Source: Red and Green As centralized investors, our goal is to have a greater understanding of our companies than any Wall Street investor. If we are willing to work hard and learn as much as possible about our companies, we are likely to know more than general investors, which is all we need to gain a competitive advantage. On the product structure side, the operating income of products worth 10-30 billion yuan is 401/1288/60 million yuan, respectively, in 2023, the overall sales volume of the company reached 18,000 kiloliters, a year-on-year increase of 28.10%, showing significant growth.

The role of human nature in investment cannot be ignored.

Many investors believe that reading a few investment books and learning some financial knowledge, as well as understanding K-lines, moving averages, and some indicators, means they have mastered investment techniques and are ready to confidently make money in the investment market. To my knowledge, there are currently no top global investors who have achieved great success solely through technical analysis! Even the founder of technical analysis, John Murphy, is probably only teaching technology, without discussing the role of human nature in the investment market. The highest flying eagle relies not only on its wings, but also on its faith.

Technical analysis is a means, and it's only a necessary condition for successful investment, not a sufficient one. Paying too much attention to pursuing techniques may instead overlook some aspects of the "way." How to survive in the tumultuous waves of speculation, how to understand the advantages and disadvantages of investors, how to plan investment strategies rationally, how to judge the trend accurately, and how to operate appropriately, we must explore these on the basis of technical analysis, capital management, and the human nature fitting of financial speculation.

Technical analysis and fundamental analysis are not essential issues. The correct investment concept, as well as the investor's psychological qualities, knowledge structure, life attitude, mindset, courage, and breadth, are the keys to investment success. Analyzing the market is secondary, and analyzing and understanding oneself is primary. Without understanding philosophy, methodology, and the ability to think dialectically to analyze the market, in the investment process, blind subjective judgments of the market are inevitable, even if you know technical analysis, what will be the result? Blind subjectivity is often the beginning of danger, and only by understanding oneself in the market and experiencing the market, can one win a hundred battles without peril. Single-mindedly using technical analysis cannot feel the market and will lead to constant loss in the trading.

Although the competition for funds determines the direction of the market, we must understand how prices are formed. Prices are the result of the collective behavior of all market participants, that is, the result of human behavior. Therefore, human nature is bound to be fully manifested in the process of price formation. In trading, we must be "mindful of seeing the truth" so we can succeed faster.

Napoleon compared the qualities of an excellent commander to a square. The bottom of this square refers to the spiritual factors of the commander, such as bravery, perseverance, decisiveness, etc. The height refers to the commander's wisdom, including strategy and insight. He particularly emphasized that in the commander's spiritual world, wisdom and courage must develop in equal proportions in order to cope with the situation on the battlefield.

Our Chinese nation is an intelligent nation that excels in thinking and planning. Traditional Chinese culture has long pointed out that wisdom is the source of production strategy, and strategy is the method of applying wisdom. Without wisdom, we cannot talk about strategy, and without strategy, we cannot solve practical problems. When the strategy reaches the point of being out of one's mind, wisdom will also be fully utilized.

Only by applying investment strategies combined with psychological factors can we place our holdings in our heart, not fearing market downturns every time we buy a long position or be afraid of bullish sentiment every time we short sell. Market fluctuations have been carefully considered before we place an order. Placing the order is a reflection of deep thought and is not something to be feared after a position has been taken. The victorious soldier wins first and then goes to battle, while the defeated soldier goes to battle first and then seeks victory. Market fluctuations do not change due to our fear after placing a trade. So why should we not face it with a frank and open attitude? Stop loss at the stop loss point, and take profit at the take profit point. In addition to this, we should observe the market's movements as if we had no positions, develop fully strategic conditions for the next investment attack with a calm mentality.

In the twists and turns of the market, we must fight like generals who are able and experienced. To achieve investment victory, we need to know how to formulate operational guidelines, marching direction, and war strategies. We must also understand how to deploy troops, attack and defend, and adjust our strategies accordingly. Only in this way, can we win battles with courage and competence. Without courage, we die in battle, without strategy, we are lost.

On the battlefield of investment, how to rely on the observation of trends to formulate investment strategies, how to attack and defend with sufficient grounds, and how to win the investment battle. Not only do we need timing, favorable geographical position, unity and coordination of forces, but also a good use of strategy. Each investment decision should be based on learning from others' successful and failed experiences, combined with one's own practical experience. Only after experiencing trial and error will we have the courage to make decisions. Otherwise, we cannot fully grasp opportunities and cannot achieve success against all odds. In theory, this violates the principle of gambling less to win more.

