Source: Qilehui.

Personally, I am very fond of reading interviews with experts, because the interviews condense the experience and lessons of excellent investors, which is an efficient learning method.

At the same time, by watching too many interviews, you can roughly determine the level of a trader's competence.

In foreign countries, the most powerful interviewer is Jack D. Schwager. He himself comes from a trading background and his interview subjects are also biased towards trading. The investment trend in China is not particularly friendly to trading, which may be the reason why his book is not very well-known in China, but it is very famous overseas, translated into many languages and reprinted many times.

Jack D. Schwager has written many interview recordings including 'Market Wizards', 'Hedge Fund Market Wizards', 'Unknown Market Wizards', etc., spanning nearly 36 years of U.S. stock market history. Each book has a Douban score of 8 points or higher.

Among them, his first book 'Market Wizards' is the most classic. Although it was published 35 years ago, it is still very valuable to read.

For quite a long time, I myself had some bias against trading, which I thought was more speculative, difficult to learn, and hard to sustain. However, this book changed my view on trading to some extent.

This article extracts 120 concise quotes from 14 masters in the book 'Financial Wizards', which basically covers the core content of the book. It is recommended that you collect and watch it repeatedly, hoping it will be helpful to your investment and trading.

1. Key points distilled

★The most basic rules and concepts of trading:

"Cut losses and let profits run",

"Manage your capital",

"Develop a trading plan",

"Trading discipline",

"Do not average losses",

"Reduce trading or wait and see after consecutive losses",

"Independent thinking but with flexibility",

"Correct operation is more important than trading results",

"Do your homework on trading every day".

The efficient market hypothesis holds that market prices contain and reflect all information, and it is impossible to consistently outperform the large cap by using any known information in the market.

However, in international chess tournaments, all players have read the same chess books and played the games of previous champions, but only a few players can stand out.

It is obviously not feasible to assume that all players will achieve the same results by using the same information (chess rules, chess books, and game records).

The emotions of market participants have a huge impact on price fluctuations, and this impact is almost impossible to accurately estimate, making it so difficult to beat the market.

For example, in late 1999, a trader believed that the accumulated increase in technology stocks had been too high and overbought, so he resolutely shorted the Nasdaq futures when the Nasdaq index soared to 3,000 points.

Although the trader's evaluation was absolutely correct, because the 'technology stock bubble' had been ten years in the making and the Nasdaq had risen from 1,100 to 2,900, the technology stock price had indeed been high. However, this smart trader still went bankrupt because the Nasdaq continued to rise by 68% until it peaked at 5,048 in March 2000.

This trader's judgment on the Nasdaq's top was basically correct, but it was a little too early by just four months, and the premature shorting of Nasdaq futures turned into a disaster.

(1) All respondents have a strong desire and inner drive to become successful traders. Many of them have overcome many difficulties and obstacles to achieve this goal.

(2) For long-term and sustained profitability, these respondents are confident. Almost without exception, they regard their trading as the best and safest way to invest their own funds.

(3) Each interviewed trader has found a set of methods that are applicable to themselves and can persist in using them. 'Discipline' is the word they mention most frequently.

(4) These top traders take their trading very seriously and seriously. Most of their time is spent analyzing the market and formulating trading strategies.

(5) 'Strict risk control' is the most critical element of all respondents' trading strategies.

(6) Although the methods are different, most respondents emphasize the importance of patiently waiting for trading opportunities.

(7) When trading, one must maintain independence and not follow the crowd. This is also a point that respondents often emphasize.

(8) All top traders understand that 'loss is part of the trading game'.

(9) All respondents love the trading business they are engaged in.

Part of good trades will lose money, and traders must accept this and continue to make such trades, because looking at the long-term average results, they will be profitable. A single trade loss doesn't mean a bad trade decision. Bad trades may also generate profits, but repeated operations will ultimately result in losses.

For example, when you play a slot machine, even if you win once, if you keep playing, the probability of losing money will be high.

'How to execute trading views' is more important than 'the trading views themselves.' Traders judge the market correctly, but they make mistakes in specific operations such as opening positions, adding positions, and clearing positions, which lead to the failure of the entire trade. This is a common situation among traders.

Traders basically only focus on the position at which they enter the market. In fact, the size of the position at which they enter the market is usually more important than the price at which they enter the market.

Truly excellent traders also have the ability to change their minds in an instant. They stick to their views and do not follow the crowd. However, once they are wrong or the situation changes, they can immediately change their original views.

Continuous losses can lead to negative emotions, depressed willpower, and listlessness. At this time, taking a break can eliminate all negative and negative effects.

When you resume trading after taking a break, you should maintain a relatively small trading volume until you regain your confidence, and then expand the trading volume.

When everything is going smoothly and trading is going well, traders are easily blinded by their victories and blinded by their momentary successes, which leads to a sense of pride.

