Friends who play stocks, I dare say that 90% of retail investors lose money not because of technology, but because of blind selection, random buying, and lack of control.
I have been speculating in stocks for more than ten years. From the beginning, I listened to the news, followed hot topics, read stock reviews, chased the highs and got stuck, bought the lows and caught the stocks. At that time, I always felt that there were some secrets in the stock market, some tricks that experts kept secret, and I stayed up late every day to study indicators and look at patterns. The more I studied, the more confused I became, and the more I did, the more I lost.
It wasn't until later that I completely figured it out: We ordinary retail investors have no information, no funds, and no professional analysis capabilities, so we shouldn't engage in those fancy and complicated tactics. The simpler, dumber, and more executable the method is, the more profitable it is.
Today, I will share with you three stupid stock picking methods that I have used for several years, are very reliable, and have never stepped on big mistakes. They are complete and without a single lie. The core is just one sentence: only focus on the tickets that have reached the daily limit within 15 days, and then use the two simplest filtering techniques to screen out all deceptive tickets, garbage tickets, and thunder tickets.
You don’t need to know accounting, you don’t need to be proficient in technology, and you don’t need to keep an eye on the market every day. Even if you are a novice who has just entered the market for half a year, you can avoid 80% of pitfalls by following these steps. There are no empty theories, they are all practical things that I have tried out with real money.
1. Why do I only select the tickets with "rising limit within 15 days"? This is not chasing highs, this is choosing to be active
As soon as many people heard "vote for the price limit", they immediately waved their hands: No, no, you will die if you chase the high!
Let me make it clear first: My method does not chase the daily limit at all, does not hit the market, and does not connect the market to monster stocks!
I never bet on the kind of stocks that keep rising to the limit. Those stocks seem to make money quickly, but the price drops even harder, and retail investors can't catch it. I never make money that licks the bullet.
There is only one most practical reason why I choose the ticket with "rising limit within 15 days":
The daily limit is the most honest and least deceptive signal of activity for a stock.
If a stock can exceed the daily limit, whether it is short-term hot money, institutional test trading, or the main force starting to enter the market, it all means one thing: there are real money funds paying attention to it and buying it.
Everything in the stock market can deceive people, K-lines can be drawn, moving averages can be made, and news can be compiled, but the daily limit and trading volume cannot deceive people.
A stock that has not raised its daily limit for a long time and keeps trending every day, even if its performance is amazing, is likely to be a "zombie stock" that no one cares about. If you buy it and trade sideways for three months, you will waste time, waste money, torture your mentality, and in the end it will easily fall.
The time I set for 15 days is also the most comfortable range found through repeated trials:
• Less than 15 days: The fluctuations just after the daily limit are too large and it is easy to chase the high level.
• More than 15 days: The popularity of funds has subsided and the equity has become dead again.
There has been a daily limit within 15 days, which shows that this stock is active, has capital memory, and the main force has not gone far. It will be easy to start again if the volume is slightly increased later.
When we retail investors do stocks, first of all, we don’t seek huge profits, and secondly, we don’t seek monster stocks. We just seek to avoid traps, avoid being trapped, and make some stable money. If you choose from active votes, the winning rate is naturally much higher than that of dead stocks.
Therefore, my first step in stock selection is to directly reduce the more than 4,000 stocks in the market to a small range that has reached the daily limit in the past 15 days. The scope is small, the thinking becomes clear immediately, and you no longer have to stare at thousands of tickets in a daze.
2. The first stupid way: pull out the daily limit pool and blacklist the three types of high-risk tickets first
The first step can be done by any free market software, and it can be done in one minute:
Direct screening: stocks that have reached daily limit in the past 15 trading days.
Once you’ve chosen it, don’t rush to buy it!
The first thing is demining. I don’t care how good the trend of the ticket is or how exciting the news is, as long as it meets the following three conditions, I will directly eliminate it without even looking at it:
Category 1: Tickets with 3 or more consecutive price limits will be blacklisted directly.
This kind of ticket is an emotional extreme ticket. It rises crazily and falls ruthlessly. Retail investors have no channel advantage or information advantage. There is a high probability that they will get the last shot if they enter. I am not greedy for this money, nor do I take this risk.
Category 2: The trading volume fluctuates between large and small, and the tickets are obviously abnormal and reversed. Do not
Some tickets were released for the day one day, but were directly reduced to the ground level the next day, with the K line jumping up and down. This is obviously a short-term fund playing against and making a game. When we go in, we just give chips to others, and we are harvested purely.
Category 3: ST, ST, tickets with risk warnings and thunderous performance forecasts will not be touched
I advise all retail investors to keep this in mind: We come to the stock market to make money, not to bet on the company’s resurrection.
No matter how cheap it is, no matter how high it is, no matter how aggressive others are, as long as there is a risk warning, as long as the performance continues to suffer big losses, just skip it. If a retail investor makes a big loss, he may not be able to recover for half a year. Safety always comes first.
