circumstances, the price-to-earnings ratio of these stocks is only 8 times earnings.

Principle 19, sometimes there is no good reason for a stock to rise. It is pure speculation for the outside world, and many people are following suit, thinking that it is the darling of the market.

Principle 20, "hit a new high" is a very important timing, a new high means that the stock has broken through the selling pressure hanging over the head, and then the minimum resistance line will be strong upward.

The first reaction of most people to see stocks reaching new highs is to close their positions immediately and then invest in other cheaper stocks. This is wrong.

The principle of trading from macro to micro-- pay attention to the general trend of the market

Principle one, before trading, speculators must understand the whole trend-that is, the minimum resistance line of the market. He must find out whether this minimum resistance line is up or down, and this principle applies to individual stocks and the general trend as a whole.

The most basic thing you need to understand before trading is where the whole trend is going, whether it's up, down or concussive. You have to figure this out before you finally decide on a deal.

If the whole trend is against you, then you have a lot to lose when you trade now-remember, you should follow the trend, follow the wind, never go against the market, and most importantly, don't argue with the market!

Second, the movement of plates is the key to timing-when stocks fluctuate, they will never act alone. If American steel is to rise, it will not be long before Bethlehem Steel, Republican Steel and Crucible Steel will follow.

This principle is very simple. If the fundamentals of American Steel are so good that they become the new darling of the market, then other stocks in the steel sector will certainly rise because of the same positive.

Principle 3, only trade strong stocks in strong sectors. In any industrial sector, buy only the strongest leading stocks.

Principle 4, take a closer look at the leading stocks in the market, those that lead the market to rise in a bull market. When these stocks start to stumble and stop hitting record highs, this is often a sign that the market is about to turn. And as the leader turns, the whole trend is about to turn.

Principle five, when studying market trends, only pay attention to the hot spots of the day, those leaders. If you can't make money from the hot spots of the day, it's hard to make money from the stock market.

Hot spots focus on the main fluctuations of the day, which is where you make money. This method also controls the scope of your attention, helps you focus, and you can better control your energy.

Rule 6, before you buy a stock, you must think clearly in advance that if the stock moves against you, when you must clear your position, that is, set a clear stop point. More importantly, you must abide by the rules made in advance!

Principle 7: successful traders in the market should only participate in those speculative opportunities with the highest odds. At first, try the order with a small position to see if your judgment is correct, and then increase it again and again.

Never build a position at one time-use test orders to confirm judgment and timing, and find the minimum resistance line. The method of trial order is also an important part of "fund management".

Principle 8: if something "unexpected" occurs, the trader must react immediately. You can't predict this situation at all. If there is an opportunity to give money in front of you, take it.

If there is bad news, run, don't look back, and don't hesitate to clear your position.

Principle 9, after a long rise, if there is a trading volume magnification, or even a big knock (the same investor uses different accounts to buy and sell at the same time), be careful at this time.

This is a hint, a red alert that the uptrend is about to peak. At the same time, it may also reflect that stocks are being thrown from makers to retail investors, from professional speculators to the hands of the general public, from the stage of continuous fund-raising to the stage of continuous shipping.

The general public tend to think that this volume is a sign of active trading, that a healthy market is undergoing a normal correction, and they naively believe that the peak or bottom of the market has not yet arrived.

Edit / lydia