Human Nature

There are three ways to make money: by hand, with the brain, or with the money. Hand-earned money is hardly worth the effort. Not everyone can make money with their brains (include scientists). The real money is made by using money. To make money with money, there are two prerequisites, (1) you have to have money, (2) you have to know how. Stock market provides such a perfect opportunity for those who have money and know how to make them.

Stock market requires a small entry fee. You can play big, or you can play small. It does not ask for a PhD before you can buy stocks. The stock market is a place for people like me (poor families with children) to make money with money, thus make a living.

Survivors! -Experience

I have friends decided to try stock market full-time so that they don’t have to deal with bosses and office hours. Trading stocks for a living! They have their masters or PhD, so they must be somewhat intelligent. Unfortunately, they only survive in this business for a few months without exception. I often think why do these extremely intelligent friend fail? I can summarized to two things: First, the skills of stocks changes; Second, they are too smart, too many choices.

Skill is needed to play stock. The skills are accumulated through experiences, and the accumulation process is difficult and painful. Therefore, lazy and inpatient cannot survive this process. In science, you learn a technique, you can repeat the experiments, However, stock price up-and-down can be different every time. You must develop a feel for the stock through experience.
Human nature vs experience
The most important principle of stock market is stop loss. Human nature refused to take the small loss because of greed. The refusing of taking small losses can eventually turn into a major loss. Then you can finally learn not afraid to eat the small loss. The process of learning to overcome the “greed” and other innate human nature develop experiences. This learning process is not as simple as most people imagine. This requires change of attitude and change yourself. Change is not easy. This is why smart people are not good at stock sometime. They can overcome the natural, but they often cannot overcome their own self.

Man have many faults, some are basic instinct, and some are habits. The stock market has its own characteristics. In the stock market man faults are manifested.