In summary, philosophy, psychology, and the human nature fitting of investment are all critical components to be considered in the investment process.

Investors need to constantly participate in the market, experience the environment on the battlefield, and summarize certain experiences in order to grow from a rookie to a qualified soldier. Then, after countless small and large battles, gradually rise to the level of squad leader, platoon leader, company commander, battalion commander, regimental commander, and even a higher level commander. The basic requirements for soldiers include being proficient in applying individual combat tactics, resolutely obeying orders, and demonstrating bravery and tenacity in battle. The level of company commander is limited to the application and execution of tactics.

When promoted to the regimental commander level, the commander already has considerable combat experience. They lead a moderate-sized team and understand that they are an important part of a battle, and must consider the overall situation of the whole battle. In the investment market, they operate with funds ranging from several million to tens of millions of dollars, and can apply their trading system effectively after years of real-world testing. They can make decisions on-the-fly and can accurately judge market fluctuations. They understand that investment is a special industry and the logic for success is different from other industries. They think differently than most investors and know that guiding trades with ideology and thinking is the fundamental path to success. After years of battles, they have strong psychological endurance and have progressed in their character, mindset, courage, and resolution.

They consider how to allocate funds among different categories, how to find opportunities in the long and short-term, how to build excellent investment teams, divide work effectively among the team members, and how to plan and implement medium-sized investment campaigns that would have a considerable chance of success. It is rare for an investor to reach this level. Most of these investors will remain at this level because it is difficult for them to break through development bottlenecks. When they are promoted to the level of a group army commander, they have to consider matters from a strategic perspective. They may need to dispatch intelligence agents to understand the market situation two years before the start of a war. They think about situations on both sides of the conflict, and how to defend their own nation's culture, folk customs, and the international economic environment. They direct multi-armed and multidimensional attack and defense systems. They already command wars outside the battlefield, and the main issue is the appointment of long-term command personnel and the coordination of all armed forces. For example, Soros successfully attacked the Bank of England, created the Thai economic crisis, and created the 1997 Hong Kong economic crisis through the use of multi-pronged attack strategies. He used the correlation between three or more financial tools to engage in financial speculation. He prepared for a long time and had a substantial grasp of all factors involved. In May 1997, Quantum Fund and Western Impulse Fund simultaneously attacked on forex, stocks, and stock index futures in Thailand.

They consider how to distribute funds among different categories, how to find opportunities in the long and short-term, how to build excellent investment teams and divide work effectively among the team members, and how to plan and implement medium-sized investment campaigns that would have a considerable chance of success. Most investors cannot achieve this level because they cannot withstand the unique environment and baptism of the trading floors. Even if they miraculously survive the first battle, they are destined to dwindle in subsequent battles, and in the end, most of them die heroically, while a small number of investors choose to leave the market as deserters, without hope for the future. Some of those investors may turn into troops of various kinds, doing investment while working other jobs as well. Only a few survivors have the sensitivity, determination, and the ability to think and analyze independently to reach the level of a company commander. They have only one belief in their hearts: that no matter what happens, they will fight to the end as long as life remains. Although they are scarred, they can still fight and persist. Meanwhile, they have summed up the survival rules of the trading floor and strictly abide by them. On the battlefield of investments, even the slightest change can create a feeling of intuition that leads them to initiate an attack or a quick withdrawal. They quickly make plans for opening positions and respond to losses quickly.

When promoted to the level of a group army commander, one has to think from a strategic perspective. Possibly, two years before the start of the war, intelligence officers will be sent in to understand the market. They consider the situation of both sides of the conflict, the topography and social customs of the home country, the major international economic environment, the opponents' foreign exchange reserves, monetary policies, and foreign affairs policies. They command multi-armed and multidimensional attack and defense systems. They have already commanded wars outside the battlefield, and the main issue is the appointment of long-term command personnel and the coordination of all armed forces.

For example, Soros successfully attacked the Bank of England, created the Thai economic crisis, and created the 97 Hong Kong economic crisis through the use of multi-pronged attack strategies. He used the correlation between three or more financial tools to engage in financial speculation. He prepared for a long time and had a considerable grasp of all factors involved. Quantum Fund, together with the Western Impulse Fund, launched simultaneous attacks on three fronts: forex, stocks, and stock index futures in Thailand in May 1997.