At this moment, the trader who brags that he will not make mistakes, and thinks that the trade will not go wrong, is unlikely to make the most disastrous plan.

The market will not change its operation because of you. The meaningful question you should consider is, If you are not holding positions and are still on the sidelines, how would you judge the market and what kind of trading operations would you take?

A common mistake made by traders is that even if they realize that their judgments on a certain trade are incorrect and that the trade will eventually fail, they still harbor the illusion that they will wait for the market price to return to the entry and then exit. This is one of the main reasons for turning small losses into huge ones, which is due to linking closing and entry prices together.

Why is it so important to exit a breakeven position? This is related to the trader's self-esteem. If you can exit at a breakeven position, you can say, "I am not wrong. I did not make a mistake." But ironically, wanting to "not make mistakes" is precisely the reason why most people lose money in the market.

Avoid setting annual return goals. Setting annual profit targets and return expectations can lead to traders trading according to preset profit targets when trading opportunities are particularly large. Conversely, when trading opportunities are scarce, traders will trade according to preset profit targets and courageously make low-probability trades.

In this way, it is easy to cause trading losses and make you farther and farther away from the preset profit target.

Jim Rogers

When investing, learn to do nothing, absolutely nothing, until it is really time to do something. Most people are always buying and selling, making a profit on short-term price differences, and earning small profits. These people always have to do something and always have to be busy. They cannot hold positions and can only trade repeatedly.

After losing money in the market, people will say, "I just lost money and I must do something to make up for it through trading." This is wrong. After losing money, you should wait for the opportunity to trade, and don't rush to make up for the loss.

Sometimes big things happen, and the market ignores them and still does things their own way, which really surprises me. Now that I have experienced this kind of situation many times, I realize the reason behind it: what I understand and anticipate may not be understood and anticipated by everyone.

90% of people will focus on the same thing at the same time, but excellent investors or traders can see things that most people can't see. The ability to abandon traditional wisdom and surpass common sense is not very common, and having this ability is not easy.

I get information by reading the news, and I have no insider information. I tend to believe that if I know something, everyone will know it. What I know and master now may not be understood and mastered by others, because most people have a short-sighted vision of six months, one year, or two years.

The stock market is crazy and unreasonable, and anything can happen. The market will overshoot, and the height of its rise will exceed your expectations, and the market will also overshoot, and the depth of its decline will exceed your expectations. Because there are many people on the market who do not know anything about the market trends and operations, they create the madness and irrationality of the market.

If we have different views (from Soros), we usually do not trade related assets.

Futubull

Trade only the symbol you know best. If you don't, it's like throwing the dice in Las Vegas.

When we want to buy a certain type of trade, but our account has run out of money, we will check the holding position. Any holding positions that perform the weakest and are least attractive to us at that time will be cleared, and then the money obtained from liquidation will be used to buy the desired trade.

In 1968, a large publishing company on Wall Street published an important academic work that explained the reasons behind the shortage of stocks and the reasons why the bull market would last for several years. However, the book was published at the peak of the stock market.

In 1987, you could hear similar arguments everywhere: 'Everyone is buying stocks, so stocks will be scarce and prices will rise.' I assure you that when the bear market comes to an end, there will be such arguments in the market: 'The market funds are tight, and stocks will be in surplus on a large scale.'

So every bull market and bear market will not be the same. (When I was editing this chapter, I happened to read an article in Time magazine (published on August 8, 1988, page 29) about the incredible super bull market in the Japanese stock market. The interview happened to talk about the topic of 'this time will be different'.)

I have never met a very rich trader who uses technical analysis. Of course, people who make money by 'providing technical analysis services' are not included, they can get rich.

I look at technical charts to know what has happened. Technical charts will tell me that this is an out-of-control bull market, and the price increase is like a wild horse. The chart will provide me with facts, that is, the shape of the price trend, but that's it.

In a market that is bottoming out, the time to build the bottom will be very long and may linger at the bottom for a long time. Avoid buying stocks during the period when the market is bottoming out and consolidating, and avoid investing in lifeless depressed markets. You must wait for the 'catalyst' of the market to appear, and then enter the market to establish a position after it changes the market direction and triggers the market.

3. William O’Neil

Do not buy stocks when the price is close to the low point. Only when the stock price breaks away from the wide bottom consolidation area and starts to create a new high relative to the previous bottom area, it is time to buy stocks.

Try to discover and capture the moment when the stock price begins to move significantly (trend movement), so that you will not intervene prematurely when the stock price is in the bottom formation and fluctuating up and down without direction (non-trend movement), so as not to waste 6 or 9 months of time waiting for the stock to rise significantly.

In our communication and discussion meetings, we found that 98% of investors are unwilling to buy stocks that have reached new highs.

