“Buy low, sell high! That’s how you make money.”
Is that right? No, it's wrong.
This is just a common cliche that people who have suffered losses always chant.
There are things that should not be done in the stock market, but there is a misconception that they must be done.
For example, to fully understand the economic and industrial development situation, you should carefully read the economic sections of newspapers and magazines, watch economic news on television in the evenings, or listen carefully to the advice of a well-dressed stock market expert.
Investors believe that's how they'll make money, but that's never going to make their pockets any fatter.

--- p.21

The first thing to note is the high-low-closing peaks of each price.
After all, reading the stock price trend is the most important thing.
Stock prices follow certain patterns over time.
This pattern is a clue that can help us predict how the stock will move in the future.

The second thing to look at is the stock trading volume for that week.
It is a very desirable phenomenon for trading volume to increase when the stock price rises and decrease when the stock price falls.
As I mentioned before and will emphasize often in the future, it is very good to see increased trading volume at the breakout point.
The huge volume leads to urgent and certain buying, which significantly increases the stock price.

--- p.49

There are other favorable times to buy new stocks.
That's when a stock that has clearly been on the rise in the second stage returns to near the MA and undergoes several corrections.
Soon, the stock breaks above the resistance area again and rises. Buying stocks at the end of a correction near the MA is called "persistent buying."
Of course, there is a trade-off here too.
In this case, there is a very high possibility that a steep upward trend awaits, but there are also many risk factors.
This type of buying is more suitable for traders than investors.

--- p.97

Let's go back to Chart 4-1.
Let me explain why this stock is only a B-. When XYZ stock shows signs of strength, breaking above the resistance level of 15, you should look to see where the next resistance level will form.
The next resistance level will be 18, which was previously support.
Remember, once a support level is broken, it becomes a resistance level when the stock price rises. Even if XYZ stock breaks through this resistance level and rises, it will struggle to reach 20.
So, between 18 and 20 is likely to be the next resistance area.
Of course, that's not to say that stocks will never overcome this area.
But that requires enormous purchasing power.
So it's easy to stay in this area for a long time.

--- p.139

The second element to look at is the RS line.
This is a metric that distinguishes between "just good" stocks to buy and "very good" stocks.
In a chart pattern that could be a big fish, the RS line should be in the negative area or close to the zero line.
And when a breakout to level 2 occurs, the RS line should clearly move into the positive zone.
This is really important. As I mentioned earlier, if the RS line is steadily rising and all other factors are positive, you can buy the stock even if the RS line remains in negative territory.
However, when looking for a truly special big fish, there's no room for compromise. If the RS line remains in negative territory, even if the stock is a good buy and could generate decent profits, it won't be a big fish.

--- p.211

Okay, now focus.
When buying stocks, volume is very important when there is an upward breakout.
Never buy on a breakout that is not accompanied by significant volume.
If you buy a stock and there is no confirmed trading volume, you should sell the stock during the initial rise.
From a short selling perspective, it's completely different.
While it's nice to see a significant increase in volume and confirmation of a downtrend, volume isn't essential to winning a short position.
It takes force to raise a stock, but when a stock falls, it can fall under its own weight.

--- p.303

Now you can plan your game.
I hope you don't overlook the importance of planning.
If you follow my tactics and adhere to the rules I've outlined, you'll never find yourself in trouble like other investors.
Although double losses do occur occasionally, you don't have to worry about losing your invested money or losing your financial assets.
By diversifying your portfolio (both across individual stocks and industries) and using mechanical orders wisely instead of being stubborn, you can protect your assets. Even if you lose a small amount of your investment, it will only be a minor headache, not a financial disaster.
The important thing is that when you make a profit, you can achieve very satisfying results by hitting home runs rather than singles.

--- p.422