Long term trading emphasizes rationality over passion. Long term trading is theoretically more suitable for a large number of investors because it emphasizes rationality, but it is also because it is too rational and objective that it will lose the excitement of daily trading, forming a lonely and more enduring trading behavior, somewhat like an ascetic. This kind of hardship has led many people to rejoin the ranks of short-term trading.
Long term trading pursues trends, believing that trends are their only true friend and the source of their profits. They do not value intraday price fluctuations and believe that they are almost unrelated to themselves. This can also make people feel numb, even like a fool. They do not value how the market will go the next day, they only focus on whether the trend has ended. The endurance of long-term traders in holding positions is beyond the understanding and tolerance of ordinary investors.
There is a misconception in the market that long-term traders are able to hold positions for a long time because they can predict market trends and endpoints, so they can confidently hold them for the long term! This is a huge misunderstanding! In fact, long-term traders, like you, do not know the future trend of the market. They just follow the discipline and track the trend.
For long-term investors, they need to have the following investment mentality:
1. The speculative mentality should be reduced
To establish a rational investment philosophy, do not be swayed by small fluctuations in stock prices, do not let investment become speculation, and do not turn long-term operations into short-term operations.
2. Impatience mentality needs to be changed
Long term investors need to have a patience for waiting. After a certain increase in stock price, they should not only dare to hold shares but also dare to replenish positions at a low level, firmly adhering to their long-term investment philosophy.
3. Flipping books is not something that can be done in a day or two
Long term investors should not rush to recoup their losses when they are trapped or eliminated. They should face it calmly and patiently wait for new investment opportunities.
4. Keep a calm mind and avoid panic and sudden drops
Some long-term investors are easily affected by certain negative news, feeling panic and losing confidence in the stock market or their stocks, so they desperately sell their stocks. Some investors may mistakenly believe in some positive news, which often leads to being deceived by some main market makers with ulterior motives. Therefore, we suggest that long-term investors must maintain a calm mind, objectively analyze the authenticity of various news, and avoid blindly panicking and selling.
5. Long term operations do not require frequent handling
Long term investors should avoid chasing gains and selling losses in the market, and engage in frequent operations. This can only result in paying more commissions to securities companies, while ultimately making little profit for themselves. At the same time, it also increases investment risks.
In addition, some investors love to blindly chase hot topics. It should be noted that the hot topics in the market are always changing. If they blindly follow the trend and chase hot topics, it is easy to get stuck at high levels. Rational and long-term investors do not blindly chase hot topics, but instead search for future hot stocks from obscure stocks and potential stocks with significant upward potential from low-priced stocks that have not yet been inflated. Long term investors should establish the awareness of independent buying and selling of stocks, learn to combine their own analysis to trade stocks, and not blindly follow the trend.
How to do long-term stock trading?
Firstly, long-term investment is by no means indiscriminate, simply grabbing a stock and investing in it for the long term. Some investors believe that long-term investment is buying at low prices when stock prices are low, and then holding for the long term will definitely yield profits. In fact, the quality of stocks is very important. Without sufficient analysis and research on the fundamentals of individual stocks, regardless of whether they have upward potential, it is highly likely that there will be no gains or even negative returns if one randomly buys a stock for long-term investment.
Secondly, long-term investment cannot be ignored. Some investors believe that long-term investment is like bank deposits, where they turn a blind eye to buying stocks and hope to make a fortune by closing their eyes. This is like covering your ears and stealing a bell.
Thirdly, long-term investment requires a specific operational plan. The formulation of these plans is beneficial for investors to implement investment thinking, strengthen their confidence in holding shares, and ultimately achieve long-term investment success. However, environmental factors in the market are constantly evolving and changing. We need to adjust our plans and goals in a timely manner according to the rising trend of stock prices, so that the plans and goals serve ourselves and cannot be constrained by them.
Finally, long-term investment still needs to be sold. Investors should not forget that the fundamental purpose of long-term investment is to make profits. When the upward trend of stock prices is hindered, or the overall market trend weakens, or when the development speed of listed companies slows down and gradually loses their original investment value, investors should decisively adjust their investment portfolio, reduce positions, and sell.
