What elements should be included in designing your own operating system?

Before establishing an operating system, we should first ask ourselves, what is the purpose of the investment? Is it to get rich overnight? Is it for steady appreciation? Or is it for rapid appreciation?

In addition, what is the expected rate of return? Is it 100% in a year? 100% in a month? 30% in a year? 30% in a month? 200% in a year? Or 50% in a year? These questions will greatly affect how we design our own operating system.

Additionally, regarding risk, what is our risk tolerance and risk preference? Can we tolerate a significant drawdown of more than 30%? Can we tolerate a minor drawdown of less than 20%? Can we only tolerate a slight drawdown of less than 5%? Or can we not tolerate any drawdown at all?

These questions regarding risk must also be considered. If we do not clarify these questions, blindly establishing an operating system is not very meaningful, at least not the most suitable for ourselves.

A complete operating system should include the following seven elements:

Cycle Judgment: Understand the general trend of the market and judge the current market cycle (such as bull market, bear market, sideways market, etc.).

Operational Thinking: Clarify the basic concepts and strategies of operations, whether to pursue short-term quick in-and-out or long-term holding.

Coin Selection: Select potential stocks based on certain criteria and methods.

Timing: Determine the best timing for buying and selling.

Trading Rules: Formulate clear buying and selling strategies, including entry and exit conditions.

Capital Management: Allocate funds reasonably, avoiding excessive concentration or dispersion, ensuring the efficiency and safety of fund usage.

Risk Control: Develop risk management strategies, including stop-loss mechanisms, position control, etc., to manage and reduce investment risks.

By comprehensively considering and integrating the above elements, one can establish a suitable operating system for oneself, thus achieving investment goals more effectively.