1. Unwilling to stop loss:
There are many articles related
to this issue. Some retail investors see that the stock price rises again a few
days after stopping loss, so they are lucky and do not stop loss next time.
This is not acceptable. As far as I am concerned, I will never allow a loss of
more than 5%. "Cut losses and let profits run" is indeed a wise
saying. But then again, if you don't have your own profit model, your end
result is to buy, stop loss, buy again and stop loss.
2. Don’t dare to chase the leading stocks :
When a stock
starts to rise, we don’t know whether it is the leading stock. By the time
everyone knows it is the leading stock, it has already risen to a certain
extent. At this time, retail investors often dare not follow up, but buy a
follower stock with a small increase, thinking that they can make steady profits.
Unexpectedly, this follower stock rises slowly when it rises, but leads the
decline when it falls. As a result, after a long time, nothing is gained. In
fact, when the stock is strong, the stronger the rise, the more followers there
are and the easier it is to rise. After reaching the peak, there will be a
considerable period of sideways trading, giving you enough time to exit. Of
course, if the increase is too large, you naturally cannot rush into the
market.
3. Investing in stocks based on news :
Too many stock
investors invest in stocks based on news or information found online. When you
see the news, other retail investors also see it. Everyone rushes in to buy,
and the result is that the institutions just happen to sell to everyone. So
often, you get trapped after buying, and you don’t even bother to find out who
released the news. This is the legendary good news turns out to be bad news!
4. Trading frequency remains high:
Although most people are
risk-averse, retail investors in A-shares are unknowingly exposing themselves
to huge risks. Among the interviewed investors, the frequency of trading is
very high, with an average of 6.3 times per month last year. It is well known
that among global stock markets , the turnover rate of A-shares is among the
top few.
5. Never look at the technical aspects and operate blindly:
No matter how good the stock
is, it will fall if the pattern is bad; no matter how bad the stock is, it can
rise if the pattern is good. This situation often makes many investors depressed,
and they often encounter such questions: When I choose stocks, I always choose
stocks with good fundamentals, why do they still fall so badly? Good
fundamentals must also be combined with comprehensive analysis of the market
and the pattern of the stock. It does not mean that if the fundamentals are
good, the stock will rise after buying it. The quality of the pattern is also
crucial.
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