Write a wrap-up record to translate investment thinking into text, clarifying one’s thoughts and resisting emotional biases. Trading itself is anti-human, requiring us to maintain clarity, objectivity, and discipline. Through recording and review, we can systematically examine the decision-making process, avoiding emotional pitfalls.
As previously mentioned, the sharp drop in US equities on Friday last week, and concerns regarding a potential “trade war 2.0,” have now settled as the market opened this Monday – essentially a “false alarm.”
Index Funds: Executing the Plan
Initially anticipating a significant downturn, I added positions in the沪深300 (Shanghai-Shenzhen Stock Exchange 300) and恒生科技指数 (Hang Seng TECH ETF) through Alipay. However, most of the declines in the trailing market were recovered. Given the relatively small size of the initial capital allocation, I will not make any additional operations for now. Future index fund replenishment strategies will be more conservative and gradual, primarily utilizing fixed-income plus products for asset allocation.
Hong Kong Stocks: Rapid Response and Disciplined Trading to “Black Swans”
Based on the current Hong Kong stock positions, if further declines persist, we will need to deploy new funds into trading.
Xiaomi Event and Cognitive Correction
Today, Xiaomi experienced a “black swan” event: a fatal car accident involving one of its electric vehicles. My initial cognition was that the volume of traffic accidents is massive, and given the increasing vehicle fleet size for Xiaomi, isolated incidents are a matter of probability. As long as subsequent investigations rule out design flaws in the vehicle itself, the long-term impact on the stock price should be manageable.
This morning, Xiaomi’s decline was significantly greater than that of other stocks in the Hong Seng Technology sector. I missed the initial reaction due to being busy eating and not switching the Futu App interface to the news section.
Based on technical analysis, I selected a range I considered a dense accumulation zone for potential bottoms, placing an order to buy at the next price differential. My plan was likely to wait for tomorrow’s traffic police notification, but unexpectedly, the investigative results were released in the afternoon – the driver involved was suspected of drunk driving and speeding. This news caused the stock price to rebound sharply.
Trading Summary: Reinforce Discipline
Disciplined Trading: This entry was explicitly defined as short-term speculation (“gambling”). Its core objective was to: If successful, quickly realize profits and exit with minimal risk to lower the average cost of existing holdings; If unsuccessful, decisively cut losses and exit. The original plan was to fulfill it today or tomorrow, ultimately completed within today’s market rebound.
Looking back at previous trades: Compared to the initial capital planning, the position is now nearing full allocation. Reviewing Meituan and Xiaomi transactions from half a month ago, we found that several previous short-term purchases followed by declines, failing to timely cut losses and instead irrationally holding onto hopes of recouping losses, which is a significant problem.
The biggest progress in this trading was: being able to “not greedily chase profits” with short-term positions; strictly adhering to the trading plan, without blindly adding to positions at unsuitable times.
Transaction Fees for Short-Term Trading
In the past, during the development of brokerage systems, I had extensively researched transaction fees but never carefully considered their impact from a trader’s perspective. It wasn’t until today, when conducting a standard T+0 turnaround trade, that I deliberately calculated the returns and clearly realized that Hong Kong stamp duty (one-tenth of the transaction amount) is the largest component of trading costs.
Looking back, my career began in developing brokerage systems for Hong Kong and US stocks. I deeply understood the importance of transaction fees within the system, but lacked firsthand experience as a trader regarding whether they were more or less, nor did I ever delve into how the Hong Kong Exchange (HKEX) generated profits as a listed company. When opening HKGS (Hong Kong Gold Shares) at the beginning of the year, my investment goals remained focused on the Hang Seng Tech Index without considering buying shares in HKEX itself. This mindset resembled a stubborn “wherever I fall, I’ll stand up” attitude.
It has been proven that limited knowledge framed the initial investment choices. Considering that the Shanghai and Shenzhen Stock Exchanges, both under the China Securities Regulatory Commission, are not listed companies, I had actually considered similar industries – domestic brokerage firms. Choosing a brokerage firm was primarily guided by the media narrative of “market makers,” but if comparisons were made, exchanges as market infrastructure have inherent scarcity and monopoly characteristics, undoubtedly making them a better choice than brokerages.