The only idea to break the vicious circle

I quote passages from the book "Chugen Sen Kenta Ho" (Middle Source Line Positioning Method).

Triggered by some news, one thinks A-shares will soar and may become a big fortune, so they buy. However, the movement of A-sharescontradicts expectations, and they are forced to keep them salted away.

With the next news, they buy B-shares, then C-shares... and gradually their holdings increase.

After all funds are exhausted, they dispose of stocks with smaller downside and buy new ones. Stocks that rise to some extent are sold for a certain profit, but after selling they surge dramatically.

They always hold only the stocks that have been pulled down, and when the market improves, they sell the ones that ride the trend with an appropriate profit, in other words, they end up selling when the initial expectation of a “big boom” has actually begun to materialize.

They let go of the stocks that ride the market trend and feed the ones that are sinking into their holdings, continuing efforts toward "deterioration of holdings" and ending up with a life of such investments.

If they are using margin trading or commodity trading, the above progression appears in a short period, and a further increase akin to “payment on the thief” is added.

This kind of investment attitude is common among amateurs who view trading methods as conceptual; while individual tendencies vary somewhat, there are few exceptions. Therefore, simply getting out of this can already be considered that you have reached the beginner level of skill.

It is fine if even amateur shogi is interesting, but in the market that will not suffice.

(From the first part commentary of the “New Edition of Chugen Sen Kenta Ho”)

For example, if you buy into ten stocks at once, the subsequent movement will split into stocks that firm up and those that stay weak. The firming stocks exit with a small profit, while the weak ones are maintained. If they weaken further, you think “this is bad...,” and if they drop more, you end up buying more in a blue mood...

The opposite approach, that is, to quickly discard the weak stocks and ride the strong ones, is the correct course, although people tend to do the opposite—this is the “market common sense,” I think.

As stock prices approach their peak, a sense of security that “this is good” arises, and market participants naturally feel that while prices are crawling at a low, rising is near, they think “not good” and act accordingly. Regardless of skill level or experience, many feel the same.

However, to make a profit, you need to move in the opposite direction.

Thus there is also the idea of “let's work hard and act contrary to our feelings,” but such an effort is just a big plus if you can manage one or two times and certainly does not last long.

In the quotation, there was a keyword "trading method."

To break the vicious circle, there is no other way.

The term can be “method,” “trading method,” or “approach”; anything is fine.

A concrete approach, namely, forecasts, positions according to that forecast (position management), and capital management to balance the overall portfolio—these three form a systematic “methodology.”

It is not about seeking the “correct answer” of “which stock will rise?” or “what should I buy?” but about considering which kind of method for continuing position management suits you best—that is the true correct answer.