The 30-year practical insights of the first generation of stock investors, helping you navigate market cycles

Xie Mingyi

Editor's Note

The 'Stock Market Sutra' authored by Xie Mingyi, one of the first generation of stock investors in China, is a work that holds the key to the 30-year rise and fall of the A-share market. As a witness to the entire process of China's stock market maturing from its infancy, Xie Mingyi brings with him 37 years of practical experience – from entering the market with 3,800 yuan in 1989 by purchasing 'Shenzhen Development', to experiencing the 'August 10th Incident' and the '327 Government Bond Event', and then navigating through the market adjustments of 2015. He has transformed the techniques of building positions and wisdom of cutting losses amid alternating bull and bear markets into concrete and actionable trading methods. This methodology, distilled from his practical trajectory 'from 10,000 yuan to 100 million yuan', correlates each step with real market operations to help current investors avoid the trap of chasing highs and missing lows, find the right direction in volatile markets, and hold onto their bottom lines.

A Veteran's Memoir of Bull and Bear Markets

Let's turn back the clock to Shenzhen in 1988.

At that time, this special economic zone was brimming with an adventurous spirit on every street corner, while KTVs looped Angie Tung’s 'Hold On To The Roots,' resonating with countless dreamers’ desire to take root here. Xie Mingyi was one of them, part of this wave.

Back then, he was still holding an 'iron rice bowl' position at a national agency in Beijing when he happened to get an opportunity to be transferred to Shenzhen. On one side was a stable life, and on the other was the unknown yet rapidly evolving potential of the special zone. Without hesitation, he chose the latter and dove headfirst into this land full of opportunities.

Upon arriving in Shenzhen, the fresh landscape of a market economy opened his eyes, and the 'stock trading' happening inside the securities branches on Hongling Road sparked a strong curiosity. Hearing that one could make money from buying stocks, he boldly tried it out with his savings of 4,000 yuan, spending over 3,800 yuan to purchase 200 shares of 'Shenzhen Development' (now Ping An Bank) —the first listed financial stock after China's reform and opening up.

Surprisingly, within just a month, the stock had risen by 30%. Xie Mingyi sold it immediately and securely earned his first bucket of gold from the stock market. That small stock receipt became a pivotal turning point in his life, tying him indissolubly to the ups and downs of China's stock market.

In 1992, the first securities branch in Beijing opened. After four years of hustling in Shenzhen, Xie Mingyi immediately thought of returning home – he wanted to go back to his familiar hometown and continue his journey in the stock market.

In 1993, Huaxia Securities' Dongsi Branch in Beijing officially opened for business.As the most renowned 'Number One Branch of Huaxia' in the industry at that time, it was the first to introduce the concept of a 'VIP Room,' an exclusive area accessible only to investors with substantial capital.By this time, Xie Mingyi had already amassed a fortune worth millions through hands-on experience in the Shenzhen stock market, naturally becoming a regular in the VIP Room.

In that era when everyone was seeking riches, there was a legend in the stock market that 'you could make money by simply buying and selling.' However, very few people could truly stand firm amid the fluctuations. Xie Mingyi was one of the fortunate ones, and even more so, one of the capable.Although computers were already being used to assist, he maintained the habit of manually drawing 'battle maps':The highs and lows of K-lines and the peaks and troughs of trading volumes were all clearly marked on paper, revealing the patterns of rises and falls under his pen.

Every day after the market closed, a crowd would gather in the VIP Room, and Xie Mingyi's 'battle maps' and insightful analyses became the center of attention. People exchanged ideas, while also witnessing every rise and fall in the stock market.

But no one can always have smooth sailing in the stock market. Xie Mingyi’s investment career also couldn’t avoid the painful market correction of 2015.

Thousands of stocks hit the daily downward limit, with four consecutive days of limit-downs. Most stocks lost 50% of their value within days... Just as the market was filled with cries of despair, the government intervened to stabilize it, giving the tense market a temporary breather. Having exited early to observe from the sidelines, Xie Mingyi saw the market at 4,000 points and judged it to be a good opportunity to buy the dip, immediately making a large purchase. Unexpectedly, however, after the initial forced liquidation following the decline, another round of falling occurred. The weak rebound led to significant losses for him.

