title: [Book Sharing] The Poker of Speculators - 18 Years of Trading Notes
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date: 2022-06-01 00:00:00 UTC
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[](http://moo.im/a/1vyIVZ "The Poker of Speculators")
The Poker of Speculators - 18 Years of Trading Notes
投机者的扑克 : 操盘18年手记
Author: 扁蟲魚 Publisher: 樂金文化
#### Book Purchase Recommendation Website:
- [Readmoo Online Book Purchase](http://moo.im/a/1vyIVZ)
# Preface:
This is the ninth book I've finished reading this year. Our family is quite interesting; we go to the Xinyi District's Eslite Bookstore every month. Besides having a delicious lunch, we spend an afternoon looking at books. My daughter also enjoys reading at Eslite, often finishing one or two books in an afternoon, which is also a good opportunity for me to pick books.
This book seemed to be a recommended book on the shelf at Eslite, and I thought it was very good after a quick flip-through. So, I bought the e-book version to read properly.
# Content Summary:
Countless investors are eagerly waiting!
An 18-year history of trading, a reflection of blood and tears, directly hitting the deepest, most vulnerable parts of every person in the stock market!
To win in the stock market, you not only need to fight the market,
More importantly, you need to contend with your own blind arrogance, greed, fear, etc.
All kinds of irrationality...
◆ In the market, why are there always so many investors who correctly predict the market but still lose money?
◆ Why do "investment" behaviors, which we initially thought were not risky, often lead us to cut our losses?
◆ Are investment and speculation really distinct?
◆ Is the future of long-term value investing definitely bright?
A long-selling, popular masterpiece that many readers have been eagerly awaiting a reprint!
He once topped the market, escaped the bottom, and personally witnessed the rise of the Chinese stock market.
He tells you, in detail, the untold "history" of the Chinese financial market.
He also tells how a person who understands speculation in life can understand life from speculation in reverse.
# Chapter Outline
## Chapter 1: Understanding the Market is Emotion
It starts by mentioning the difference between "investment" and "speculation," and everyone thinks they are investing rather than speculating.
Value investors have a saying that "stock prices" are like dogs that run around. And the value itself is like the owner walking slowly forward, but in the end, the dog will return to the owner's side. But this book puts forward an interesting saying: Is it possible that the stock price you hold is like a "Tibetan Mastiff"? The owner can't catch it? Being dragged along?
Just like Enron in the US, after the market lost confidence. The stock price kept falling. Causing a chain reaction of a death spiral.
### How to go against the masses: Reverse the result, not just the behavior
Stocks are a behavior where a few people profit. It's not about directly doing the opposite of everyone else, but about thinking in reverse about why similar situations occur.
- Controlled trading
- Avoid trading based solely on charts or K-line charts
- Being timid and cautious is rare and precious
### Entry and exit points determine your profit and loss.
Even if you choose a good stock, if you buy too high, the risk is too high, and you won't be able to hold it when it falls. The rise and fall are originally fluctuations back and forth between two results, the question is whether you can hold on.
- Rise and fall are meaningless, they become meaningful after you participate.
- Rise and fall have no emotion, you have emotions after entering the market.
### The market is a kind of emotion
Market trends are the product of market emotions (or the sum of all investments), and your buy and sell points are the resonance between you and market emotions. Understanding this, you know that you need to understand the future of the market? Or spend more time studying how the self and emotions operate?
- Initial stimulation, have emotions, no action.
- Stimulated again, emotions deepen, have action.
- Small stimulation, emotions erupt, emotions have a superposition effect, and will also cause many types of actions.
### Happiness and Balance
Since you know that your own emotions and control often affect your profits, you need to control your happiness and emotions well.
- **Add more support in life**: Don't just trade, avoid being led by emotions.
- **Test trading with life balance:** Do you feel relaxed after placing an order? Can you completely not worry about your allocation? Then your chances of investment profit are extremely high.
### Stay Flexible
Don't stubbornly go against the market; the market is a master worthy of your respect, and you need to go with the flow. The author points out his disastrous defeat when investing in futures corn. After several major drops, he was unwilling to believe his problem. Finally, `he calmed down and analyzed the market from the short side's perspective`. He found that many unfavorable market factors were quite favorable to the short side, so he started to stop losses, and gradually became flexible.