3/4 of stocks will follow the main and obvious trend direction of the market average price index.

One way to create a top is that the market average price index hits a new high, but the total trading volume of the market is still low, and it is in a low position.

This tells you that the current demand for stocks in the market is still not strong, and the rise in stock prices at this time is very fragile and not firm. Even if it rebounds after falling, it is just a rebound. When the rebound fails, it is also a good opportunity to sell short.

The second way to build a top is that the total trading volume of the market suddenly increases in a few days, but the increase in the index (calculated by daily closing price) is very small, volume inflated. In the latter way, when the market average price index begins to form a top, the trading volume may no longer accelerate and expand, because the trading volume has been exhausted during the price rise, and the market average price index has no power to continue to rise.

When the market average price index starts to build a top in the latter way, the trading volume may no longer accelerate and expand, because the trading volume has been exhausted during the price rise and the market average price index has no power to continue to rise.

The way to determine the overall trend of the market is to pay attention to the performance of leading stocks in the market. If the leading stocks in the bull market start to rise and fall, this is an important signal that the market has peaked.

Another important factor that needs to be closely monitored is the discount rate of the Federal Reserve. Usually, when the Federal Reserve raises the discount rate two or three times, the market will begin to have problems and may turn from rising to falling.

Do not short a stock just because its price looks high. The key to short selling success is not to short at the top of the stock price, but to short at the right time. Only when the overall market sends a signal of a top can consider shorting individual stocks.

Investors who buy stocks in this consolidation area have all been trapped and lost. Once the stock price rebounds to this area, many trapped investors will be eager to get out of the trap, just to break even. This will cause a large number of long positions to exit the market, and the rebound of the stock price may end up in failure. At the same time, it is also a good opportunity to short sell.

I never let my maximum loss exceed 7% for any stock I buy, even if there is a loss. This is the trading rule I set for myself, never guessing, never hesitating.

You must realize that you can never accurately time the market. So when you sell a stock and the stock price continues to rise, it is ridiculous to blame yourself for it.

A high volume at a key price point is a valuable indicator, indicating that the stock is ready to reach new highs, climb the stairs, and continue to rise.

During a consolidation period, a shrinking volume usually represents the stock price consolidation and lays the foundation for further rise.

The best investment for individuals is mutual funds. The problem is that most people don't know how to invest in mutual funds. The key to successful mutual fund investment is to "buy the fund, leave it aside, wait for profit, and don't think too much." When you buy a fund, you need to hold it for 15 years or longer. Only in this way can you really make big money. But to do this, you need the courage to hold on and withstand three, four or five bear markets in these 15 years. The general investment public may apply the trading method of stocks to fund trading, and use the fund trading method for stock trading.

The trading novice likes to use limit orders to buy and sell stocks, that is, when placing orders, the buy/sell price is fixed at the price they set. They rarely use market orders.

This limit order method is bad because investors will focus on a few cents, the decimal points, etc., and be meticulous, but negligent on the overall trend of the price, thus losing big by being preoccupied with small details.

The biggest illusion that the public has is that the market can be manipulated. They think that there are some groups on Wall Street that can manipulate the price movement on the market.

Paul Tudor Jones

Don't act impulsively in the market, don't play macho in the market.

When trading, I always think about the possibility of losing money, rather than the possibility of making money.

I am now more cautious than ever before, and I am always afraid of trading success, which is so short-lived and fleeting that you must always be cautious and always be on thin ice.

Many people think that to catch the middle part of a price trend movement to make all the money, that is, to "eat the middle part of the fish".

For the past 12 years, I have usually missed the middle part, but I have caught many tops and bottoms, and I have made money and eaten meat with this. If you are a trend following trader, trying to catch the profit in the middle of a price trend movement, the distance between your stop-loss point and your entry price must be far enough so that you will not stop-loss out easily.

I feel uncomfortable with this method of setting stop-loss, which is not my favorite (Jones uses narrow stop-loss). In addition, the market price only shows a trend movement for 15% of the time. For the rest of the time, the market price does not show a trend movement and oscillates back and forth, without obvious directionality.

The biggest misconception that the public has is that the market can be manipulated. They think that there are some groups on Wall Street that can manipulate the price movement on the market.

When trading, I not only use price stop loss, but also use time stop loss. If I think the market price will break through, but the price has not broken through by the time stop loss deadline, even if I lose, I usually close the position.

Why do most traders lose money? That's because they over-trade.

"Over-trading" means that traders must be right many times just to offset the high trading costs.

What are the characteristics of a successful trader?

The most important thing is to adhere to trading discipline.

The second point is that you must hold with patience and firmness.

The third point is that you need to have the courage to enter the trade.

The fourth point is that you must be willing to admit errors and accept losses calmly and stop loss accordingly.

