Category: Money tips Release Date: 2006-10-24
"There are two ways to make profits, one is holding a small position to make large fluctuations, one is holding a large position to earn a small fluctuation."
What is long-term? What is short? In the financial speculation, perhaps we can trade days were all open positions as short-term trading, while the position for more than a trading day cycle of the transaction were all known as the long-term deal.
In the investor group, we will be able to find: the number of investors in favor of short-term trading is much higher than the number of investors engaging in long-term deal. However, a successful investor groups, we also found that the proportion of long-term investors are much higher than the short-term investors. This is an interesting phenomenon, why give up the majority of investors tend to be unsuccessful approach and prefer relatively difficult to approach?
Us to examine, we find that short-term investors, an important reason is the number of opportunities. The number of short-term opportunity is much larger than the number of long-term opportunity, this point is particularly evident in the performance of the foreign exchange market. From the perspective of utilization of funds, short-term trading can be more fully the use of funds to maximize the utilization of funds. But the opportunities = profit you with? This is a short-term investors need to seriously think about.
In contrast, the number of long-term investors the opportunity to focus on profitability is much less than the amount of attention. The fundamental purpose of investment is profitable, long-term operation, gave up some opportunities, but the profit level of certainty is more stable. I said: "enterprise fails to legislate, cross those who can not." Flash in the whirlpool of the opportunity to show short-term maneuvers hero, may over-indulge in the beautiful movements and the appreciation of their own small effort, but abandoned its profit-depth reflection, and the the pursuit of long-term stability and profitability.
Investors in exchange for the quality point of view, we have seen is the different requirements of psychological endurance. Pairs of short-term transactions, after all, the whole process of trading in their own noses, can be monitored, controlled, the effect direct and obvious, the psychological pressure of the time is short, it can not afford the liquidation is over. While the long-term transactions, can not monitor the position throughout the whole process of the transaction takes a long time to face unknown and not controllable uncertainty, which means that may take a long time a huge psychological pressure. If you think so, then a strong psychological endurance may be more suitable for long-term investors, while the psychological endurance weak short-term investors may be more suitable. However, many frequent operations on short notice also made a very high psychological demands, long-term deal there is no such psychological quality requirements, this is the case, psychological endurance is not an option long-term or short-term fundamental factors, how to choose will ultimately depend on psychological structure of investors.
Pulls into the psychology of investors is expected to profit point of view, short-term investors to profit within a short time is expected to be much higher than long-term investors. In the pursuit of high profits within a short time, under the psychological drive, they will naturally pursue opportunities for the number and frequency of operation. The long-term investors pay more attention to the stability of the profits. In fact, this is a foreign version of the story of Tortoise and the Hare. Speculation the secret of success is the use of compound interest. But the compound can play a role, it depends on the stability of profits. If we take the pursuit of short-term trading high profits compared the F1 cars to participate in competitions, to the pursuit of trading profits, compared the long-term stability in their own garden to open battery car, who is more likely to achieve their purpose is not self-evident. In the general investing public, there are number of people suitable for F1 racing game in hand, how many are suitable for open storage battery car? Thoughts on this issue can better help us determine their own position.
I said: "Road very barbarians, while the public good path." The point is that: a very flat road that lies ahead, but the public just loves to take the rugged trail. The road in the investment choices, there are long term and short-term Distinction. We hope that more and more investors choose to give up lane road, we will strive to contribute to the achievement.