## Chapter 2: Finding the Market's Code
### The transformation of long and short positions: Everyone who buys is a potential short seller, because one day in the future, you will still have to cash out.
## Chapter 3: Trading History
### No matter how many times you earn, bankruptcy only takes once
Livermore (an American investment master, but the author writes this way, it always makes me think he's Chinese) once said:
The market is always one-sided, neither a bull market nor a bear market, but the correct side.
Next, the author shares his experience of bankruptcy (this time it's very precious, you need to understand why you failed from other people's bankruptcy experiences).
- **The day you are fully invested is the day you are trapped**: When all the funds are invested, there is often no possibility of any change.
- **Those who think their opponents are fools are the most foolish.**
- Revere the essence of the market is to revere the opponent
- You're still alive until you die (there's still a chance before bankruptcy)
- Let risk awareness enter your blood, trading is a part of life, you need to know how to avoid risks.
- The first rule of goal management is to set a goal, and the first rule of investment is to set your own goal.
- **And the first rule of the goal is: Protect your principal**
## Chapter 4: Opening the Door to Trading
Understanding yourself is more important than understanding the market.
- Trade no more than ten times a year
- Don't do short-term trading, and don't stare at the market every day
- Closing position system and rest mode
- `Those who can buy are masters, those who can sell are masters, and those who can rest are grandfathers`
- Position size management (stop-loss mechanism)
- Emotions, attention management
- Pay attention to whether your buy point is blindly following the market
- Are your sell points also closing positions in panic following the market
### Things you need to ask yourself before the market opens:
- Following the market or going against the market
- Using a trend perspective or short-term inspiration
- Following the main players or the retail investors
- How long are you prepared to hold
- Stop-loss point
- Percentage of holdings
- Do you want to buy the bottom or catch the top?
- Have you tried a little first?
- Are your beliefs strong?
- Is your mindset balanced?
- Can you relax and take a walk without watching the market?
What you need to avoid is not buying at a low price, but "buying because of the low price"
### Exit Strategy
- Stop-loss exit (all)
- Profit-taking exit (half): In this situation, you can choose to re-enter.
- Profit exit (one-third)
- First signal (principal)
- Second signal (half position)
- Third signal (encountering three losses, completely exit)
- Time stop half (after a set period, the market doesn't break out) close half the position first, see how it goes.
- Sudden exit (all):
- Encountering a major unexpected event, exit everything immediately.
- If you profit, thank God, avoid a loss and exit.
- Emotional stop-loss (all)
- Due to family, health, or emotional conditions that are not suitable for trading stocks.
### Risk Control Considerations
- Never overdraw and trade with debt
- Don't go against the big trend
- `Full position means risk`
- Never average down
- Don't buy the bottom, don't sell the top
## Chapter 5: The Poker of Speculators
- Investment itself is like gambling, the question is whether you can adjust the winning probability to the highest.
- In addition to increasing the winning probability, reducing the probability of a full position also means more flexibility.
- Never use the Martingale system.
## Chapter 6: Escaping from Trading Risks
The key to a prosperous life for traders --- avoiding fatal blows (i.e., bankruptcy)
The author lists some traps that often appear in the trading market:
- **Low liquidity assets**: When the position is too high, it is easy to be forcibly sold short in low liquidity assets.
- **Information asymmetry causes a market with potential information gaps**: The Shanghai futures copper market and the London copper market, the author shorted Shanghai futures copper, but went long on London copper. Logically, it should be a very safe mechanism. Because of the daily limit, forced liquidation and some rules caused both ends to be forcibly liquidated. You have to be careful about these details.
- **Incorrect market analysis charts**: In a volatile market, giving overly one-sided charts can easily lead to incorrect interpretations.
Usually, in the speculative market, feedback always comes true and direct. You make a mistake, and the market will repair your pocket and your self-esteem in an appropriate way, like a compulsory tuition fee.
In the investment market, stop-loss is very important:
- Cut losses
- Protect your investment mindset
Stop-loss is admitting your mistake, which is what general investors hate the most. But this is an important action that can keep you motivated for the next investment (and capital).
