Write a post-trade review to translate investment thinking into text, clarifying one’s thoughts and combating emotional biases. Trading itself is inherently irrational, requiring us to maintain clarity, objectivity, and discipline. Through recording and reflection, we can systematically examine our decision-making processes, avoiding the pitfalls of emotionally driven choices.
As previously mentioned, last Friday’s sharp decline in US equities and concerns regarding a potential “trade war 2.0” have now settled as the market opened on Monday morning – essentially a “false alarm.” The early trading session saw a stable reaction, a welcome relief.
Index Funds: Executing the Plan
Initially anticipating a significant downturn, I’d added positions in the沪深300 (Shanghai-Shenzhen Stock Exchange 300) and恒生科技指数 (Hang Seng TECH) ETFs on Alipay. However, most of the declines in the trailing market were recovered. Given the relatively small size of the initial capital allocation, I’m not making any additional trades at this time. Moving forward, the index fund’s replenishment strategy 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 within the market.
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, an isolated incident is 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 Kong Tech Index. I missed the initial reaction because I was busy eating and hadn’t switched the Futu App to the news interface. I selected a bottom accumulation zone based on technical analysis and placed a limit order to buy at the next price differential. My plan was to potentially 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
Discipline-Based Trading: This entry was explicitly defined as short-term speculation (“gambling”). Its core objective is: If successful, quickly realize profits and exit to reduce 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 in today’s market rebound.
Looking back at previous trades: Compared to the initial capital planning, the current position is nearing full allocation. Reviewing Meituan and Xiaomi’s transactions from half a month ago, we found that several previous short-term purchases followed by declines, failing to timely stop-loss, and instead irrationally holding onto rebound fantasies, which is a major problem.
The biggest progress in this trading was: being able to “not greedily chase more” for short-term positions; strictly following the trading plan, without blindly investing at unsuitable times to add to the position.