The fifth point is that you need to have a strong desire to win.

I always keep in mind the word 'patience' and patiently wait for the right trading opportunity, just like in playing poker, you have to fold when you get a bad card and give up the previous bet. On the other hand, when the trading odds are extremely high, you should be more proactive and can try leveraged trading, just like when you get a good hand in playing poker, you should add chips (or even go all in).

5. Dr. Van K. Tharp (study of trading psychology)

The general characteristics of failed traders include:

- There is great internal pressure, but no ability to withstand it. There are negative and pessimistic views of life, and always anticipate the worst case scenario.

- There is a serious conflict in personality, and when mistakes are made, others are always blamed.

- There is no set of guidelines to guide their behavior and they are more likely to become followers and members of the masses.

- There is no plan, things are done in a chaotic way, and there is no patience in trading. They always want to trade immediately.

It is very difficult to make money through day trading or short-term trading, no matter who you are, because day trading itself is difficult to succeed.

The two basic rules for successful speculative trading are 'cut losses' and 'let profits run.' However, most people cannot do this. Small losses will evolve into average losses, which are harder for you to bear and harder to cut.

Finally, average losses develop into huge losses, and at this point, you are powerless and have to accept them and stop loss.

When people have profits on paper, they always want to cash in on the profits immediately. They will think like this, 'I'd better cash in my profits before I lose them.' The greater the profit on paper, the greater the temptation to cash in on the profits, and the harder it is for them to resist this temptation.

If your mind is full of worry and your capacity for decision-making in your brain is filled with worrying things, then you cannot make effective decisions.

When people are under pressure, they don't even want to make ordinary decisions. For everything, they want to simplify things and become followers, but following the crowd will inevitably lead to trading losses.

The most typical difference between trading winners and trading losers is reflected in their attitude towards losses. Most trading losers feel anxious about losses, but successful speculators know how to face losses calmly. Victory and defeat are common in the art of war.

The financial market is like nature, it only exposes the problems of participants, but does not solve them.

At the beginning of each trading day, you should review your trading rules, and at the end of the day, you should review your trades. If you followed your trading rules during the day, then even if your trades resulted in losses, you should still praise yourself. If you did not follow your trading rules during the day, you should reflect and review your trading behavior.

The belief of a new recruit when shooting is:

- Firearms are tools of evil that can kill people.

- If you shoot too much with a gun, the shooter's ears may get deaf.

- If you miss the target, it is not the shooter's fault, but the gun's fault. It means that the gun was not aimed at the target.

There are two top shooters, and their beliefs when shooting are:

- It is crucial to shoot accurately to survive on the battlefield.

- Shooting and hunting are fun.

- Psychological rehearsal and preparation are essential for shooting success.

- If I miss the target, it must be related to my operational execution.

The better shooter of these two thinks that hitting the center of the target in each shot is essential (even if it does not bring extra points); while the other believes that it does not matter if you hit the center of the target. Just because of these beliefs, one person's results are always better than the results of the other.

I have dealt with some top traders in my work, and I found that the beliefs they possess are:

- Money is not important (correct trading operations are important).

- Ability to accept trading losses calmly.

- Trading is a game.

- Psychological rehearsal and preparation are crucial to achieving trading success.

- They already have the victory in hand before the trading begins.

"If one exerts oneself to the utmost, one's wish will come true." If you really put yourself into trading, not only can you ensure that you will not deviate from the right path of trading, but also some things that seem to be helpful to you will happen, which seem to be destined. Even huge losses are actually helpful to you.

On the contrary, if you do not put your all into trading, you may say, "I have tried my best, but those things that would have helped me did not happen." Because you do not understand that those seemingly unfavorable things are actually helpful to you and can turn bad luck into good luck.

When some people make mistakes, they will blame the market, blame the on-floor traders or proprietary trading firms, blame insider trading, blame their brokers, or blame their trading systems. We have a natural tendency to shift responsibility and blame others when we make mistakes instead of reflecting and criticizing ourselves.

Our society has played a role in promoting this style. For example, the media has recently reported on programmatic trading, which actually attributes the reason why people lose money in the stock market to the existence of programmatic trading, rather than to the losers' own defects.

However, if you blame others, shirk responsibility, and do not reflect on yourself when making mistakes, you will repeat the mistakes because others are external factors that you cannot control.

When making mistakes, we should promptly summarize the lessons learned from this mistake. Once we encounter similar situations in the future, we can make the right choices and not repeat our mistakes. You must realize that you are responsible for your own achievements and results, and this awareness is crucial for successful investments or trades. Trading winners know that they are accountable for their trading performance, while trading losers believe they don't have to be accountable for their trading performance.

6. Richard Dennis

★When suffering losses with a spreading or unstable effect during a trade, I will completely close my positions and go home to sleep or do something else, freeing up a small amount of time between this bad trade and the next trade decision, and not getting stuck in it.

