Category: Money tips Release Date: 2006-03-04
Phenomenon: many investors are in the pursuit of such a state - will never be driven and controlled by the dealer. Thus, to operate non-stop and kept cash profit or stop loss. On the surface, if the fear that, revenue would be high, but also to prevent the big risk; In fact, want to achieve this realm, while there are high returns, it is too difficult, and the possibility of not too high.
My clients and sales department of the customers is the way some people operate, long-term to the business department who often choose such methods of operation, want to pursue this realm. However, we found that their rate of return is not high. Our understanding of business, there are two clients that use this operating method. They view themselves as quite satisfactory operation, it in fact, from the end of last year to now, their earnings are about 20%, which is already lagging far behind the broader market by. Why income is not high?
Reasons: First, transaction costs. There is this idea of people basically based on the short-term operation. Under the existing provisions of the basic fee for operating the back and forth is 1% or so. If the one-year operation of 30 back and forth, the light would have 30% of the cost (in fact, many people over such a frequency). In other words, if the broad market rose 20 percent, your profit of more than 50 percent and the broad market in order to maintain synchronization. Such costs are often overlooked operator. Control costs, profits will not be too much, this is the experience of the real economy, are also useful in the capital markets.
The second reason is the probability. 10 operation, if the right seven times, the wrong 3 times. This operation returns will not be high. The most simple terms, three times the complement of the three loss making of; as well as four of them have to have one or twice the profits with 10 days to pay transaction costs. Think, finally how much revenue? If the operation of the five wrong 5, the basic loss should a lot.
The third reason is that bookmakers can not let you play in the shares of finger. Some people think I was out up or I'll buy. On the tape, it is possible to do so; but for individual stocks is not easy. Because our opponents are Zhuang. Within a day or two makers in making what we bad analysis; us what to do, the bookmakers are perfectly clear. If there is a group of people in this way, and Chuang confrontation, and think about how the dealer will do? He must have let you eat a few of his loss and not touch the stock. The market makers will always be dominated by the world rather than retail. I also make short-term, but generally with very little money to make, in a stock will not be old to make the difference, go long, and Chuang will not be tolerated, he will change the rhythm, make you uncomfortable.
The fourth reason is that financial capacity is limited. Can not take too much money to them over and over short-term. Individual stocks, the village does not allow too much money inside trouble. Furthermore, each person's energy is limited, it is impossible Gu won a lot of stock.
The fifth reason is that people have high tide low tide, I'm feeling there is a time when Shun is also not smooth. A period of time hand-shun, the success rate may be higher; but once the hand will not ring true (to enter low tide), the loss will be increased.
And so on.
My attitude is: to study carefully Makers (main funds) the general direction of a relatively comfortable position to Jiancang, and constant attention to the movements of the main funds. If there is no much change in the shareholding to wait for the main force pulled up, after all, the main purpose of large-scale intervention or for pulled the. In this way, changing it, the main find that you come in to intervene, and he did not much way. Sometimes, we enter, it will encounter the main Xi Pan, I usually let him wash, neither flesh, nor cover their short positions. In short, we do not interfere with the action makers. The result is the money to do so, the basic operation of a successful one done. Several operations down, your gains are considerable.
Recommendation: retail investors, or to look for their own methods of operation, and continually test. If they prove their own methods to make money in both bull and bear markets, and went to stay the course; but not too much perfection. I think the stock market would not be too many perfect things.
