Core Viewpoint - The article discusses the challenges faced by retail investors in the stock market, highlighting the information asymmetry between institutional investors and retail investors, which often leads to poor investment decisions and losses [1][4][12]. Information Asymmetry - Institutional investors have professional teams that quickly analyze news and reports, while retail investors often react to outdated or misleading information, leading to poor timing in buying and selling stocks [1][4]. - Retail investors frequently misinterpret financial reports, leading to decisions based on superficial data rather than a comprehensive understanding of a company's financial health [3][8]. Emotional Trading Behavior - Retail investors often exhibit emotional trading patterns, such as selling at small profits out of fear of losing gains or holding onto losing stocks in the hope of recovery, which can lead to significant losses [5][6]. - A study indicated that retail investors have a less than 30% success rate when buying at price limits and a higher than 60% chance of rebound when selling at price limits, showcasing the pitfalls of emotional trading [6]. Financial Analysis Challenges - Retail investors struggle to analyze financial metrics effectively, often overlooking critical indicators like cash flow and debt ratios, which can lead to poor investment choices [8][12]. - The article suggests focusing on key financial indicators such as net profit cash content, debt-to-asset ratio, and changes in gross margin to make informed investment decisions [8]. Psychological Traps - Two main psychological traps are identified: the hope effect, where investors believe they can recover losses, and the unwillingness to accept losses due to seeing others profit, leading to poor decision-making [9][10]. - The article emphasizes the importance of recognizing personal limitations and suggests that if investors lack the time or tools for research, they should consider safer investment options like index funds or ETFs [10][12]. Strategies for Improvement - To overcome these challenges, retail investors are encouraged to adopt structured trading rules, utilize analytical tools for real-time information, and develop a disciplined approach to trading [4][6][12]. - The article advocates for a shift from amateur to investor thinking, emphasizing the need for information, tools, discipline, and rationality in trading decisions [12].

Core Viewpoint - The article discusses practical strategies for stock trading, focusing on the importance of understanding signals for both adding and reducing positions in the market. Group 1: Adding Positions - The first signal for adding positions is that the pullback should not exceed one-third of the previous rally's gain, indicating that the stock still has potential for rebound [3]. - The second signal is that trading volume should decrease to below 60% of previous highs, suggesting that selling pressure has been largely absorbed [3]. - The third signal is that at least 30% of stocks in the sector should be showing strength, indicating overall sector momentum which increases the likelihood of individual stock gains [3]. Group 2: Reducing Positions - Reducing positions requires a counterintuitive approach, as many retail investors tend to be greedy, often waiting for higher returns and risking losses [5]. - A dynamic stop-loss strategy is suggested, where a third of the position is sold if the stock deviates more than 15% from the 20-day moving average, and half is sold if it deviates by 25% [5]. - A significant increase in daily turnover, exceeding twice the average of the past 30 days, is a warning sign to exit positions, as it may indicate that major players are offloading shares [5]. Group 3: Information Disparity - The article highlights that even with positive news, stock prices may stagnate due to information asymmetry, where institutional investors may have access to negative information before retail investors [8]. - It emphasizes the importance of utilizing tools to mitigate the risks associated with information gaps, which can be a significant cost for retail investors [8].