We often hear a saying, "Buy low and sell high in the stock market."

This is a statement that is 100% correct and also 100% classic and useful.

But if we think carefully, in reality, how do people lose money? It's by buying high and selling low.

That is to say, in reality, most people's trading is in direct contradiction to the theory of buying low and selling high.

This is also why the phrase "buy low and sell high" is the most useless, because it cannot be achieved.

There is nothing wrong with buying low and selling high, but buying high and selling low may not necessarily be wrong.

Because we cannot accurately judge what is high and what is low, what if there is a lower point after a low point?

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Panic can lead to wrong decisions, choosing to blindly cut losses.

But cutting losses itself may not necessarily be completely wrong, because not cutting losses may lead to increasing losses.

Thus, retail investors fall into confusion, how to really buy low and sell high, and if they encounter losses, what should they do?Should it be waiting, or should it be cutting losses, which is the right one?

Selling high and buying low has become a sorrow that cannot be cut off, and the more you try to manage it, the more chaotic it becomes.

What can we learn from this seemingly useful but actually useless saying?

Firstly, when buying stocks, a low price is the key.

No matter what stock you buy, if the price is high, you will still lose money.

Even the widely recognized super bull stocks will have the day when they hit the ceiling.

Anyone who chases high positions will face certain risks.

When buying stocks, a low price is the key. No matter how good the ticket is, once the price is high and becomes a bubble, buying it means losing money.

So, never believe that some stocks will keep rising. Most of the time, when retail investors know about it, it's the time to take over the position.There is no need to completely dismiss some stocks, as long as the price is low enough, it will attract the attention of capital.

There is a slight difference between stock trading and investing. Stock trading can accumulate profit margins through continuous transactions, but most investment transactions do not have such a high frequency, and the trading methods are not as convenient.

Good products and good prices are the keys to making money.

Secondly, when selling stocks, it is important to take profits when available.

There is an essence to selling high and buying low, which is the courage to sell high without fear of missing out.

Many people are afraid to sell even when they make a profit because they are afraid of missing out, afraid that the stock will soar after they sell.

Taking profits may seem like losing the watermelon and picking up the sesame, but in the stock market, having a sesame is better than having nothing at all.

Many times, after taking the elevator, the final result is to lose money and exit.

It is said that those who know how to buy are apprentices, and those who know how to sell are masters. Only by securing profits can one be considered wise.

Therefore, do not ridicule those who make a little profit by selling high and buying low. Being able to make money means being much stronger than 70-80% of people.Timely profit-taking is also a very important part of trading strategy.

Thirdly, trading in waves is more secure than holding onto a big trend.

Firstly, let me emphasize that being secure does not mean making more money, but rather it represents a lower level of risk.

Accumulating small profits through wave trading may not necessarily yield more than holding onto a big trend.

However, holding onto a big trend requires not only patience but also the ability to analyze long-term trends and comprehensive predictive skills.

We all know that holding onto a big bull stock can make a lot of money, several times over.

But actually, very few people can truly hold onto it because it's easy to get off halfway.

But wave trading is different; it does not require long-term holding, just the accumulation of profits bit by bit.

Wave traders are also less likely to experience the "elevator effect," and in those volatile markets, at least they can make a profit.

Except in a big bull market, where the returns might be lower, most of the time, flexible position allocation can bring good returns, and the risk is relatively lower as well.Prudence is a synonym for swing traders who sell high and buy low.

Why does the strategy of selling high and buying low go wrong?

You buy stocks according to the concept of selling high and buying low.

But once you buy, the price starts to fall, and the low point you thought you were buying at turns out to be a high point.

This phenomenon is very common and happens almost every day.

There is a problem that you cannot solve, and no one can solve it, which is buying at an absolute low point.

As mentioned above, you can wait patiently to find a relatively low point to enter the market, and timing is more important than stock selection.

Mistakes are inevitable, and the only way is to try to reduce the chances of making mistakes and the losses caused by mistakes.

The corresponding method is actually relatively simple, but it requires a certain degree of execution.First, position control, build positions in batches when opening positions.

To do a good job of selling high and buying low, you must control your positions well.

No one can accurately judge the highs and lows, but you can try to find the high and low points of the market by building positions in batches.

Therefore, entering the market in batches can buy a relatively lower price range, which will be more reliable.

Generally speaking, dividing the position into 3-4 parts, and adding a position each time the price drops by about 10%, is a reasonable approach.

Some retail investors' so-called position division seems to be a dispersion of positions, but in fact, it is still firing all bullets in a short time, and the buying points of the stock price are very concentrated, which does not achieve a good effect.

Second, refuse greed, take profits in batches and secure them.

It is obviously unrealistic to want to sell at the high point.

So, selling high and buying low must be done in batches, and the settlement should be done in the high price area.

Sell a little when there is a profit, and put a little money in your pocket when there is money to be made.People who are not greedy tend to reap some rewards in the strategy of buying low and selling high.

Sometimes, it's just too greedy, and the duck that was about to be eaten flies away.

Thirdly, understand the trend to avoid a continuous decline.

The only way to lose money in the buy low and sell high strategy is to choose a stock that is continuously falling.

For this kind of stock that is continuously falling, no matter when you buy low, it is a mistake.

This is a trend issue, and a downward trend has no bottom.

That is to say, in this trend, the position where you buy stocks is always a high position, and there is no so-called low position.

The more you buy, the more you fall. If you encounter a downward trend, it is an abyss.

So it is very important to have a simple prediction of the bottom range of individual stocks and avoid stocks in a downward trend.

Fourth, stay away from the explosion to avoid disaster.There is a type of low-absorption strategy that is not highly recommended, especially for stocks that have experienced a sudden crash, often referred to as "explosive stocks."

Although these explosive stocks may have a demand for rebound after a sharp decline, it is not the case that all stocks will rebound; some may continue to fall straight down.

Once a stock has exploded and starts a one-way downward trend, there is no longer any high-selling and low-buying strategy to speak of. If the stock is delisted, it is a disaster from which there is no recovery.

Therefore, stable performance is also one of the prerequisites for high-selling and low-buying strategies.

High-selling and low-buying is a simple trading strategy, and as a trading strategy, it must have corresponding rules.

How to select stocks, what is considered low, what is considered high, when to take profit, and when to cut losses, all must be part of the trading system.

Otherwise, high-selling and low-buying becomes an empty phrase, or even nonsense, with no meaning or value at all.