CHAPTER 61: CHAPTER 60 BROTHER LIE IS AWESOME!

Han Lie naturally wouldn’t suffer from stage fright.

Whether others anticipated it, hoped for him to make a fool of himself, or wished for him to triumph, it had nothing to do with him.

Teacher Wu exercised his rights as a teacher and asked questions as usual.

Han Lie answered what he knew, addressing the questions straightforwardly.

That was all there was to it.

He calmly rose, standing perfectly straight, and began to speak with a respectful demeanor and a clear voice.

"Trading patterns are not a clearly defined concept; rather, they are a framework that summarizes a trader’s investment strategy.

So I’m not qualified to judge whether a trading pattern is mature and correct.

I can only talk about what I understand as a trading pattern that can consistently make a profit.

It should consist of the following parts.

First, the trading cycle.

Second, trading techniques.

Third, position management.

Fourth, risk control.

Fifth, trading discipline.

When these five essential elements are organically combined and flexibly adapted according to the market environment, it forms a complete and clear trading system.

If taken individually and used to deal with a specific situation, that is a trading pattern.

Teacher Wu, I have finished my answer."

His explanation wasn’t long, but most of the students were completely confused. Every word was crystal clear, yet the overall message was a muddled mess. It felt like listening to a con artist spout dry, incomprehensible jargon; it was quickly forgotten, like a gust of wind passing by.

CLAP, CLAP, CLAP!

Teacher Wu clapped lightly three times, but no one from the class followed suit.

The others didn’t react immediately; they neither found it brilliant nor impressive and lacked the spontaneous drive to applaud.

To put it plainly, Han Lie’s explanation was too concise and high-level for those with an insufficient foundation to understand.

Teacher Wu understood it. He was a veteran who had actually battled in the markets for many years and, although he hadn’t earned a lot, had indeed developed his own trading pattern.

Therefore, he could deeply understand the thoroughness and value of Han Lie’s brief remarks.

After mulling it over for two seconds, he waved Han Lie over.

"Student Han, please come up and expand on the details."

WOW!

A chorus of exclamations erupted from the class.

They hadn’t understood the five elements mentioned earlier, but Teacher Wu’s implication was perfectly clear—Han Lie knew his stuff!

And for fear that Han Lie would be reluctant, Teacher Wu added another sentence.

"The reward I promised you takes effect now.

If you can make the students truly realize the importance of trading patterns, you can hand in a blank paper with just your name on it at the end of the term, and I’ll give you 95."

With a BANG, the classroom erupted completely.

The freshmen were still unclear on how lenient the exams in liberal arts subjects could be, still fearing failure.

With that statement, Teacher Wu meant that Han Lie was exempt from one of his major subjects.

They finally realized how awesome Han Lie was.

Though Brother Lie had only shared an overview.

Amid the many admiring, hopeful, and envious gazes, Han Lie reluctantly left his seat.

Then, surrounded by whispered discussions, he made his way to the podium.

Teacher Wu patted his shoulder affectionately and encouraged him with a "Go for it."

Brother Lie was rather troubled.

"Teacher Wu, this is too advanced..."

Teacher Wu smiled with a hint of amusement, "I believe in my students. You can do it, and so can they."

Am I some kind of expert?! Pfft! Am I even normal?! I can do it, but they genuinely might not...

Han Lie didn’t hold any hope for this sharing session.

But since he had been put on the spot and happened to have some thoughts and summaries, he might as well lay them out to test and verify.

As for whether the students could understand... That’s none of my business!

Han Lie turned to face the audience. The 120-seat lecture theater wasn’t particularly large, but the back row was already well above the podium.

Most of the students from the finance and accounting classes were present: fewer than 40 boys, nearly 80 girls.

A glance over the scene, and it was quite a sight.

The classroom was not quiet.

The girls were chattering like a flock of ducks, unstoppable once they got wound up.

Some of the boys were excited, their faces reddening as they rooted, "Go Brother Lie!"

Others were green with envy, quietly venting thoughts like, "He really knows how to show off."

Han Lie gave a slight smile, showing off his pearly whites.

He didn’t treat it too casually, nor did he make a big deal of it, simply beginning to speak calmly.

"As I mentioned during my self-introduction in class before—

"I hope to accumulate my first pot of gold in the vast and turbulent market, then to realize my personal value, and ultimately, become a wealthy person who is both tacky and kind.

"This is certainly not easy, but I am willing to put in the effort.

"Also, I hope to receive everyone’s encouragement and help and look forward to walking with like-minded partners.

"Now, I will prove the effort I have put in for my dream, and once again, I extend my invitation to those who aspire to this.

"A mature and complete trading pattern, detailed as follows—"

Han Lie casually picked up a piece of chalk and turned to write on the blackboard.

His handwriting was sloppy and casual, just like his actions at the moment.

Being casual doesn’t equal being cool, but being nonchalant definitely equals charm.

