"King of speculation"- Livermore Of Four Investment Principles!
In any crisis, there will always be a group of enterprises going out of business and a group of investors being robbed of their wealth. At the same time, there will be another group of people who will seize the opportunity to realize the leap of the class, and the social class and structure will be mercilessly shuffled.
Now we are experiencing such a big shuffle, and we are still living in the market, but can we continue to live and seize the opportunities that belong to us?
Livermore's life has left us valuable experience. He has been the largest individual investor on Wall Street all his life, operating independently, judging by himself and trading by himself. He never Prys around for gossip, inside information or cooperates with others.
From 1892 to 1940, Livermore participated in stock operation for 48 years. After numerous ups and downs, he left valuable lessons for future generations. From these lessons, the following are some principles worth learning for our ordinary investors:
First, not everyone is fit to operate stocks. A calm mind is the key to success. Only in this way can we maintain a sound mental balance - not led by greed or fear. In terms of personal emotional control, he thinks it is very important to control emotions and maintain patience.
Second, frequent trading (daily or weekly operation) is the loser's way of playing and will not achieve great success. There are many opportunities for operating stocks for profit, but sometimes, we should hold back and never operate. When the market is short of great opportunities, it's wise to take frequent breaks and vacations. Because in different markets, sometimes you can stay on the sidelines and be a spectator, and you can see the major changes better than watching the small fluctuations day by day.
Third, learn to stop loss. Protect yourself from the influence of wrong decisions, and lose up to 10%.
Fourth, don't easily listen to other people's gossip and inside information. Do your homework well, only look at the facts and understand the fundamentals.
I think these four lessons are not only applicable to stock investment, but also to digital currency investment.
In contrast to these four, reflect on ourselves carefully. Many people who enter the currency circle are looking forward to "getting rich overnight"? Many people show off how many points they earn today and how many points they earn tomorrow? There are always people busy to find out which coins are operated and what plans are there for pulling the market?
Livermore is regarded by Wall Street as the pioneer of technical analysis. And technical analysis is also the investment that most investors in the currency circle are obsessed with. When people talk about technical analysis, it seems that the first impression is to lie in front of the screen every day and watch the market, always paying attention to the price trend. But from Livermore's experience, we find that this master of technical analysis is against frequent operation.
The third experience mentioned above is to leave as soon as possible once 10% of the loss is lost. Everyone will have different opinions on whether the stop loss range of 10% is suitable, and it may not be a universal principle, but once the stop loss level is reached, it is necessary to leave as soon as possible, and how many people can do it?
When most people arrive at the stop, their first reaction is not to stop the loss immediately and leave the market, but to comfort themselves immediately: wait, don't sell first, maybe it will rebound soon. As a result, when we wait like this, we will lose our lives.
Of course, every operation principle has its precondition, which includes specific investment target and investment cycle.