Investing is not a 100-meter sprint, but a marathon. Among all the participating investors, the competition is not about who runs the fastest, but who runs the most steadily. Many investors do not truly understand this point and are only focused on how to get rich quickly, which is the main reason they are eventually squeezed out of the market. In contrast, investors who continue to make profits in the market will be found to have a completely different attitude.

Successful investors understand that trading must have a longer-term perspective to overcome the short-sightedness of human nature. It is crucial to consistently adhere to one's trading system. Michael Steinhardt, as one of the most successful fund managers on Wall Street, is extremely good at short-term investment and has strong analytical and execution abilities, known as the "Father of Short Selling." In 1993, he ranked in the top 400 of the Forbes rich list with a net worth of 300 million US dollars.

Steinhardt's judgment on direction is extremely accurate, and he strictly operates according to his trading system. In 1981, he used a 50 million US dollar fund to buy 250 million US dollars worth of bonds, and this investment earned a net profit of 40 million US dollars. At the end of 1984, he bought 400 million US dollars worth of medium-term government bonds, and although most of the money was borrowed using leverage, this trade still made a profit of 25 million US dollars.

In an interview, Steinhardt said: There is no 100% winning rate in trading methods. If you have a tested trading system that you firmly believe can make a profit, then you should execute trades according to the system's signals. There will be many factors affecting execution, such as confidence in the trading system, the trader's personality, and surrounding noise.

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Suppose you have conducted a fundamental analysis and concluded that the price will rise, and the system also gives a signal to enter a long position. At this time, someone says that there will be a better entry position later, or there is technical pressure, etc. But for you, these are all noise.

Even if your entry position is not good, you will still get your profits. So, when your trading system issues entry and exit signals, you should execute decisively. Do not harbor the illusion of expecting a better position. Because from a long-term perspective, the cost you pay each time you violate the system is much greater than the cost you pay for trading according to the system.

By observing Steinhardt's past trading experience, six principles have been summarized, which are very helpful for investors to improve their trading systems and enhance execution.

Trade selectively in appropriate amounts

Many novice investors are keen on frequent market transactions, but this does not necessarily have a positive effect. On the contrary, successful investors are more willing to wait for opportunities. When they feel uncertain about the market, they will maintain a wait-and-see attitude.At the same time, for transactions with a favorable market, successful investors will always maintain 2 to 3 times or more funds to cope with price fluctuations. If your funds are insufficient, you should reduce the number of contracts you hold, otherwise, it is likely that you will be forced to "cut your position" due to insufficient funds.

Do not blindly follow when the market rises sharply

In the market, the sharp rise or fall in prices will not rise or fall like a straight line. If the rise is too sharp, it will be adjusted, and if the fall is too fierce, it will rebound. The extent of the adjustment or rebound is relatively complex and not easy to grasp. Therefore, after the exchange rate rises sharply by two or three hundred points or five or six hundred points, you should be particularly careful. It is better to wait and see than to follow blindly.

Do not let a few points mislead you

When making a profit in a transaction, do not blindly pursue the profit target. In actual operations, some investors like to set a profit target for themselves after establishing a position, such as: to earn enough 200 US dollars before leaving, always waiting for this moment to come. When making a profit, the price is close to the target, but it is still a few points away from the target. Originally, it could be closed and the money could be collected, but due to the originally set target, it leads to missing the opportunity while waiting, which is not worth the loss.

Do not expect the lowest price

Usually, after the high price appears, many people feel uncomfortable with the new low price that appears when the market falls back, even if various analyses show that the market will fall again, and the market investment climate is very bad. Investors, in front of these new low prices, not only will not close the positions they hold, but also will have the impulse to buy at low prices, leading to being trapped directly after buying. Remember, let the "past price" go completely.

Strictly implement the stop-loss point

The market risk is quite high. In order to avoid immeasurable losses due to investment mistakes, every time you enter the market for trading, you must set a stop loss. Once the market reverses and the price falls to the stop-loss point, you should be brave enough to cut your losses. This is a very important investment skill.

Because even if you cut your losses for a while, the investment capital is still there. As long as the green mountains are there, there is no need to worry about no firewood to burn. This operation can control the scope of losses and prevent losses from expanding to the point of losing everything.Seize Opportunities in a Consolidation Pattern

A consolidation pattern refers to a situation where the market price fluctuates within a narrow range, with the buying and selling forces evenly matched, and the market is temporarily in a state of tug-of-war. Whether it is a consolidation pattern in an uptrend or a downtrend, once the consolidation ends and the market breaks through the resistance or support level, the price will make a breakthrough and move forward in a breakout pattern. For experienced investors, this is a good time to enter the market and establish positions. If the consolidation is a long-term resistance level, the positions established when breaking through the consolidation will be very profitable.

Cut positions immediately when the market reverses

Sometimes you trade with the market, but when you enter the market, it is already near the end, so you need to pay attention. Once a reversal occurs and the situation is not right, you should take a counterattack. For example, after buying in a bull market, the market immediately falls sharply. At this time, do not panic, it is best to reflect on it, if you can determine that the current situation is a reversal, you should immediately cut positions and take a counterattack.