This article mainly explains the four fatal injuries of losing money in the stock market. If you do this often, it is easy to lose money in the long run.
Finally, we’ll talk about how to avoid it and improve your investing skills.
Four fatal injuries
Find someone else for a ticker symbol
Everyone’s investment style and risk tolerance are different. If you often ask people for stock codes, you don’t think about it yourself, and if you rely on other people to invest, you are in a very passive state, even if you can make money in the short term , but it is difficult to make money in the long run.
What is the buying logic? When will it be sold? What are the holding risks? Hold a stock if you don’t know that, and you’ll lose money.
Any professional investing has its own set of principles, so if you want to be successful in investing, stop asking someone for a ticker symbol. But you can ask others how to find big bull stocks? What is your buying logic? Why sell it?
To learn is the ability to think.
watch the market often
Many novice investors will often watch the market after buying stocks, and are addicted to the volatility of the stock, and even watch the market all the time. If the stock rises a little, they will be very happy, but when the stock turns down, they will start to lose. When the stock goes up, I don’t know whether to sell, and when the stock goes down, I don’t know whether to sell.
In fact, it is a very normal thing for stocks to fluctuate up and down. If you are not doing day trading, you should not keep an eye on the market. When you constantly watch the market, it is easy to lose the patience that you should have, and your emotions are easily controlled by the volatility of the stock, and you make wrong decisions.
We should give stocks time to develop and avoid making emotional decisions that cost ourselves money.
Lack of discipline and execution
Discipline is to strictly follow your own investment plan and principles. Even many investment veterans are fallible. They start out with an investment plan, but often fail to execute it because of greed and panic. Or maybe it’s because I read a lot of other people’s opinions and opinions that affect my original investment plan.
And many newbies don’t even have an investment strategy and plan, the most common is that they don’t execute stop losses. The stock fell sharply, expecting the stock to recover soon, and kept letting the stock fall, deteriorating and losing the principal. When you should take profit, you miss the best selling point because of greed and fear of selling flying. Even when the stock began to fall, I did not know that I was halfway up the mountain, and the stock that was originally profitable ended up losing money.
When to sell stocks is the most important part of investing. Selling means risk control and your ultimate return.
Failed to grasp the exact timing
The market has cycles. Some years are easy to make money, and some years are easy to lose money. There are periods of time in the year where it is easy to make money, and there are periods of time when it is difficult to make money. So how to tell the current period? There is a simple way is to use the 50 moving average and 200 moving average to judge.
- 50 MA: Represents a medium-term signal
- 200 MA: Represents a long-term signal
If the current market is below the 50-day moving average, the situation is normal. The ideal situation is to see that the index is above the 50-day moving average and the 200-day moving average at the same time, and the index is above the 50-day moving average. There is an upward trend, then you can Consider buying stocks.
And if the index is below the 200 MA, it is a very difficult time to make money. The best thing to do at this time is to lighten up your positions, keep a portion of your capital, and buy stocks again when the market signals a turnaround.
The following figure is a step-by-step diagram of how to open the 50 MA and 200 MA on Futu:
You have to be willing to dedicate at least 10,000 hours to learn stock investing. On average, it takes at least 10,000 hours of study and research to go from amateur to expert in any field.
Don’t think that you can make money by investing in stocks without learning. Only by constantly learning, practicing, reflecting, summarizing, and practicing again can you have more opportunities to make money in your investment. And all this effort is worth it in the end, because investing in stocks is a lifetime thing.
Take responsibility for all your own decisions
Making money is your responsibility, protecting your principal is your responsibility, and losing money is also your responsibility.
If you pass the responsibility of losing money to others, you will not realize what you have done wrong, do not understand your shortcomings, and if you do not correct it, you will only make yourself repeat mistakes.
You will only take stock investing seriously if you are willing to take responsibility for every investment decision you make.
Treat it as a professional thing, and you will have more chances to make money.
Stock investment is a very professional thing, you should be in awe of it, and don’t take the money you make by luck as your own strength.
Stock investing is a lifetime thing, and it is worth investing at least 10,000 hours to learn.
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