The Bank of Thailand devoted all its efforts to defend against Soros's attack, launching a financial counteroffensive. In the end, it lost 32 billion in forex reserves. Although Soros took advantage of the preexisting chaos when attacking the Bank of England, when he targeted the Thai economy, he created a global financial crisis. These battles exceeded the scope of simple technical analysis.

One soldier makes a name for a million bones. Reaching the level of a group army commander is a rare achievement. Not every investor can keep ascending while climbing the ranks. Most rookies cannot withstand the special environment and baptism of the trading floors. Even if they miraculously survive the first battle, they are likely to dwindle in subsequent battles, and eventually, most of them die heroically, while a small number choose to leave the market as deserters, without any hope for the future. They may become mercenaries while doing other jobs or invest casually. Finally the survivors are the very few with sensitive intuition, determined willpower, and independent thinking and analytical abilities. They exist as company commanders. They only have one belief: they will fight to the end as long as they breathe. They are still fighting and persevering despite their injuries. They have summed up the survival rules of the trading floors and strictly abide by them. They can detect even the slightest changes on the battlefield of investments, and respond to them immediately. They think differently than most investors because they have acquired extensive military capabilities in other fields.

The remaining few are reflective, determined, independent, and have the ability to think and analyze independently, which allows them to rise to the level of squadron commanders. Only using the determination that no injuries can send them away from the battlefield of investment, where they must fight until the last moment, and being able to survive in these harsh financial storms, are all testaments to the capital that they have accumulated. In the investment market, not only are idealism, enthusiasm, and devotion to the profession necessary, but also wisdom, strategy, and insight.

Veterans can judge the position of enemy fire depending on the terrain. When they do not encounter resistance at a place where they should have been attacked, it illustrates that the opponent is well prepared or has a greater scheme. Waiting for them may be a trap, and the opponents' possible ambushes must be taken into consideration at important resistance levels, support levels, golden segmentation levels, and important moving average positions, which can be encountered at any moment.

Experiencing numerous injuries is distressing, but for someone who is preparing for success, this is a form of capital, and it is better to have it earlier than later. Investment requires ideals, enthusiasm, dedication, wisdom, strategy, and insight.

3. Build Execution Capabilities in Investment Practice.

Some people suffer a lot of setbacks in live trading. They have great hopes of achieving their desire for short-term wealth through training to make up for their previous losses. Such hopes will not become reality. Even a very successful investor cannot win every battle, but follows an investment plan, adheres to a set of concepts and methods. They are able to maintain discipline, overcome fear and greed, and have full control of risk and return.

A good set of concepts and methods can be learned in three days, but they are easy to learn and difficult to master. Because human nature cannot be changed in three days! A good method requires accumulated experience to be verified over time. One minute on stage, three years off stage. Wang Xizhi can write an extraordinary calligraphy in three minutes, but that is only after many years of practice and the essence of eighteen ink pots. Training can only enrich investors' thinking in theory and methods, enhance their understanding of the market, shorten their success time, and help them avoid unnecessary losses under the guidance of the correct method.

Investment is an art that connects theory with practice. The key is to receive training, learn the correct methods, and constantly train oneself through live trading to improve one's trading skills and reflective abilities. A journey of a thousand miles begins with a single step. The key to learning investment is not the distance to the goal, but how much one is willing to learn every day. Even if you operate for only one hour a day, and then think carefully, you will have a deep understanding of the market after a year.

A good method is verified by time and summarized from practical experience. The idea of getting rich quick through training, or of becoming a group army commander just by graduating from a military academy (I mean the earliest Huangpu Military Academy, not the current military academies), is equally laughable. The students who graduated from military academies start as second lieutenants or platoon leaders. They improve their combat skills through war and then advance through their achievements. In the most critical moments of the war, those who make the greatest contribution may be promoted three times in a row and become a major or battalion commander. At this time, the troops they lead are given special attention. Whenever there is a tough opponent, the leader thinks of them first.

Investors who have undergone training can reach the level of staff officer. Although they can help the leader participate in the deployment of the war, they cannot independently lead the troops into battle because they lack practical training. Although their military rank is lieutenant or major, they need to serve as a deputy in a department of the same military rank before they can lead troops. After gaining experience and achieving results, they can be promoted to a regular position and make real decisions.

Graduates of higher education finance and investment programs have an abundant theoretical foundation, but they still lack practical skills. They need to find a large investment institution to train with, starting as a staff officer and writing market analysis reports. There are two ways to advance: one is to do your job well and then be promoted to the level of chief of staff to become a professional analyst; the other is to gradually rise to the position of senior leader with the help of the team leader after practical training. The first path is easier, while the second is equally challenging.

