Understanding Stock Trading Principles and Market Trends

Victor Sperandeo emphasizes capital preservation and consistent profits as keys to successful trading.

### Victor Sperandeo's Trading Philosophy: Capital Preservation, Consistent Profit, and Seeking Higher Returns
* 📈 Victor Sperandeo, a legendary trader who achieved an **annual return of 72% over 18 years without any losses**, emphasizes three key principles in his trading philosophy: **capital preservation, consistent profit, and seeking higher returns**.
* 📊 "My trading goal is **financial stability**. For independence, I consistently **earn money every year**, so I think of trading as a **business**."
* 📉 Sperandeo stresses the importance of risk management, advising traders to "first ask **how much loss can be tolerated**" before considering potential profits. He recommends a risk-reward ratio of **at least 3:1**.
* 📊 "When starting a profit trade, since there is no accumulated profit, the size of the initial position should be **small**. Additionally, the stop-loss price should be predetermined, allowing one to acknowledge mistakes early and **liquidate the position to realize the loss**."
* 📊 Sperandeo's trading strategy involves capturing **60-80% of medium and long-term trends** by accurately identifying trend reversals. He uses a combination of trend lines and the **"two-be rule"** for this purpose.
* 📊 "In an upward trend, if a new high is established but fails to continue rising and then breaks down below the previous high, it can easily indicate a **trend reversal**."
* 📊 Sperandeo also utilizes technical indicators such as moving averages, relative strength, and oscillators to confirm his trading decisions, but emphasizes that these indicators should be used **cautiously and in conjunction with other methods**.
* 📊 "The chart reveals everything." Sperandeo emphasizes the importance of closely monitoring **price movements and candlestick patterns** to confirm **potential trend reversals** indicated by technical indicators.

### Comprehensive Trading Strategies: A Hybrid Approach to Technical and Fundamental Analysis
* 📊 Combining technical and fundamental analysis can enhance trading success, with many profitable traders following a **hybrid approach**.
* 📈 Use technical analysis to identify **trends and potential reversals**, such as through **trend lines** and the **Two-B rule**.
* 💹 Implement fundamental analysis to select individual stocks, considering factors like **P/E and P/B ratios**, **earnings growth**, and **market conditions**.
* 🏛 Understand the impact of government policies and economic cycles on the market, **predicting trends** based on these factors.
* 📚 Establish and follow trading principles, including **risk management**, **trend following**, and **profit-taking strategies**.
* 📉 In bear markets, buy at the **bottom of the trading range** and sell at the **top**; in bull markets, do the **opposite**.
* 🎯 Set clear **profit and stop-loss targets**, and always use **stop-loss orders** to protect against **large losses**.
* 💡 "To make money in the economic market, understand the attributes of government policies, market interventions, and economic cycles, and their **impacts**."

18년간 단 한해도 손실없이 연 72% 수익 낸 전설의 주식투자 기법

확률 높은 주식투자 방법을 공부하는 곳입니다.

출연 / 협업 문의 : top_trader@naver.com



하승훈의 주식투자TV

The Path to Financial Freedom Through Stock Trading

The goal of studying stocks is to create a stable income and achieve financial freedom, as exemplified by Victor Sperandeo's legendary 72% annual return over 18 years.

The author's book aims to provide a comprehensive understanding of the market and successful trading strategies, drawing from personal experiences and unique techniques.

The three fundamental principles of the author's business philosophy are capital preservation, consistent profit, and seeking higher returns, with a focus on risk management and absolute returns.

Starting with a small initial position and a predetermined stop-loss can help manage losses in trading.

If a trade is successful, it's important to set aside some profit while increasing the next position.

Understanding market trends and capturing turning points is crucial for maximizing profits and minimizing losses.

The best entry points for speculators are at the bottom of medium-term downtrends or after bear markets, while exit points are at the peak of bull markets or medium-term corrections.

Trend line analysis is crucial for judging trends and capturing reversals, with three key conditions indicating a trend reversal: trend line breakdown, failure to break previous highs or lows, and a bounce back at the previous adjustment low.

The two-be rule offers a faster way to identify trend reversals, and using it effectively can lead to profitable trading opportunities.

Key Indicators for Trend Analysis in the Stock Market

Moving averages, particularly the 200-day moving average, are crucial for confirming long-term trends and stock selection.

The golden cross and dead cross techniques with 10-day and 30-day moving averages provide buy and sell signals.

Relative strength and oscillators are also used to identify strong stocks and predict trend reversals, with a focus on using them as auxiliary indicators rather than relying solely on them.

Basic Analytical Indicators for Stock Trading

The PER and PBR are used to assess whether a stock is overbought or oversold by comparing them with the market index and the stock's performance.

Earnings growth is analyzed for a three-month lead on stock prices, and buying or selling decisions are made based on price volatility and earnings growth rate in different market conditions.

Trading principles are emphasized for controlling emotions, setting goals, and preparing for various market scenarios, while also highlighting the importance of patience and limiting the number of stocks to focus on.

Strategies for Successful Trading and Investing

Effective trading involves using stop-loss orders, taking free positions, and adjusting stop-loss points as the risk-to-reward ratio changes.

Long-term investors should buy in bear markets and sell in bull markets, while also being open to short positions.

Understanding market trends and their interplay is crucial, with a focus on long-term trends for investment and short-term trends for trading opportunities.

Understanding Long-Term and Medium-Term Trends in Markets

Long-term trend identification is crucial for successful speculation and investment.

The characteristics of medium-term trends reversing long-term trends have remained consistent for over fifty years.

Bear and bull markets exhibit distinct phases and patterns, with secondary adjustments playing a key role in reversing long-term trends.

Understanding Market Adjustments and Trading Principles

Technical adjustments in stock prices typically last less than two weeks and are not related to economic fundamentals.

The business philosophy of trading emphasizes capital preservation, risk-reward ratio, and absolute returns.

Different trends in the market, along with techniques for capturing trend reversals and using auxiliary indicators, are crucial for making informed trading decisions.