At this moment, Han Lie shone brilliantly.

"First, the trading cycle.

"It is the core of the trading pattern. Only after we have determined our operational philosophy and time cycle for the upcoming period can we start filling in the details step by step.

"Trading cycles are generally distinguished by the length of time the stocks are held.

"From shortest to longest, they are—

"Ultra-short-term: overnight trading.

"Short-term: holding a trade for less than a week.

"Medium-term: holding from over a week to under three months, commonly referred to as ’playing the swings’ in the market.

"Long-term: holding positions for the long run, classically defined as value investing, which in the A-share market is often simplified to ’playing the trend’.

"Determining the holding time is like setting the overall framework for the entire trading pattern.

"Only then can we plan all subsequent steps.

"Second, trading techniques.

"With different trading cycles, the buying and selling techniques must change accordingly.

"For ultra-short-term trading, you need specialized techniques for ultra-short-term trades.

"For example, how to determine entry and exit points, which demand very strict technical requirements.

"A slight issue when buying, a small mistake when selling, and a 3% profit can vanish, possibly turning a gain into a loss.

"But the advantage is, with ultra-short-term trading, you basically only consider three factors: the stock’s short-term technical indicators, overall market sentiment, and the stock’s profit-generating momentum.

"You completely ignore long-term elements like macroeconomic changes, industry prospects, or the stock’s fundamentals.

"Long-term trading, on the other hand, is the opposite.

"Entry points don’t need to be as strict or precise, but you must study macroeconomics, industry information, stock fundamentals, and company financial statements.

"Trading techniques are where we need to learn the most, requiring significant and strenuous effort.

"I will not expand on this here.

"Third, position management.

"The gist is very simple—

"When market sentiment is poor, exercise restraint and hold cash.

"When you’re not confident, maintain a light position.

"When the overall market trends upwards, be bold and hold a heavy position.

"But it’s always best to never be fully invested; leave some room for performing ’T’s.

"Managing your position well is the first step in overcoming human nature.

"Fourth, risk control.

"It’s not related to position size, but to diversification.

"Position size refers to what percentage of your capital you invest in stocks.

"Diversification means how many different stocks you use that capital to buy.

"The purpose of diversified investment is to spread risk. Even top experts pay great attention to diversification. Unless dealing exclusively with ultra-short-term trades, diversifying risk is an eternal need.

"Another focus of risk control is setting take-profit and stop-loss points.

"The requirements for take-profit and stop-loss differ drastically between ultra-short-term trading and trend following.

"Typically, long-term positions can withstand higher profit retracement, but the stop-loss point should not exceed 30%.

"If the stock price has fallen by 30%, it proves that your purchase logic was completely wrong. The most rational course of action is to admit defeat and exit.

"Fifth, trading discipline.

"Now, we already have a complete model prototype. Next, it’s best to set aside some time to test the model’s accuracy in a simulated environment.

"If it’s not accurate enough, quickly identify the problem.

"Identify problems and fix them promptly until the success rate reaches above 60%, the higher the better.

"At this point, the trading model is fully formed.

"Facing any situation, we have a set of predetermined procedures in place to deal with it.

"Then, only the hardest and most important thing remains, four words: strict implementation.

"Decisively buy when it’s time to buy, decisively sell when it’s time to sell.

"Hold a cash position when you should, cut losses when you must.

"How do those who end up becoming shareholders via trading turn into leeks?

"They either lack discipline, or they have it but fail to adhere to it rigorously.

"That concludes the explanation of the trading model, and I thank Teacher Wu for giving me this opportunity.

"Lastly, let me add two more things off-topic.

"The Huaxia stock market has always been divided by the 721 rule: 7 lose, 2 break even, 1 earns.

"At first glance, it seems terrifying.

"But given the vast number of stock investors, those who make money still represent a substantial figure.

"How do they make money?

"They have a model; they follow discipline.

"How do leeks lose money?

"They rush into the market completely clueless, in the dark.

"Today they listen to so-called inside information, tomorrow they learn someone’s ’surefire strategy.’ They’re easily fooled and always confused.

"No common sense, no resolve, no methods, no determination.

"If they don’t lose money, who will?

"However, it’s precisely because there are so many such leeks that there’s space for us to show our talents.

"Respect the market, revere trends, master the right methodologies, and making money is truly not difficult.

"Fellow students, let’s encourage each other."

Han Lie took a step back, bowed slightly, and walked down from the podium.

Teacher Wu nodded in satisfaction, his face beaming with a smile. He had just raised his hands, about to lead the applause when a thunderous round of applause and cheers suddenly erupted from the audience.

The raspy voice, like paper being rubbed together, was the first to sound. Following closely, Fang Feifei and Yu Yun joined in enthusiastically.

The cheers were a jumbled mess, but those four words remained clear—

"Brother Lie is awesome!"