The purpose of our investment transactions is to increase the value of assets, or to make money. But in the actual investment, it turns out that investment is not as simple as we imagined. Often after investing and trading for a period of time, we will fall into fear, anxiety, greed and other human weaknesses, and do not know how to get out of the fog? I think it has something to do with the fact that we don't know the truth about investment trading, and when you understand the truth about investment trading, you should feel empowered.
Fact 1: The essence of investment trading is risk management or probability management
Investment trading is faced with uncertainty, and how we should act in the face of a series of uncertainties. There is still a difference between investing and guessing the heads and tails of a coin, guessing the heads and tails of a coin is a one-time thing, but investment is a continuous process, and there is a concept of time in it. There are many factors that will affect your expected time, and it is uncertain what it will look like in the end. We must recognize this essence in our hearts, and when we accept it, we will unconditionally set a stop-loss order for any operation to ensure that the risk is controllable, so as to maximize the preservation of the principal. Warren Buffett has repeatedly emphasized that this is the reason for keeping the principal.
Fact 2: The vast majority of profits come from a very small number of investment trades
This truth actually evolved from Truth 1, investment trading is risk management, then investment is a series of trial and error process. In most cases, the market may not be big, and when the big is coming, and we try it right, we will make additional investments to amplify the investment returns. This is what we often call the profit-loss ratio.
Fact 3: Investing in trading is a process of managing your emotions
What does it mean that investing and trading is a process of managing your emotions? Because in the face of investment transactions, our emotions will appear conceit, fear, greed, hesitation, anxiety, etc., how we manage our emotions is very important, because any emotion will affect our objective operations. This is.
I have summarized the three truths based on my own experience, if you think there are other truths, you are welcome to leave a message in the comment area to discuss. **10,000 Fans Incentive Plan