With just these three steps, you will be able to clean up more than half of your self-selected stocks in one go.
But this is far from enough. If you want to avoid stepping into pitfalls, you must use my two core filtering techniques to directly eliminate 80% of weak stocks and problem stocks.
3. The second stupid method: the first filter – financial filtering technique, 3 indicators to avoid storm stocks
Most of the money lost by retail investors is caused by stepping on thunder.
The trend seemed to be going well, but suddenly the performance exploded, the debt exploded, and the capital chain broke. It fell to the limit, and it was impossible to escape even if it wanted to, and finally it was cut in half.
I have seen too many retail investors who don't look at financials at all and only look at whether the K-line is red or not. This is the stupidest thing to do.
But I don’t let everyone read complicated financial reports, such as revenue, gross profit, and return on equity. It’s too troublesome for ordinary people to remember.
I only look at the 3 stupidest, most practical, and least error-prone financial indicators. You can check them out on the F10 page in one minute:
1. The net profit in the last three years must be positive
It is not required to make billions, even tens of millions a year. The key is not to suffer continuous losses. A company that continues to make losses is a problem company. No matter how fanciful the stories are, we won’t touch them.
2. Asset-liability ratio is less than 50%
If the debt ratio is too high, it means that the company owes a lot of debt. You can still hold on when the market is good, but when the market goes bad and funds are tight, big problems can easily occur. 50% is my own safety line. Below it, I dare to look down.
3. Operating cash flow must be positive
Remember this sentence: profits can be accounted for, but cash flow cannot be faked.
Some companies reported profits of several hundred million, but the cash flow turned out to be negative, which means that the money did not enter the company's account at all, and it was all paper wealth. Only when the operating cash flow is positive, is it truly making money and making money.
Of these three hard indicators, if one fails to meet the standard, it will be eliminated directly.
Don't think it's harsh. The most important thing in the stock market is stocks. We only deal with the safest and healthiest stocks. Those with flaws are left to the brave.
After this screening, any performance mines, high debt pits, or shell companies will basically have nothing to do with you.
4. The third stupid method: the second filter – trend filtering technique, using two moving averages to avoid the downward channel
If the financial performance is good, it can only mean that the company is relatively safe, but if the trend is not good, it will still lose money.
Many retail investors like to buy stocks at the bottom and buy stocks that have fallen for a long time. As a result, they buy stocks halfway up the mountain.
Let me tell you the most practical truth:
In a downward trend, there is no lowest, only lower; in an upward trend, there is no need to worry, just sit back and win.
When I judge the trend, I never use complicated indicators. I just look at two moving averages. It’s so simple that even a novice can learn it:
The first one: 20-day moving average
This is the watershed between short-term strength and weakness. If the stock price is above the 20-day line, it indicates that the short-term trend is good; if it is below, it means that it is weak and can fall at any time.
Second root: 60-day moving average
This is a medium-term lifeline. The stock price is above the 60-day line, indicating that the general trend is not bad and the main force has not completely left.
My requirements are very strict:
The stock price must stand above the 20-day moving average and the 60-day moving average at the same time, both are indispensable.
Both moving averages are above, which means that the short and medium-term trends are all going well, the main force is willing to protect the stock price, the room for decline is limited, and the probability of rise is greatly increased.
As long as it is below the moving average, no matter how cheap it is or how good others say it is, I will not watch it.
At this point, let’s do the math:
15-day daily limit tickets → Exclude 3 types of high-risk tickets → Filter by 3 financial indicators → Filter by double moving average trend
After a set of procedures, there are more than 4,000 stocks, and only twenty or thirty stocks may be left in the end.
Is it difficult to pick stocks? It's not difficult at all.
The difficulty is that you are unwilling to use stupid methods and always want to eat a fat man in one bite.
5. How to determine where to buy? 3 signals appear at the same time, it’s not too late to take action
The vote is out, don’t buy it right away!
The biggest problem of our retail investors is that we are quick and can't help but rush directly when we see good tickets. As a result, we buy at the shock point and get washed back and forth.
When I buy stocks, I only wait for three signals to appear at the same time, and I don’t take action if any one of them is missing:
The first signal: After the daily limit, the stock price fluctuates near the daily limit and does not break the 10-day moving average.
After the daily limit, it is not a continuous big rise, but a sideways movement of small yin and small yang. It does not fall, does not crash, does not panic, and stands firmly above the 10-day moving average.
This shows that the main force has not shipped, and the chips are very stable. They are just washing away the unsteady retail investors, and they will pull out after washing them.
The second signal: the average trading volume in the past five days is more than 30% larger than the average volume in the 20th day.
Quantity comes first, price rises without quantity are just hooligans.
The trading volume is slowly increasing, indicating that funds are quietly entering the market. It is not a one-day trend, but it is really starting to happen.
