Hexun Investment Advisor Wu Gangwei: When losing money in stock trading! Retail investors, remember these 8 phrases!

When losing money in stocks, it’s helpful to silently repeat these eight phrases. Persist for 10 days, twice a day—once before the market opens and once before bed—you’ll gradually understand that stock trading is actually as simple as drinking water. Especially for friends with accounts only in the tens of thousands or hundreds of thousands, it’s even more crucial to grasp these words. They are the foundation for achieving stable profits, with no fancy tactics—just straightforward, practical experience. If you truly understand them, doubling your investment in a year is not difficult. Opportunities come by chance; today, I share this with everyone.

We often face repeated losses in stock trading, feeling confused and at a loss, unsure how to comprehend the core principles of trading. These eight phrases are the key:

First, redefine bottom-fishing. True bottom-fishing is definitely not buying after a stock has fallen sideways; that’s actually taking over the position! Remember, stocks that rise significantly with minimal pullback tend to rise even more; those that fall heavily and rebound weakly will only fall deeper. Always respect the trend and trade in the direction of the market.

Second, don’t shoot the eagle before seeing the rabbit. Don’t sell before a high surge, don’t buy before a plunge; if the trend is unclear, stay calm and rest. The biggest mistake retail investors make is itching to trade—entering during sideways, choppy periods, only to get hit from all sides. The only way to cure this itch is to stay out of the market—holding cash is not missing out; it’s protecting your life. Be patient like a crocodile, waiting for a confirmed opportunity, striking accurately.

Third, operate against human nature: buy green, not red; buy red, not green. This sounds awkward but is the core of profitability. The A-share market is a game of wolves and meat—if you want to make money, you must go against the majority of retail investors. When you see a big red day, don’t chase impulsively; when you see a green day with a big drop, don’t panic and sell. Use market sentiment differences to harvest profits.

Fourth, identify strong stocks by looking at red and green: red fat, green thin. Red fat means strong upward momentum: large, solid bullish candles; during declines, fewer and shallower bearish candles. For example, three large bullish candles with only a small bearish candle in between indicate dominant control by the main players, suggesting the bulls are crushing the bears, and new highs are highly probable.

Fifth, stock selection has a threshold: only consider stocks that have hit the daily limit within the past 20 days. Why set this rule? Because hitting the limit reflects the strength of capital intent. Retail investors lack the ability to lock the limit; only the main players with real funds can push stocks to the limit. These stocks are either in a strong upward trend or after a shakeout, ready for a second wave. Stocks that have been languishing at the bottom with continuous declines are abandoned by funds—cheap doesn’t mean good. Don’t waste time. Remember, bull markets in A-shares are short and bear markets long; wasting time on garbage stocks is the biggest betrayal of a bull market.

Sixth, the highest level of skill is learning to hold cash. This is the Achilles’ heel of retail investors but a must-know for experts. No matter how good your skills are, if you see these three signals, you must force yourself to go all cash: one, the 5-day moving average turns downward; two, the price breaks below the support of the moving average; three, a large bearish candle appears with a failed rebound. When you see these signs, don’t hold onto illusions—liquidate immediately.

Seventh, watch the early trading: buy aggressively during sharp dips, sell willingly during rapid surges. The first half-hour of trading is often when the main players reveal their true intentions. If the market opens more than 7 points higher and cannot hold the first half-hour limit-up, it’s a trap—an inducement to buy and a sign of overexertion. Reduce your holdings and take profits. Conversely, if there’s a sharp decline early on, and the price retraces to the 10- or 20-day moving average support, or quickly recovers within the day, that’s a golden entry point. Enter at this time for the highest win rate and risk-reward ratio.

Eighth, the 5-day moving average is your life line: hold stocks when above it, exit when below. Especially stocks hitting new 200-day highs—these are signals of a main upward wave. At this stage, don’t get distracted by fancy technical indicators—just watch volume: volume up with price, hold steady; volume stagnating or declining indicates distribution by the main players—quickly sell and avoid waiting for volume to drop and prices to fall further, because at that point, even a miracle can’t save you.

In the end, stock trading is a battle of mindset, not just skills. Surviving in this market is more important than anything else. Recite these eight phrases often; even if you only internalize one, your trading perspective will greatly improve.