★Avoid the mentality of making up for losses quickly and do not invest or even double the investment capital in order to recover losses. Once the loss reaches a certain amount, it will affect your subsequent judgment. Therefore, you should take a period of rest time between the loss and the next trade to calm your emotions and restore your calmness.

★You cannot afford to invest in secondary trades. If you do so, by the time the opportunity to make big money arrives, you will be exhausted and your funds will be depleted. Even if you still have money to invest at that time, because of the losses and losses in other trades, the amount of money invested will be relatively small. Good steel must be used on the edge of a sword.

★Even if the trading rules are published in the newspaper, no one will follow them. Almost anyone can list 80% of the trading rules we teach. What people can't do is even if they are in adversity and suffer losses in trading, they still have full confidence and steadfastly execute these trading rules.

★I have a partner, and we have been friends since high school. We have different opinions on everything. One of our debates is that I believe that the skills possessed by successful traders can be condensed and summarized into a set of trading rules, while he believes that the cultivation of successful traders depends on something indescribable, almost mysterious, subjective, or intuitive, and cannot be achieved with just trading rules.

We did an experiment to recruit a group of people and train them to see if successful traders could be trained. We did our best to train the trainees, trying to sort out everything I knew about the market and then teaching it to them. I was surprised at the results of the training. The results of this training were amazing. There were a total of 23 people. We eliminated three poorly performing trainees, and the remaining 20 people had an average annual profit of about 100%.

★When training traders, I have a hypothetical question: assume that everything you know about the market indicates that you should 'go long', and then you tell the floor broker on the phone, but he says to you, 'I'm planning to sell short,' what should you do? If trainees can't ultimately understand that going long is the right thing to do, then they are not suitable for our training program and will not become successful traders.

★From the perspective of a single trade, success or failure is almost entirely dependent on luck, which is actually related to statistics. If you do something with a success rate of 53%, the success rate of a single operation is 53%, but in the long run, if you repeated the same action, the success rate tends to approach 100%.

★In my nearly 20 years in trading, the most valuable experience I have gained is that in trading, things that you cannot anticipate and think are impossible often happen.

★The price movement patterns in different markets are very similar and have commonalities. The stock market should be viewed separately from other markets and is an exception. Compared with the price fluctuations in the commodity and futures markets, the fluctuation of stock prices is closer to randomness. The fundamental information of each stock is not enough to form sufficient and significant trend movements in stock prices, and is not sufficient to make stock price movements get rid of random characteristics.

7. Michael Marcus

★Market will ignore bearish news in a bull market, while the reaction to bullish news will be very strong.

★There will always be trades that meet my standards, but they are rare, so patience is a must.

★Trading is absolutely personal. You must do your homework, analyze and judge independently. If your position is based on 'I hold a certain position because Bruce Kovner also holds it,' then you will not have the courage to hold your position firmly, so you should not hold that position from the beginning.

★It's important to bear in mind that our society will promote bad behavior if we aren't careful. If we don't take action now, it's going to be hard to blame anyone in the future.

Even if he is a talented trader, you still need to stick to your own methods and style. I have many friends who are outstanding traders, so I must remind myself often: if I try to adopt their methods or viewpoints in trading, then I will inevitably suffer losses.

Every trader has their strengths and weaknesses. Some traders are good at holding profits, but will also hold on to losses; while others will quickly realize profits, but will also quickly cut losses.

Stick to your own style and method, success or failure originates from your own method, there will be pros and cons. As long as the used method is in line with the basic principles of trading, and is suitable for your own characteristics, then the benefits will outweigh the disadvantages, and gains will be greater than losses.

But if you try to combine other people's styles and methods, the usual outcome is that you may have all the disadvantages of various methods and styles. Playing to your strengths and avoiding weaknesses is just a good wish, in reality, various methods and styles may not be compatible.

★What are some misconceptions the public has about the trading market? There is a stupid idea, that is, "conspiracy theory", which believes that the market can be artificially manipulated and that there is a conspiracy behind some price fluctuations.

I know many outstanding traders from all over the world, so I can say with certainty: 99% of the time, the market's own strength is greater than any external force of any individual or institution, and the market will eventually go where it should. No one can change the direction formed by market movements. Sometimes there may be exceptions, but these exceptions will not last long.

★If trading is your whole life, then the excitement that comes from it is torture and can be painful.

Successful traders balance their lives and trades, and have other interests outside of trading. If you have no other interests or focus, trading can't sustain you and you can't live your life. Eventually, you will either overtrade because you have nothing else to do or be overwhelmed by short-term failures and anxieties and have trouble sleeping.

8. Bruce Kovner

★The first rule of trading is not to lose a lot of money for no reason. When you feel confused and unclear, then leave the market. If you don't understand, then don't do it.