The third signal: The cumulative net inflow of main funds in the past three days, with a significant inflow in a single day
I do not require huge inflows every day. As long as there are inflows for three consecutive days and there is no large-scale flight, it means that the attitude of the funds is very clear and they are willing to move up.
When the three signals coincide, the buying point is very clear:
There are funds, trends, healthy consolidation, and large-scale start-up
With this kind of ticket, there is no need to gamble or guess, and the winning rate is ten times higher than if you buy randomly.
I have been doing stocks for so many years, and I understand more and more:
What we retail investors make is not luck money, but discipline money.
If you buy according to the rules and enter according to the signals, you will naturally avoid most traps.
6. Position and stop loss: 3 iron rules, preserving principal is more important than anything else
No matter how easy the method is, if you don't control the risks, you can still lose money.
I have seen too many people who picked the right stocks, but ended up with a full position. After a small correction, their mentality collapsed and they were at the lowest point; there are also people who did not stop losing money and carried on all the way, turning a small loss into a deep position.
I have set three rigid disciplines for myself, which are simple, brutal, and must be implemented:
Article 1: A single stock position should never exceed 30%
Never be dissatisfied with a position, never stud, and never put all your money on one ticket.
With the split warehouse layout, even if one ticket goes bad, it will not affect the overall account. Only by sleeping well and having a stable mentality can you make profits.
Article 2: Two stop loss conditions, trigger one and leave immediately
The stop loss I set for myself is very clear:
• Effectively fell below the 20-day moving average, moving
• If a single loss reaches 8%, go
Don't fantasize, don't cover positions, don't carry on, and don't listen to news to comfort you.
The most harmful thing about the stock market is that "if you wait a little longer, it will rebound." By the time you realize it, you are already deeply trapped.
We retail investors should admit when we are wrong, leave the market with a small loss, and keep our principal for always having a chance.
Article 3: Not purely speculative topics, only tickets with a healthy structure, regularly updated and chosen
Theme stocks come and go even faster. After a gust of wind, everything is covered with chicken feathers.
I only do: stocks with good trends, inflow of funds, and healthy finances. I review the market once a month, delete stocks that go bad, add new targets, and always only deal with strong stocks and healthy stocks.
In fact, in the end of stock trading, what matters is not how good the technology is, but whether the discipline is strong enough.
If you can control your losses and execute stop losses, you will already beat 70% of the people in the market.
7. Say this from the bottom of my heart: The stupid way is the best way for retail investors.
Writing this, someone may say:
Your method is too stupid. Can you make money so easily? Can you catch bull stocks?
I tell the truth:
You can’t catch the most evil one, but you can avoid 90% of the most annoying ones!
What is the purpose of us ordinary retail investors entering the stock market?
It’s not about doubling your money a year, it’s not about achieving financial freedom, it’s about not losing money, making small profits, and maintaining long-term stability.
This method of mine does not seek huge profits, but only seeks to reduce the probability of losses and increase the probability of making money.
Using this method, you will not step on the performance thunder, buy in the descending channel, chase after the high position to take orders, and will not be trapped by the immeasurable negative decline.
When others suffer huge losses, you may make a small profit or not lose at all;
When others start making money, you keep up.
Over the past year, the account has grown steadily, which is better than anything else.
After so many years of stock trading, my biggest realization is:
The stock market specializes in treating all kinds of dissatisfaction, and it also specializes in treating all kinds of people who want to take shortcuts.
Learn a tactic today, change an indicator tomorrow, follow hot spots and listen to news every day, and you will definitely lose money in the end.
What can really keep you alive for a long time are simple, repeatable, standardized, and risk-controlled methods.
My set of "15-day daily limit ticket + 2 filtering techniques" has no threshold and no mystery. It is tailor-made for us retail investors.
You don’t need to have a high degree of education, you don’t need to watch the market every day, and you don’t need to understand complex analysis. As long as you are willing to follow the instructions and execute them, you can avoid countless detours.
There is never a shortage of opportunities in the stock market, but there is a shortage of people who follow the rules, are patient, and are not greedy.
Don't always think about getting rich overnight. Make every operation steady and avoid every risk. Time will definitely be on your side.
8. Risk warning
Risk warning: The stock market is risky, so be cautious when investing! This article is only a personal opinion. The content and subject matter are for reference only. It does not constitute investment advice or recommendation. Investors buy and sell based on this and bear their own risks! A-shares are very risky, and there is no sure-fire strategy to make money. Everyone must make prudent decisions based on their own circumstances.
Remember to be rational when investing, and don’t be greedy, blindly obedient, or impulsive.
Finally, I would like to share two honest words with you:
Do you usually choose stocks, do you like to listen to the news, buy the bottom, or do you like to watch trends? Have you ever stepped into a trap because of "blind buying"?
Welcome to talk about your real experience in the comment area, let’s communicate together and avoid various pitfalls in the stock market!
