Capital Fengshi-Liang Yaohao: Why are ten people trading stocks and nine people losing money

There is a popular saying in the stock market: ten people trading stocks and nine people losing money, which means that out of ten people trading stocks, nine will lose money. Why is this happening? I think the main reason is still related to our beliefs. Most people enter the stock market with the aim of quickly making money. Without understanding the rules of the stock market, they blindly buy and sell, resulting in a situation where they buy and then fall and sell and then rise. Occasionally buying the right thing at once is just a coincidence and cannot guarantee long-term stable profits.

   For most retail investors, what can we do to survive in the stock market for a long time? The first thing we need to do is to change our mindset. There is no fast and safe way to make money in the world, and the same goes for the stock market. The smaller the buying and selling cycle, the greater the risk. Therefore, we need to take a long-term perspective to avoid short-term risks, which is the most fundamental quality of an investor.

1、 The smaller the trading cycle of stocks, the greater the risk they bear and the greater the losses they incur. The main reasons are as follows:

　　1 . The short term is full of uncertainty and is easily manipulated by humans.
We know that the stock market has its ups and downs because there is buying and selling, for example100Personally10Selling at a price of yuanACompany stocks, and150Human beings10Buy at a price of yuanACompany stocks, so there are also50People can't even buy stocks, so this50Individuals may end up with11Buying stocks at the price of blocks (provided that someone must pay11Sell the stock at a price of blocks, at which point the stock will also sell from10The block has risen to11Block;
On the contrary, there are100Personally11Buy at a price of yuanACompany stocks, and then there are150Personally11Selling at a price of yuan, then there is still50If an individual is unable to sell stocks, they will consider offering a lower price10Selling stocks for yuan (provided that someone is also involved)10Buy stocks at the price of yuan, and at this point, the stocks will start from11The block fell to the ground10Block.
In fact, stocks are bought or sold at every price point, and the rise and fall of stocks are determined by market demand. At this point, we should also be able to understand that as long as we have sufficient funds, we can control the trend of stock prices in the short term by buying or selling, which is artificial manipulation. Because there are thousands of investors, we don't know who is manipulating it, and it's possible that many people are manipulating it; Even without manipulation, everyone would have different judgments, and the short-term stock price trend would be full of uncertainty and without any regularity.
In this uncertain market, the probability of stocks rising and falling is50%There is a half chance that it will rise and a half chance that it will fall, just like flipping a coin. It has the nature of gambling, also known as speculation.
　　2 . Using technical analysis as a decision-making basis is not reliable.
Speculators usually use technical analysis methods, which use graphics to predict the future trend of stock prices and serve as a basis for decision-making. This method is usually unreliable because the short term is full of uncertainty, and we cannot predict the future trend of stock prices.
By using technical analysis, it is easy to impose our subjective desires on the market, which can mislead our decisions.
Having said so much, it is already very clear that in order to make money in the stock market, we should try to avoid becoming speculators as much as possible, because speculation itself is gambling and cannot make money. Even if we are lucky enough to make a profit once, we will still lose everything next time.
      2、 So how to use a long-term perspective to avoid short-term risks and become an investor? We should know that investors are based on profound analysis to achieve the purpose of preserving or increasing the value of assets. Generally, they need to achieve the following two points:
　　1 . Long lines are necessary to catch big fish.
We already know that the short term is full of uncertainty and is easily manipulated by large funds. To reduce this uncertainty, we can only choose to take the long term to avoid short-term risks. The reason is that the long term is not easily manipulated, and even if you have more funds, it is not easy to shake the overall trend of the market.
　　2 . Using fundamental analysis as the basis for decision-making.
Investors generally conduct in-depth analysis from three perspectives: macro, industry, and company. They are able to grasp economic trends, national policies, industry trends, product supply and demand, company leadership, finance, and other aspects. This can greatly clarify the future development direction of the company and help us make correct decisions.
When we buy stocks, we are actually buying the future of the company. The stock price of a company with good growth prospects will definitely rise steadily in the future, which is a major trend and generally not affected by external factors; And those short-term fluctuations, investors will choose to turn a blind eye because they are inherently full of uncertainty and cannot be grasped. Only by seizing the big trend can we make the wisest choice.
A true investment expert is not just using fundamental analysis as the sole decision-making basis, but rather using fundamental analysis as the basis, combined with technical analysis as auxiliary reference, ultimately able to find buying and selling points more accurately.
       Exclusive planning and release by senior analyst Leung Yiu ho,VX:lcx1012504168Having rich experience in real market operations, with a solid theoretical foundation and practical experience in this article, focusing on fund management and risk control, a stable and decisive operating style, reading ten thousand books is better than traveling ten thousand miles.