## Chapter 7: Trading is the Most Fun Game in the World
- Based on your investment target, find the time points that need to be observed. Don't keep observing.
- Day trading requires a great deal of attention, and there is a high probability that you will also day trade your health.
- Arbitrage games:
- Inter-period arbitrage
- Cross-market arbitrage
- Cross-commodity arbitrage
- `Don't easily build a full position`
- Small positions, the flexibility of change is relatively large.
- After a full position, there are only a few strategies left to use.
- Develop good habits – fund management.
- Determine the profit percentage as the profit-taking point. (or partial profit-taking)
## Chapter 8: The Fall of the Strongest Trader
This is about the story of Livermore (Livemore), since [I bought his biography: Reminiscences of a Stock Operator](http://moo.im/a/aeyBKN). We won't elaborate too much.
## Chapter 9: Learning to Interpret and Connect Information
"Basis": The price difference between spot and futures.
- "Positive basis": The expected price in the future is much higher than the spot price. (Conversely: negative basis).
### About "Entropy"
Refers to unique, unpredictable parameters in the market. It represents chaos, disorder, and uncertainty. Some real-time market interpretations are full of too much uncertainty, which is the existence of "entropy". Even if you have many of your own judgments about "entropy", you can only start predicting future trends by following this chaotic and disordered information.
## Chapter 10: Following the Masters to Formulate Hypotheses
This chapter is about "Soros"'s investment strategy, which is the analysis of group psychology. As a speculator, it's like a sheep trying to judge the trend of the sheep in a flock. Soros is studying the correlation between group relationships and information, and through these correlations to predict future trends.
Try to give your judgment (hypothesis) about the current situation, and from the opposite perspective, criticize and think about the judgment you have made. Through the collision of both sides, you will slowly understand the public's thoughts and the possible future context.
## Chapter 11: Miracles in Trading
This chapter explains that in many cases, the market will have information that you cannot explain and understand. At this time, don't force yourself to find relevant context. Perhaps try to obtain peace through "inexplicable power," that is, the power of God. The author even suggests that you can obtain inner peace and avoid making overly emotional decisions through prayer.
## Chapter 12: Emotions and Personality
The author shares that when writing a book, he is often unable to complete the writing smoothly due to the influence of emotions and the body. The same is true for investment, often many times "doubt", "fear", "arrogance" and other negative emotions are filled, which can easily lead you to make unreasonable judgments during entry and exit. At this time, it is recommended to adjust through external conditions (referring to the external of the body). You can exercise to adjust your mood. You can also avoid making excessive interventions through "regular exercise" and regular investment habits.
## Chapter 13: The Training of a Trading Warrior
The courage to sit still for three years - Japanese trading master
In many cases, the timing of trading determines the success or failure of trading, so **"patiently wait. And have the patience to wait"**,
At this time, you need to have the keen sense of a trader, as well as the courage and determination of the masters. In many cases, everyone will talk about buying the bottom, but not many people have the courage to execute it.
An excellent warrior needs two important factors:
- Ability
- Mindset
## Chapter 14: Group Psychology and the Killer Game
This chapter is about describing that when the total number of the group is larger, the emotions are often quite extreme. The speculative market is also an extreme presentation of group psychology,
# Thoughts
This is a complete mindset manual, very similar to "A Trader's Confession of Loss" that I just finished reading. The author has experienced many successful trades, but unfortunately went bankrupt once. This book also starts from protecting your assets. We often hear from Buffett's famous saying: "Don't lose money", but in the speculative market (the author prefers to call it "speculation" because he believes that the future is unpredictable, what we can do is collect complete information. And speculate. But if you don't check the information, it's gambling).
This book provides a considerable amount of summary of experience, and also constantly reminds of the following things:
- Don't lose it all at once, you must strictly stop losses.
- Don't go full position, the methods you can change become relatively few.
- The mind is definitely what you have to overcome, more than the market fundamentals or any insider information.
- If you can't overcome your mind, try exercising or praying (if it helps).
This will be a very worthwhile investment teaching book to read in depth, but it also has some simple and easy-to-understand mindsets and entry strategies that I think benefit a lot.
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