In the investment market, success depends on following trends and promoting their development or transformation to achieve victory. Those who follow trends prosper, while those who go against the trend perish. In the trading process, investors should trade with the trend. When investing with the trend, money will flow into your pocket continuously. When trading against the trend, no matter how smart or hard-working the investor is, the result will be fewer wins and more losses. Wise men have a thousand plans and one of them will surely fail, while fools have a thousand plans and one of them will surely succeed. Although the market changes, the rule of following trends remains the same. It just requires different timeframes to apply the unchanging rule to the changing market. Under the influence of trend trading, with a clear mind, sufficient capital, risk management, discipline, and the courage to cut losses, investors can resist the temptation to take profit and achieve success, but they still cannot become big investors.

There are two ways to rise to the position of high-level leader with the help of the team leader after practical training. The first way is to do things excellently and then be promoted to the level of chief of staff to become a professional analyst. The second way is equally challenging. The key difference between staff and decision-makers is that staff tells, but decision-makers do. The speaker does not have to bear any risks, while the doer has to assume risks. Therefore, it is more difficult to become a decision-maker. Cao Cao had over a hundred strategists, but he was the only decision-maker. To learn how to analyze correctly, increase their courage, and use various investment strategies in the investment market are just the first steps.

The high risk in the market expands fear to the extreme, so successful traders need to go beyond the ordinary from a psychological perspective. Character determines the fate of investors, and their investment success or failure ultimately depends on their character. When everyone is greedy, we are fearful. When everyone is fearful, we are greedy. The truth in the investment market is always controlled by a minority of people. But because of a lack of self-confidence, knowing that we are taking the path contrary to the majority, doing the right thing, but ultimately being affected by the herd mentality. Therefore, the main factors for investment success or failure depend on a person's life philosophy, attitude, mentality, cultivation, and depth, which are ultimately transformed into executive power.

In the investment market, capital preservation is more important than value-added. It is just like in war, where the survival rule is to protect oneself first and then defeat the enemy. If you fail to protect yourself, you will violate the survival rule of war. In the capital market, money is king. Whenever investors doubt the market, they should convert to cash.

Capital is the lifeblood of investors. The use of capital management and skills directly affects the survival state of investors. Anything can happen in the investment market, so we cannot be reckless. Being cautious does not mean being timid, but it is a tactical display. In any situation, preserving strength increases the probability of success. Losing capital means losing the right to survive in the market. Success is not only about luck and intelligence, but it also requires correct thinking. Knowing when to attack and when to defend, and doing the appropriate things at the appropriate time are crucial.

Investment, like other things, has its own inherent rules, which is to learn how to follow trends. Promote its development or transformation to win. Those who follow trends prosper, while those who go against the trend perish. In the trading process, investors should trade with the trend. When investing with the trend, money will flow into your pocket continuously. When trading against the trend, no matter how smart or hard-working the investor is, the result will be fewer wins and more losses. Wise men have a thousand plans and one of them will surely fail, while fools have a thousand plans and one of them will surely succeed. Although the market changes, the rule of following trends remains the same. It just requires different timeframes to apply the unchanging rule to the changing market. Under the influence of trend trading, with a clear mind, sufficient capital, risk management, discipline, and the courage to cut losses, investors can resist the temptation to take profit and achieve success, but they still cannot become big investors.

The key to success in the investment market is to learn how to follow trends and promote their development or transformation to achieve victory. Those who follow trends prosper, while those who go against the trend perish. In the trading process, investors should trade with the trend. When investing with the trend, money will flow into your pocket continuously. When trading against the trend, no matter how smart or hard-working the investor is, the result will be fewer wins and more losses. Wise men have a thousand plans and one of them will surely fail, while fools have a thousand plans and one of them will surely succeed. Although the market changes, the rule of following trends remains the same. It just requires different timeframes to apply the unchanging rule to the changing market. Under the influence of trend trading, with a clear mind, sufficient capital, risk management, discipline, and the courage to cut losses, investors can resist the temptation to take profit and achieve success, but they still cannot become big investors.

There are many people in the world who know how to succeed in the investment market, but they cannot achieve it. The inability to act and explain themselves clearly indicates that they do not really want to succeed. The reasons that hinder our success include investors who do not delve into the various factors of a commodity and blindly operate, or those who are too fond of short-term trading, only making a little money frequently and calling it "guerrilla warfare". In fact, short-term trading cannot achieve too much investment income, sometimes even ten consecutive wins.