★Technical analysis is indeed great, and I use it extensively, but unless I understand the reasons behind market price changes, I will not build or hold a position.

★I manage $600 million. If I take $2 million in profits and prepare to invest in coffee futures trading, this is really a trivial and insignificant matter. However, it will actually have a negative impact on me, because I will have to invest time and energy in coffee futures, which will distract me from paying attention to the forex market. That is the core of my trading.

★As long as the trading technology used is correct and excellent, even if the final trading result is a loss, I will not find the process of losing money difficult to accept, nor will I be resentful.

★What I am really looking for is the timing when the market has not reached a consensus and has not yet formed a unified view (ie, when the market trend is unclear). The general rule is that the less attention a place gets, the better trading opportunities there are.

★If you want to make money, you must hold positions with confidence. When you follow others in trading, it is difficult to have confidence in holding positions.

★If you have eight highly positively correlated positions, it is equivalent to trading only one position, but its size will be expanded eight times. It is better to only choose one instead of treating eight as one.

★In the 1970s, you could make money just by using technical analysis, and there were very few "false breakouts" in technical analysis. Now, almost everyone is a chart analysis expert, and there are numerous technical trading systems. These changes have made it increasingly difficult to make money through technical analysis. Various technical trading systems will destroy each other and lead to extinction.

★Trading is a "zero-sum game" where only a few winners take all, and only a few people are destined to become excellent traders.

★Based on my many years of trading experience, "impulsive trading" is the biggest killer and main cause of losing trades for any level of trader. Regardless of the trading method used, once a trading strategy is selected, a trader should adhere to his trading plan and avoid making impulsive trading decisions.

9. Michael Steinhardt

Traders mainly focus on the market price trend, paying attention to whether the entire market or individual stocks rise or fall; investors are more concerned about selecting good listed companies and buying their stocks for investment.

There is a commonly held belief that you should short stocks when their prices have peaked and started to fall, as this is when the problem causing the price drop becomes clear and shorting stocks has high certainty. In a sense, I can understand this view.

Perhaps this method of shorting stocks is extremely safe, and adopting this method allows you to sleep peacefully. However, I never use this method when shorting stocks.

My view is that if you want to make money in the market, you have to take risks and take risks. I always short the stock when the market is widely loved, with numerous institutions showing high enthusiasm, and everyone is flocking to buy the stock.

Technical charts are totally useless to me. The technical charts of stocks are fanciful and unreal. The basic content of technical charts is like this: if the stock price rises a little bit, oh, the real breakthrough happens. Technical charts are full of nonsense and empty talk.

I try to assume that the counterparty in a trade knows and understands at least as much as I do. For example, if I buy shares of Thermo Fisher Scientific at $52 and the stock price suddenly drops to $50, whoever sells the stock of Thermo Fisher Scientific at $52 has a very different opinion from me. I need to find out and understand his point of view.

As the saying goes, "most people are always wrong," so people who stand opposed to the majority (i.e., contrarian traders) must always be right. But real life does not play out like this.

When interest rates first reached 8%, followed by 9% and 10%, many people acted as contrarian traders and kept buying bonds all the way, only to suffer considerable losses as bond yields continued to rise and set new historical highs. There is a very important difference between being a theoretical contrarian trader and actually engaging in contrarian trading.

As a successful contrarian trader, you need to select the right entry point accurately and your position size should be appropriate. If the position is too small, it is meaningless; if the position is too large, you will lose everything if you have a minor deviation in choosing the entry point. Contrarian trading requires courage, resilience, and an understanding of your own psychological tolerance.

Compared to the stock market twenty years ago, there are more savvy traders in today's market, whereas there were fewer savvy traders back then. Institutional traders twenty years ago were usually a group of young kids from Brooklyn, who were inarticulate, low-paid, rash, and impulsive. When I first entered the stock market and started trading, making money was as easy as taking candy from a baby.

In 1967, brokerages often released earnings forecasts for McDonald's that extended as far as the year 2000. Because people then believed that the company could grow in a stable and predictable manner, they could predict the company's long-term earnings, believing in the United States and stable economic growth.

One of the temptations of trading is that sometimes even the most clueless people can trade well and make a lot of money. This is unfortunate, because it gives you the impression that you do not need specialized knowledge and skills, or even a professional spirit, to trade well, which is a huge trap and a misconception.

My important advice to anyone is to recognize that trading is an extremely competitive business, and when you decide to buy or sell stocks, your competitors, your trading counterparties, are doing their best and working just as hard as you.

In many cases, traders are trading against professional traders who, after weighing various factors, are generally not your opponents and will beat you.

The more varieties of products you can trade in, the better your trading situation will be. Whether it is short selling, hedging, the bond market, the futures market, or other types and markets of trading, if it is profitable, the timing is right, and you are capable, you can do it.

