Stock Investment Strategies: Scope and Specific Approaches

Stock investment strategies and an investor’s trading system share a similar scope. They serve as guidelines for stock selection, trading, and position management. Having a trading system that suits both the investor and the market is the key to consistent and stable profits.

1. Stock Selection
   Build your own watchlist, manage it dynamically, and continuously track stocks, waiting for the right buying opportunity before taking action.

   Stock Selection Logic: Hot thematic stocks, growth stocks, turnaround stocks, undervalued stocks, asset restructuring stocks, arbitrage stocks, etc. Previous discussions have covered how to select stocks during the closing session.

2. Portfolio Principle: Proper Diversification
   When buying opportunities arise, use a portfolio approach and ensure proper diversification.

   This avoids the risks of "black swan" events from overconcentration and the frustration of prolonged stagnation or being trapped in losing positions. A portfolio should consist of stocks from different industries and themes.

3. Follow the Trend
   Adjust positions by adding or reducing holdings, or shorting in downtrends—never go against the trend.

   Strictly adhere to the "lifeline" discipline. Go long when the market or stock price is above the lifeline; otherwise, consider shorting.

   The lifeline mainly refers to moving averages. Short-term trading typically uses the 10-day MA, while medium- to long-term trading uses the 20-day or 30-day MA. Alternatively, the lifeline in Winner Gann’s Extreme Reverse Channel can be used for judgment.

4. Position Management
   Trade in batches. When an entry opportunity arises, buy multiple stocks in batches. Similarly, sell in batches when exiting. Pay attention to position control.

   When the market surges with strong volume and most stocks rise, heavy positions are advisable. Conversely, reducing positions or going short is necessary.

5. Continuously Improve the Trading System
   Based on the above principles, construct your own trading system. During normal operations, strictly follow the system. However, the system is not static—continuously refine and improve it based on actual trading experiences to ensure sustainable profitability.

In stock trading, investors must have their own investment strategies, strictly adhere to them, and avoid blindly following trends or acting on rumors. Below are some common stock investment strategies:

1. Long-Only Strategy
   Investors buy stocks they believe will rise, holding them until a target price is reached to profit from the price difference. Most stock market investors use this strategy.

2. Long-Short Strategy
   Incorporate securities lending, stock index futures, options, and other hedging tools into the portfolio, including alpha strategies, hedging strategies, and trend-following strategies.

3. Top-Down Investment Strategy
   Investors first analyze macroeconomic conditions and the securities market, then industries, and finally individual companies. Value-oriented investors tend to prefer this approach.

4. Bottom-Up Investment Strategy
   Investors analyze individual companies first, then industries, followed by the securities market and macroeconomics. This involves screening stocks based on quantitative metrics (e.g., revenue growth rate, ROE) before conducting broader analysis. Short-term traders often favor this strategy.

5. Grid Trading Strategy
   Grid trading revolves around a benchmark price, buying at lower trigger points and selling at higher ones. It works best in range-bound markets, not trending ones, and leans toward technical analysis.

6. Right-Side Trading Strategy
   Investors buy stocks when an uptrend begins and sell when a downtrend starts. The advantage is catching strong upward momentum, but misjudgment can lead to buying at peaks.

7. Left-Side Trading Strategy
   Investors buy during downtrends and sell during uptrends, aiming to buy low for higher profits. However, mistiming can result in buying too early ("catching a falling knife").