投机实验室

I made a mistake. Where did I go wrong?

I was bearish in the bear market, and that’s not the issue. I shorted stocks, which was also the right move.

My mistake was getting out too early, and that cost me big time.

My directional call was on point, but my execution was off.

——Jesse Livermore

Good book sharing, Philip Fisher's 'How to Choose Growth Stocks'.

A classic that transcends the century, it can be said to be the best guide for qualitative stock analysis.

This book is actually a collection of Fisher's works, divided into 3 parts, including the most famous 'Common Stocks and Uncommon Profits',
and another work 'The Conservative Investor's Sleeping Well', along with his investment philosophy.

Fisher can be considered Buffett's teacher, as many of his ideas have almost changed the way growth stock investment research is conducted.

The book includes his most famous 15 points for finding excellent stocks and the chit-chat method,
at the end, he also summarizes his investment philosophy into 8 dimensions.

Although it has been summarized and cited multiple times, reading the original author's detailed narrative provides a different experience, I recommend everyone to take a look.

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A company's report and balance sheet,

can only reflect the past and present, and cannot tell you what the future will be like.

—— Nicolas Darvas

The stock market is full of such people, who have a price concept for everything,

yet know nothing of its true value.

——Philip A. Fisher

If your assessment of this trend is correct, then after your first entry, you will quickly see floating profits.

From then on, what you need to do is to always stay alert and pay attention to signals that indicate danger.

Once the signals appear, promptly withdraw from the market and secure the paper profits.

—— Jesse Livermore

Michael Marcos, the legendary trader who turned a capital of 30,000 USD into 80 million USD.

In his early years, he was a repeatedly failing super rookie, often trading impulsively and losing everything, with borrowed money fully invested in the market.

Thanks to the guidance of Ed Sycota, he realized the importance of trading discipline.

He said these are the eternal trading rules he has always followed.

First, never let a single loss exceed 5%.
The maximum risk of any trade cannot exceed 5% of the total capital; the core of this approach is not to increase the win rate but to ensure that the account has enough margin for error, so that it won't be directly breached by several consecutive mistakes.

Second, set stop-loss levels before entering a trade.
Stop-loss must be determined before opening a position because once in, it's easy for a person to be influenced by unrealized losses in their judgment. Setting a stop-loss in advance essentially cuts off the illusion of luck with discipline, preventing small mistakes from turning into large losses.

Next, confirm fundamentals, technicals, and market responses simultaneously.
Good trading opportunities should not rely on a single signal but should check if three points resonate: whether the fundamental direction supports it, whether the technical trend is valid, and whether the market's reaction to the news meets expectations, especially emphasizing the last point, as market reactions are often more important than the news itself.

Finally, cut losing positions promptly and hold winning positions as much as possible.
The key to trading is not making the right call every time but keeping losses small when losing and making big profits when winning. Only by controlling small losses and truly holding on to profitable positions can the overall profit and loss structure work in your favor.

Marcos also said that trading must involve independent judgment and not blindly follow others; if you can't see clearly, it's best to exit and observe, avoiding hesitation and luck from amplifying risks.
And don’t let trading become everything in life; the ultimate goal of a successful trader must be a harmonious balance between life and work.