Stable compound returns: a practice of "defying human nature," casually documented

On Saturday, I casually jot down stock sentiment, follow-through, market movements—nothing much worth recording. Just go with the market trend and enjoy the fun of compound interest. Investing and financial management are themselves a bonus, a form of self-cultivation!

Posting and recording casually—write whatever comes to mind!

Spring is coming soon for the main upward trend.

[Taoguba]
Finding the path to “stable compound interest” in a volatile market: A trader’s practical thoughts

Recently, the big A-shares have returned to the familiar “jumping up and down” rhythm. The index seems to fluctuate at high levels, but individual stocks are highly differentiated. Chasing highs easily leads to being trapped, cutting losses feels unwilling. Many traders are asking: in this kind of market, is it possible to achieve “stable compound interest”?

As a trader with years of experience, having gone through bull and bear markets, stepped on mines, and caught major upward waves, I want to say: stable compound interest isn’t about predicting the market, but about building a repeatable, executable trading system that can cross cycles.

Let’s explore in depth

Face reality: The “normal” state of A-shares is volatility
First, accept a fact: A-shares have never been a “steady rise” market. Instead, it’s a “short bull, long bear, frequent fluctuations” market. In 2025, we saw a “tech revaluation bull,” with the ChiNext index rising nearly 50%, but in the first quarter of 2026, the market entered a phase correction. The Shanghai Composite oscillates between 3900-4000 points, with increased volatility in the STAR Market 50 and Northbound funds.

What does this mean?
It means “holding on stubbornly” doesn’t necessarily make money, and “chasing highs and selling lows” likely results in losses.

True compound interest isn’t “holding forever,” but “making funds move within controllable risk.”

Focus on core bullish trends and arbitrage patterns, good emotional entry for continuous breakout plays, position rolling methods—let your positions “come alive.”

Base position + swing rolling + risk control to lock in profits—forming a closed loop

Selection criteria: Picking quality stocks is crucial; only the right stocks make money. Wrong choices, even with effort, are futile.

Position building: For trend core stocks with high recognition, initially allocate 30%. Once the main upward trend forms with sufficient volume, gradually add to the position. Once the core trend is established, don’t worry about retreating. Having experienced many double-trend stocks, if right, hold and continue compounding. When volume increases near a pullback at high levels, lock in profits. During minor shakeouts, if volume breaks previous highs, add to the position; ensure maximum gains.

Mindset: Don’t greedily sell at the highest point; aim to “profit within a certainty zone.”

Avoid some pitfalls:

1. Full position all-in—deciding your fate in one shot
   Full position = no retreat. If a correction occurs, your mindset may collapse, risking being caught at lows. It’s recommended to keep total holdings at 50-60%, with 20-30% cash reserved, ready to attack or defend.

2. Chasing hot topics and themes, lagging information leads to buying at the top, focus on clarity of recognition
   Hot topics come quickly and go faster. By the time you see “good news,” the main players may already be offloading.

3. Frequent trading, the more you move, the more you lose
   Watching the market daily and switching stocks often erodes profits through fees. Data shows 60% of the time should be in cash, only acting at key support levels or when volume dries up.

Long-term perspective: The essence of compound interest is “fewer mistakes”
True compound interest isn’t about doubling every year but about steady annual returns that grow over 5 or 10 years.

• Large funds catch a few main upward waves and key trends annually, earning profits.
• The rest of the time, use swing trading to increase returns.
• Strict stop-loss to avoid big losses.

With this approach, even in a choppy market, your account can steadily grow.

Sharing some insights with fellow traders and friends

Invest with spare money, avoid leverage
Money for stocks must be disposable, not affecting your life. Borrowing to trade is self-destructive.

Record trades and review regularly
Summarize lessons learned: Why buy? Why sell? What was the outcome?
Reviewing helps identify emotional weaknesses and gradually build trading discipline.

Find your rhythm
Some are suited for short-term trading, others for long-term. The key is: keep the system simple, repeatable, and sustainable.

I’ve seen the most successful traders aren’t the most technically skilled, but the most “dumb” and disciplined.

Withdraw profits timely, grow through compound interest, and control drawdowns

Stable compound interest is a “counter-human” discipline
Markets are always volatile, human nature swings between greed and fear.
But as long as we:

• Control position sizes,
• Strictly follow discipline,
• Focus on certainty,
• Maintain a long-term perspective,
  we can carve out our own path of compound growth amid market fluctuations.

Finally, a personal motto:
“Trading stocks is like cooking—if the procedure is wrong, everything is pointless.”
May we all earn steadily and grow wealth slowly in the A-share market.

Sharing my simple arbitrage strategies—just a brief note, not detailed.

Main upward trend trading

My trading rule:
If you choose the wrong direction, the farther you go, the more you get hit.

Don’t look for some secret path—there’s no shortcut. If there’s no clear route, you’ll either go in circles or go the wrong way. Learning technical analysis isn’t just about charts; can it read others’ behaviors behind the scenes? (Main force, institutions, sentiment) If you can read that, your technical skills are solid.

If your skills rely only on reading charts (daily lines), you’ll likely misjudge. Stock selection aims to profit within trends (including capital flow), so trading becomes easier (you can correct mistakes). If it doesn’t work, change.

A pure stock trader must remember: if wrong, change immediately. Repeated operations will eventually find the right direction. Hold onto the correct ones (to expand gains), and if wrong, switch!
Less profit is okay, but big losses are not.

To make money in stocks, the secret is: identify high recognition, high probability core trend stocks or mid-term value stocks, hold when right, switch quickly when wrong. If wrong, close positions and wait. Even conservative traders should aim to break even at close. Choose stocks with strong recognition and core traits to recover losses.

There are no secrets in trading—when the market moves back and forth, face it calmly. It’s okay to get slapped; it won’t kill you. Analyze lessons, summarize lessons, remember lessons deeply! Only then can you recover from failures. Don’t fear being slapped. Focus on core themes with strong continuity, concentrate on short-term trend core upward plays with logical consecutive breakout leaders, ensuring there’s meat in the market, and enjoy the wealth brought by compound interest!

Trading—different personalities? Great! Impatient types can focus on main board short-term sentiment plays, tech innovation board and startup board leading stocks, Northbound arbitrage for big gains! Slower personalities can focus on index ETFs for stability, bold traders can try futures and contracts—there’s always a style that suits you. Find your trading mode and develop a good habit of eating well!

My trading approach:
Focus on short-term breakout and trend core upward patterns, with Hong Kong stocks, convertible bonds, and ETF arbitrage as supplements! Achieve steady gains and enjoy the long-term compound interest benefits! Spread positive energy! Dance with strength! Move towards profit!

Stocks with relatively active and recognizable traits (preferably aligned with current main themes or recent sentiment expectations, guided by chart structure, sentiment stage, volume support after declines, and proactive upward phase) during consolidation, try to lean towards the main line and above the 5-day moving average. Avoid buying on bullish days; prefer buying on dips in the evening, selling at a premium the next day.

Investment and financial management require caution—trading involves risks. No investment advice is provided.