10. Ed Seykota

Pride and anticipation, fear, and greed, are all stumbling blocks that can cause you to fall in your trades. When I apply my personal emotions to trading positions, the biggest errors and oversights occur.

Trying to trade during a period of repeated losses is extremely destructive in terms of trading emotions, and being eager to break even will have fatal consequences.

I believe that my success comes from my sincere love for the trading market. I am passionate about trading, not just as a personal hobby or career choice, but because trading is my whole life.

If you genuinely love trading, then keep doing it; if not, you cannot possibly be an outstanding trader.

I do not believe that traders can follow a certain trading rule for a very long time unless the trading rule fully reflects their trading method and trading style. The moment to break the existing trading rules will eventually come.

At that time, traders have to give up or change their original trading rules, or find a new set of trading rules that they can follow.

The similarity of price movement patterns does not vary from market to market. The stock market is completely different from all other markets.

Excellent traders, like outstanding musicians and athletes, have special talents in their respective fields. This trading talent is innate and inseparable. I believe that trading talent is difficult to acquire through effort. Failed traders are almost inactive in "reshaping themselves and becoming successful traders", which is what successful traders will do.

Our innate, truly strong inner desire is a blessing from heaven. The means and methods needed to satisfy this desire will also be given to us by heaven. I believe that success or failure is related to whether you can find and follow your inner call (that is, whether you can do what you really love), not whether you can obtain wealth.

11, Larry Hite

Humans cannot change, and human nature remains the same throughout history. This is why the trading game can always continue. In 1637, Dutch tulips plummeted from 5,500 guilders to 50 guilders, a drop of 99%.

Maybe you will say: "Trading now is different from then, it has been completely rejuvenated, and the people at that time were primitive and ignorant, and capitalism was still in its infancy. Today we are very mature and rational."

Well, please look at the stock market crash in 1929. The stock price of Air Reduction Company fell from 233 dollars to 31 dollars, a drop of 87%.

Maybe you will say again: "The prosperous 1920s were a crazy era, but everything is completely different now." Then move forward to 1961, there is a company called Texas Instruments, whose stock price fell from 207 US dollars to eventually fall to 49 US dollars, a drop of up to 77%.

If you think we have forgotten the mature and rational 1980s, then what you must do is to look at the trend of silver prices in the 1980s. The price of silver fell from the peak of 50 US dollars to eventually fall to 5 US dollars, a drop of 90%.

Ps: There are also the 2000 Internet bubble, the 2008 subprime crisis, and the 2023 Gamestop.

Your trading frequency must be sufficient, and the number of bets must be sufficient (that is, the statistical sample must be large enough), so as long as the expected value of the transaction is positive, you can eventually make a profit. The insurance industry is a good analogy.

You absolutely cannot predict the survival rate of a 60-year-old person after one year. However, if you face 100,000 60-year-olds, you can make a good estimate of how many will still be alive after one year.

I have a friend who went bankrupt because of trading futures. He couldn't understand my strict adherence to mechanical trading systems. One day when we were playing tennis together, he asked me: "Larry, don't you think trading in that way (that is, following the trading system) is boring?" I told him: "I am not trading for excitement or stimulation. I am trading to make money and profit." Sounds a bit vulgar, but it is a precious saying.

Money used for living expenses can never be invested in trading. From the perspective of trading, you can lose all your trades at most, but it will not affect your daily life, and the situation will not get worse.

The risks taken during trading are by no means child's play, and they cannot be taken lightly, and mistakes cannot be made easily.

Not only have I personally suffered trauma in trading due to underestimating risks, but I have also witnessed other people I know in the entire trading career who have suffered heavy losses due to not fearing "risks". If you do not perform risk management, the risk will eventually make you suffer.

12, David Ryan

By analyzing hundreds of super bull stocks, we found that in many cases, many bull stocks' earnings per share are really well-known, and their stock prices may have reacted, but their stock prices will continue to rise for a period of time (even for a long time, as long as their earnings per share can maintain good performance and continuous growth), and they will not immediately "die".

When the entire market is weak and bearish, even if a stock's EPS is good, its stock price will be dragged down by the market and cannot rise. It will remain flat or even fall. However, when the stock market turns bullish and has strong momentum, the pressure from the market on individual stocks to rise will gradually dissipate. These stocks with good EPS will rise sharply and set new highs. Product structure, 10-30 billion yuan products operating income of 401/1288/60 million yuan respectively.

The doubling of a stock's price indicates that something unusual has happened behind the stock. If it is a positive development, the doubling of the stock price is only the beginning of the upward momentum, and the stock price may continue to double.

When the stock price is unable to break through the consolidation platform and instead breaks through the downside, it is time for me to sell all the shares.

