Why Drawdown Can Not Be Avoided
Drawdown is nearly impossible to avoid for a number of reasons.
First, both macro and micro economy systems has inherent cycles, including security market, where price got pushed up by up-tick buying forces for a variety reasons and drove down by subsequent asset monetization encouraged by price rise.
Second, we all frequently make mistakes when trading, either in stock pick or timing. The reality that we cannot realiably predict both market and specific stock movement makes drawdown normal.
Credit can be divided into two broard categories:
1. The credit of currency (The goodfath of government monetary authority)
2. A claim on currency
The future profitability of CHGG lies on the R&D and monetization of technology driven online learning system. Current valuation level can be justified by evolutinoal educations solution, which remains unclear in both product design and market reaction.
First Order Consequence
The most direct consequence
Second Order Consequence : The most indirect consequence. Which is the consequence that is result as the first order consequence. Thus, a cause-and-effect chain.
Both Chinese and U.S. stock market can be followed, but only short U.S. general stocks, and long/short for U.S. non Chinese company stocks.
Trading strategies for China market should be niche position, advance position in potentional niche industry sector stocks. Niche finding can be localised in China, or from niche in the U.S. market.
Trading strategies for U.S. market should be short selling following various signals, reports plus self-analysis result.
For China company stock in U.S. market, cutting edge can be possibly obtained from information advantage.
For U.S. market, buying IPO hot stock and dump at the end of IPO day may be a viable strategy, since U.S IPO has no stock subscription limit.
Price Impact of Follow-on Offering
If the offering price is higher than the market, the market price will be pull up.
If the offering price is lower than the market, the market price will decline due to the possible short sell arbitrage oppertunity to thoes who receive stocker in the offering.
April and May Goal
Double $ 200 in day trading Chinese Concept Stocks. When value declined below $ 100, declared failure and start over with reflections.
Money Market Fund
short 30 shares of CLWT
Trend following， in a short term trend, the probability of trend continuing in the next day is larger than discontinue.
The dynamic of stock price burst for small cap companies.
News incentive attracts speculators buys in bulks of stock, which pulls up stock price and attracts community attention, primarily individuals investors from Chinese mainland and Hongkong. The speculators then slowly close their position, sell stocks to late entry individuals. The stock price would not dramatically fall after the main players close their positions. Rather, it would slowly going upward flueculy. This happens because late entry individuals are expecting further price growth. The dynamic continues in the same pattern until price is bid to a unsustainable level, leading to a irreversible slipping.
1/5仓位低点买入当日暴涨中概股，股价上升20%后抛出，附加market on close order
follow company constantly to search for trading opportunities
The purpose of equity and market research is to find great trading timings.
IPO subscription requires to buy at least 1000 shares.
The cause of IPO failure
The greedy of private investor and underwriters together with lack of public interest is the cause of IPO failure.
Pinterest Trading Guide
- 90% gain target if trading is hot = $ 36.1
- 30% gain target if not so hot = $ 24.7
The margin of safty of Trend Follow Speculation can be improved
The momentum of trend realization is longer than expected by inspection of recent trading activities
Dalio's 5-step Process
- Have clear goals
- Identify and don't tolerate the problems that stand in the way of your achieving those goals
- Accurately diagnose the problems to get at their root causes
- Design plans that will get you around them
- Do what's necessary to push these designs through to results
An increase in inflation rate reflects growth of demand is faster than the growth of supply.
Increase in inflation indicates a higher economic activity.
Inflation rate also influence the inflation expection of market participants, a mildly growth inflation means the general price level will grow, which leads to the cost of revenue. The market participants are more willing to spend and invest under the expection of future inflation due to its impairement effect on buying power. This is partially to boost future economic return.