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Summary of "Stock Wizard IV Winner's Rules"
"Stock Wizard IV: Winners' Rules" continues Mark Minervini's trading philosophy, focusing on "the ultimate fusion of mentality, discipline and strategy", aiming to help investors build a long-term profit system in complex markets. Although some readers think that its content is more psychological and less practical than the previous book, the book still extracts the following core framework:
1. Core Concept: Champion Thinking and Market Reality
Building a winning mentality
Belief system calibration : Successful traders need to abandon the "herd effect" and judge the market with independent thinking to avoid being swayed by short-term fluctuations or the opinions of others.
Reverse thinking : Stay vigilant when the market is extremely optimistic, and look for opportunities in panic, such as catching the leaders of the rebound at the end of a bear market.
Long-term perspective : focus on business fundamentals and industry trends rather than short-term price fluctuations.
Five cornerstones of the market
The market has infinite possibilities, and trading should be based on probability rather than certainty;
Profits and losses are randomly distributed, and losses need to be controlled through risk management;
The uniqueness of each transaction requires flexible responses and the rejection of rigid strategies.
2. Trading Discipline and Risk Management
Mathematicalization of Risk Control
Maximum risk limit for a single transaction : loss does not exceed 2% of total funds, and daily drawdown ≤ 6%.
Dynamic stop loss : The initial stop loss is set at 7%-8% below the support level, and moves up to the cost price or moving average support after making a profit.
Position management principles
Diversify your investments : Hold 4-8 stocks to avoid over-concentration;
Volatility adaptation : The position proportion of high-volatility targets (such as technology stocks) is lower than that of low-volatility targets (such as consumer stocks).
Black Swan Response
In the event of systemic risk (such as the index falling below the 200-day moving average), reduce positions to below 50% or hedge through inverse ETFs.
3. Deepening of Practical Strategies
Leader and enhanced application of VCP structure
Leader screening : stocks that are resilient and rebound first in a bear market, with revenue/net profit growth rate ≥ 30% and gross profit margin leading the industry813。
VCP 2.0 : Price fluctuations gradually narrow (such as the adjustment range from 30%→15%→8%), and the trading volume needs to be increased to more than 1.5 times the average volume when breaking through.
Refinement of buying and selling timing
Buying signal : a large volume breakthrough of the base high, a pullback to the moving average support, or performance exceeding expectations and the gap is not filled.
Sell signals : volume-price divergence (new price high but shrinking trading volume), relative strength (RS) falling below 70 percentile or below 50-day moving average.
4. Psychological Adjustment and Self-management
Emotional control tools
Trading log : record the decision logic and emotional fluctuations of each transaction, and conduct regular review and optimization.
Stress training : Control heart rate fluctuations through simulated trading and keep calm in decision-making.
Daily Practices of Champions
Focus and Isolation : Reduce external noise interference and focus only on the signals of your own trading system.
Continuous learning : Regularly update industry knowledge and adjust strategies based on macroeconomics (such as interest rates and inflation).
5. Controversy and Reader Feedback
Content evaluation
Positive side : It emphasizes mentality and discipline, and is suitable for investors with existing technical foundation to deepen their understanding.
Negatives : Some readers believe that the book lacks new strategies, is priced high (100-103 yuan for the hardcover edition), and has content that tends to be more like "psychological chicken soup."
Target Group
Suitable for short- to medium-term trend traders, especially those who need to make up for their psychological shortcomings or optimize their risk control systems.
Summarize
The core value of "Stock Wizard IV Winner's Rules" lies in the integration of **"technical analysis, risk management and psychological resilience"** to build a systematic trading framework. Although some of the content is questioned as repeating the previous work, its analysis of "champion thinking" still provides investors with a path to upgrade their mentality. It is recommended to combine the previous work "Stock Wizard" series with actual case studies to more fully grasp Minervini's trading system.
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