If the trading volume is significantly multiplied when the stock price reaches a new high, it indicates that many people are interested in the stock and are buying it. A breakout with volume often does not result in a price pullback, and the price will not fluctuate back and forth. This type of breakthrough to a new high is effective.

Selling short a stock is three times more difficult than buying long. Orin once said that in nine bear markets he has experienced, he has significantly profited only from short selling twice. He believes that in a bear market, all you can do is stand aside and watch, hold onto your cash.

If the leader stocks of a bull market, the leading stocks, begin to fall, the signal that a bear market is taking shape.

13. Tony Saliba.

You must be able to say, "My trading method is effective and applicable for this type of market, but the market we are in now is not this type of market."

14. Tom Baldwin.

Q: What is the percentage of people who survive five years of intraday trading without losing all of their capital or leaving in disappointment?

A: No more than 20%, maybe I'm overstating it.

Q: What is the percentage of people who can earn at least a few million dollars through trading and always have it?

A: 1%.

In this line of work, you must completely disregard money and not attach too much importance to it. Putting too much emphasis on money can lead to trading errors. You cannot trade for the sake of money.

You can't turn profit and loss figures into tangible objects. "I lost $1 million in this trade, enough to buy a big house."

Q: Trader X is a great trader who has been successful and lucky. What would you do when you want to short a stock, but he is going long?

A: I would hesitate, pause, and might even give up shorting.

If you earn a lot of money, you will quickly start to think highly of yourself and believe that you will never make mistakes. Once you think "I will be the best in the world," you will suffer a setback.

A non-traditional, unusual stop-loss method: Do not stop-loss too quickly or too rashly. Instead, patiently wait for a good chance to exit and select the right timing to leave.

When the market price moves sharply and quickly in the opposite direction of your position, it is usually the worst time to exit the market, not the best time to stop loss.

At this time, do not be in a hurry to leave. To endure the pain caused by the book loss on the account. As long as you endure and wait a little, you can find a more advantageous position to close it out.

15. Martin Shuhart.

★I work nearly 12 hours every day. I feel uncomfortable if I don't work. My trading attitude is to always be better and more prepared than my competitors.

★If the market falls after good news, it indicates that the market is very fragile and the situation is not good. When bad news comes out, the market rises instead of falling, indicating that the market is very strong and the situation is good.

★Some people say, 'I have never seen a wealthy trader who uses technical analysis.' I always think these people are very funny. I like these people's views on technical analysis! Their views on technical analysis are so arrogant, ridiculous and foolish.

★Whenever I'm in difficult times or moments of crisis, I always try to defend, defend, and defend. To keep your earned money, you must maintain your wealth. Do not risk your entire fortune, the venture cannot endanger the safety of your property at home. During that time, I didn't need to make more money. I wanted to keep my earned money and then make money steadily.

★In most industries, most people are busy covering up their mistakes. But as a trader, you have to face your mistakes, and you can't cover them up. Because the numbers in your trading performance won't lie, all your trading mistakes will be reflected in them.

★If the stock has not reached a new low while the broader market has, it means that the stock is much stronger than the broader market and its trend is better than that of the broader market.

★After a successful trade, I will rest for a day to reward and reward myself. During a certain period, I found it difficult to maintain continuous trading victories for more than two weeks.

There was a time when I was able to make consecutive profitable trades for 12 days, but eventually I became exhausted and tired of trading. Therefore, after a round of significant gains, I will try to reduce the size of the trades rather than 'adding positions after winning.' In my trades, I will surely encounter significant losses after earning significant gains.

★When the thing you fear most does not happen, you may want to add positions instead of liquidating or reducing positions. Because this market trend has hidden meaning, there is a hidden force in the market, and the directional establishment of this force is consistent with the directional establishment of this position.

★I always stop losses quickly. Quick stop loss may be the key to my trading success. You will always have the opportunity to make up for the losses caused by the stop loss, but if you want to exit the market after getting back to breakeven, your ideas about trading will be different, and you may even add positions or hold onto them after losing, which is a mistake.

After the stop loss, the market trend will be very clear. Because when you hold a losing position, the pressure you feel will make you feel mentally stressed, so you cannot see the market trend clearly at this time.

★A failed trader will say, 'I will liquidate the position as soon as it returns to break even.' Why is getting back to breakeven so important to them? Because breaking even does not count as making mistakes, they can defend their self-esteem and save face. 'Let pride go to hell, making money is the most important thing,' and I can say this when I become a successful trader.

16. Conclusion.

It has been 35 years since 'Market Wizards' was published. Are these people in the book still successful now?

If they are still successful, it indicates that what they said is probably right, and their methods are sustainable and really worth learning. It also shows that Jack D. Schwager has a strong ability to select interviewees, and has a certain ability to select and manage people.

Editor / jayden