There is a popular saying in the industry.

Buying stocks is like buying blind boxes for leeks.

The thrill of opening a blind box is self-evident, but the outcome is often disappointing.

Because blind box companies want to make money, they make the good blind boxes very scarce and valuable.

But this actually has nothing to do with most retail investors, because the blind boxes you buy are often not very good.

In the A-share market, there are more than 5,000 listed companies, and on average, 50 can hit the daily limit.

This means that you have a 1% chance of catching a limit-up when you open a blind box.

If you know a little about stocks and can eliminate some stocks that will definitely not hit the limit-up, the probability can be increased by 3 to 5 times.

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Doesn't it seem that the probability is not very low, and the opportunity is very big?

Your probability of catching a limit-up is not actually low, but your probability of losing money is also not small.When the market has 4,000 stocks declining and only 1,000 rising, your probability of making money is inevitably only 20%.

Even if it seems that you might be able to catch a stock that hits the daily limit up, achieving a profit of 10%, or even 20%, and the number of stocks hitting the daily limit down is not many.

You might mistakenly believe that you are making big profits and small losses, but in fact, the outcome is small profits and big losses.

Because statistically, from the actual probability, you will definitely buy more losing stocks, and you will still be at a loss on the overall account.

This is the main reason why those who like to chase the board ultimately do not make much money.

If chasing the board is really so easy to make money, then the whole market would just chase the limit-up stocks, and no one would lose money.

It is precisely because for most people, stocks are more like blind boxes, which leads to these people constantly changing stocks, pursuing the so-called money-making effect.

But in reality, the difficulty of stock trading is greater than that of opening a blind box, because stocks are transactions, while blind boxes are just a result.

Blind box, once you open a rare model, it's settled.

Stocks, even if you catch a big bull stock, buy a big demon stock, it does not mean you will make a lot of money, you may even lose money.Because stocks need to be bought and sold.

Even if it's a bad stock, if the overall trend is downward and the buying and selling points are well controlled, you can still make money.

Even if it's a good stock, if the overall trend is upward and you chase the rise and cut the fall, you will still lose money.

How to avoid opening blind boxes in stock trading and how to clarify the trading methods has become the top priority.

The key to avoiding blind boxes lies in stock selection.

And the key to stock selection lies in understanding a few things.

First, the holding period.

Different investment ideas lead to different holding periods, and the stock selection ideas must be different.

Some people just like short lines, then they definitely don't pay attention to performance.Some people want to invest for the long term, so they must study the fundamentals thoroughly.

During the holding period, the factors affecting stock prices will definitely be arranged in a certain order.

From short to long, they are mainly popularity, theme, trend, industry, and performance.

The shorter the cycle, the more attention is paid to the front, and the longer the cycle, the more attention is paid to the back.

Second, profit expectations.

How much money you want to make determines how you should choose stocks.

If you want to earn 5% per year, then buy some high dividend stocks and get a dividend.

But most people's expectations are to earn 20%, 30%, or even higher.

It doesn't seem difficult, just open two limit-up blind boxes, and it seems to have achieved the goal.

Profit expectations are actually the main factor in stock selection strategy, because if you want to earn more, you need a larger space for speculation.If expectations are not high, then the stability of the purchased stocks should be higher.

Thirdly, the risk coefficient.

Stock selection cannot only look at the rise, but also at the decline space, how much is the risk coefficient.

For example, if you buy stocks at a high price, the risk coefficient must be relatively high.

Especially after a sharp rise, many stocks are at a high position, and when they really fall, the initial drop is just the beginning.

In contrast, stocks that have been fluctuating at a low level for a long time have a relatively low risk coefficient.

The performance is relatively stable, and the stock price goes up and down within a certain range, indicating that the value is within this range, and the risk is relatively small.

Of course, taking a bit of risk can lead to higher returns, so people with different risk preferences choose completely different stocks.

Generally speaking, the larger the trading volume, the higher the risk coefficient, but the profit effect is often better.

Investors need to weigh the opportunities between risk and return, and then make a choice that suits themselves.Fourthly, the value of investment.

The final aspect is the value of investment, which can also be referred to as the comprehensive rate of return.

When choosing a stock, it is essential to understand where the investment value of that stock lies.

Speculative stocks have room for imagination, blue-chip stocks offer dividend returns, and white-horse stocks have growth potential.

Existence is rational, and every stock has its investment value.

Even the stocks of listed companies that are determined to be delisted will still attract capital to play the market, and that is the market itself.

So, what is the corresponding investment value of the stock you have chosen?

Many people buy stocks as if they are opening blind boxes, only looking at the chart and volume, and even the name is considered superfluous; knowing the code is enough.

It would be strange to make money by investing in stocks in this way.

Because there is a reason for capital to speculate on a particular stock, why out of 5,000, they choose this one and not that one.Blind boxes represent complete ignorance, while the public information of stocks and their historical trends are known.

One must learn to predict and analyze future trends through known information, which is the essence of stock trading.

Ultimately, profit or loss is a result of the accuracy of the prediction.

How should ordinary retail investors clarify their trading methods?

Because selecting a stock does not mean making money; if the trade is wrong, you will still lose money.

Polishing a trading model is a very complex thing, but there are several general principles that are common.

Essentially, what we need to do is buy low and sell high, so the essence of buying and selling points is high and low.

This seems simple, but it is actually difficult to operate because there are no standards for high and low.

So, the trading model must include judgments of high and low.Here are two very useful principles and standards for everyone:

1. Trends determine high and low points.

When the trend is upward, the present is a relatively low point, and when the trend is downward, the present is a relatively high point.

In an upward trend, the stock price will fluctuate and move upwards, so the present must be a low point, and the future will be a high point.

Therefore, the trend should be the primary reference when buying stocks.

2. Volume and price determine high and low points.

When the volume is increasing, the present is a relatively low point, and when the volume is decreasing, the present is a relatively high point.

Most stocks that are rising have a lot of capital involved, so they must be trading with high volume.

At the low point of volume, the stock price is generally safer, but only with increased volume can the probability of rising be increased.

After a high volume, a decrease in volume should be avoided, and an increase in volume after a long period of low volume should be taken seriously.The volume can also affect the direction of the trend, so it is more accurate than judging the high or low of the trend.

Buying when no one cares, selling when everyone is talking, is the ultimate mystery of volume, and it is also the main basis for judging the high and low points.

Stock trading is definitely not buying a blind box. If you feel like you are buying a blind box, you need to reflect on it quickly.

In this market, transactions that are unclear and rely on luck to make money are destined to give it back.