Indeed, the heart is very proud. However, inadvertently, one loss will return the hard-earned money of ten gains to the market. Frequent transactions have not been carefully considered, greatly increasing the probability of error. There are transaction costs for each transaction. Finally, the "guerrilla war" becomes a "war of attrition". The "guerrilla war" is only suitable for a few people who are born with nature and have been specially trained because their accuracy is over 80%. However, natural investors are rare among people. Most investors should not rely on this investment strategy.

From the perspective of winning through capital management, when we make a profit, the position that gains should be large, and when we lose, the position should be small. Or we can win by relying on the amplitude of trend trading. The problem lies in the size of the position. For our medium- and long-term or band trading, we can first test and establish a position. If the trend of the market is the same as the direction of our position, we can hold it for a longer time, thus having the opportunity to add more. Although it is said that when we make a profit, we should have a larger position, how can we do this in short-term trading? When the market trend is different from the direction of our operation, we should immediately abandon the position and minimize the loss. When we make a profit, we should win a lot, and when we lose, we should lose a little. The best strategy for futures investment is to earn the maximum profit with the minimum risk.

Another factor that hinders investors from succeeding is that most investors are afraid of losing while wanting to win. Under such a psychological condition, their mind follows the trend of the market, and they often make stupid moves. Only those who are not afraid of death are qualified to live on the battlefield. The investment market is a process of alternating joy and sorrow. It's best not to get too happy when you gain, or too sad when you lose. The more fearful you are of losing in investments, the more likely you are to lose. Character flaws become the fuse of the investment market. Loss is an inseparable part of investment life and the cost of transactions. All businesses have investments and costs.

In the market, there needs to be some adventurous spirit. If you don't have the adventurous spirit of a general, you won't have the courage to get out of failure. As long as you are mentally prepared to bear a 10% loss, you can invest with peace of mind, and investment will no longer be so frightening. Instead, you can find the joy of success. Those who do not really understand the market risks do not completely know the joy of using the market.

In actual investment, we need to learn to judge the market. We should think about problems with dialectical thinking and analyze the market from the different perspectives of bulls, bears and retail investors. We must distinguish between trading opportunities and non-trading opportunities, and recognize opportunities for low-risk and high-yield returns. We must patiently wait for our own trading opportunities. There is only timing in investment, no right or wrong. When the situation is not in our favor, we must bear it, but when we encounter low-risk and high-yield trading opportunities, we must be tough!

The "Wu Qi's Art of War" proposes the governance philosophy of "equal importance to civil and military affairs". It emphasizes the cultivation of moral character, the external treatment of military preparations, and requires general officers to "manage civil and military affairs and be both firm and gentle". There are five precautionary measures to understand the military situation, geography, lay of the land, and respective strengths and weaknesses of both parties in the war. It advocates to "judge the enemy's strengths, avoid his weaknesses and attack his weak points". In investment, we should take corresponding measures according to the situation of the market. We should think about the problem dialectically, and analyze the market from the different perspectives of bulls, bears and retail investors.

We should distinguish between trading opportunities and non-trading opportunities and recognize opportunities for low-risk and high-yield returns. We should patiently wait for our own trading opportunities. There are transaction costs for each transaction. The best investment opportunities often arise when others are panicking. We should be contrarian and take moderate risks when buying in the market. Every investor has their own trading system, which should be compatible with their own personality, capital and trading style. In addition, clear thinking, rational analysis and appropriate operations are essential for successful investment.

From an investment perspective, it is more important to preserve capital than to increase it.

Investors who have not succeeded in the investment market after three years must have failed in their thinking. If you want to upgrade from a retail investor to a big investor, your thinking and character are the main factors that determine success or failure. People who have the characteristics of super-rich investors are like lions and tigers. They understand what the major trend is, follow the trend closely, and know how to use the trend to make money. One must have the patience to endure loneliness and understand when to rest. Big opportunities do not come every day. Only those who know when to rest can seize big opportunities and are wise. The concept is the foundation, the technology is the standard, the execution is the key, the analysis must be reasonable, and the operation must be appropriate to achieve success!

The entire process of successful investment is a process of accumulating experience and changing one's outlook on life. However, only by changing one's personality and ensuring the execution of technology and methods can one change one's fate. The first thing is to cultivate the heart, then learn the technology, and then success will come. A wise person understands everything.

I hope that through my experience, I can help investors understand the most important part of investing, open up their minds and hearts, inspire them, and give them challenges and changes. Become a more outstanding person than ordinary people in the investment market.

Editor/Lambor