This leverage-driven bear market also made retail investors like Xie Mingyi realize:Systemic risks in the market far outweigh the risks posed by market sentiment fluctuations. Respecting the market and managing risk will always remain the primary principle of stock trading.

Over three decades of market ups and downs, Xie Mingyi's stock trading career has been deeply intertwined with the development of China's stock market. From entering the 'Shenzhen Development' market in Shenzhen with 3,800 yuan, to hand-drawing K-line charts in a Beijing大户室, and then navigating through the 2015 stock market adjustment, he experienced multiple rounds of regrouping.Starting with 10,000 yuan, he achieved a financial leap to 100 million yuan by the year 2000.

A 30-year practical approach: an exclusive experience post

In this practical trajectory from '10,000 yuan to 100 million yuan,' Xie Mingyi went through multiple bull and bear market trials, ultimately distilling a set of exclusive experiences that balance operability and practicality.

1. The 'Strength-Weakness Analysis Method' for seeing through the bulls and bears

In the complex and ever-changing stock market, capturing the rhythm of rises and falls accurately cannot be separated from actionable methods. Xie Mingyi condensed his 30 years of practical experience into a set of'Strength-Weakness Analysis Method.'

The core logic of the Strength-Weakness Analysis Method is not about predicting the reasons for rises or falls but using'results to infer results'—by judging the strength of the bulls and bears through three core elements: stock price, trading volume, and time, and then following the actions of the stronger side. This method discards the limitations of single indicators, constructing“Points, Lines, Planes, and Space”A four-layer analytical framework progressively breaks down market logic.

“Points” are the core of price-volume relationships. Rising prices with increasing volume indicate a healthy trend, while rising prices with shrinking volume suggest strength; however, rising volume with falling prices signals divergence and potential risk. “Lines” refer to K-line trajectories, which require time-based analysis to assess trend continuity, while also identifying two key trading nodes: resistance and support levels. “Planes” expand the analytical dimensions through four major relationships—position, comparison, news, and focus. For instance, stocks that continue to rise despite negative news reflect extraordinary strength. “Space” incorporates market logic, integrating natural principles and resonance theory to predict potential trend scope and reversal timing.

In practical application, Xie Mingyi’s Strength-Weakness Analysis adheres to clear principle boundaries:

(1) Do not trade when direction is unclear; only intervene when strong or weak signals are evident.

(2) Allocate capital differently based on strength levels, concentrating positions in the strongest opportunities.

(3) Avoid fixed ratios for stop-loss and take-profit; instead, set flexible ranges based on turning points in bullish and bearish forces.

This method is particularly suited for flexible operations with small to medium-sized capital, applicable to short-term trading as well as trend trading, with its core being sensitivity to shifts in market forces.

Unlike analytical tools reliant on complex indicators, Strength-Weakness Analysis emphasizes returning to market fundamentals—price is the main battlefield of bullish and bearish contention, volume acts as a microscope reflecting power shifts, and time serves as a compass guiding trend evolution. The dynamic combination of these three elements can authentically depict market competition paths, helping investors avoid emotional interference and make decisions based on objective data.

2. “Don’t chase highs in a bull market; there are ways to handle missed opportunities!”

In the stock market, there are countless things one might regret, but there is one thing that everyone probably dreads the most, and that is"The bull market has arrived, but your positions are empty."Watching stocks rise every day, you're too afraid to chase highs for fear of being stuck holding the bag, yet you still want to make money; by the time you realize a bull market is truly here, you find your positions are empty, forcing you to miss out on the rally.

So how can this dilemma be resolved?

Xie Mingyi has summarized two methods for building positions.

The first method: The Lurking and Waiting Approach.

This approach is suitable for when the bull market hasn't arrived yet, but the stock market has already fallen significantly. Buy stocks in advance and wait to sell them for profit when the bull market peaks.

Timing your purchases and selecting the right stocks are key. You should buy when the market has reached a relatively low point and investor sentiment is down. Stock selection should follow value investing principles—choose companies with high net asset value and strong intrinsic worth, as these firms often have higher dividend yields. Although such stocks may not see the largest gains during a bull market, they offer safety. If positioned early, returns won't be insignificant. When using these stocks as a base position, even if prices drop after purchase, there’s no need to worry excessively about stop-losses.

The second method: The Momentum Following Approach.

Also known as the Right-Side Trading Method, this involves buying once an upward trend has been confirmed. However, if the judgment of the trend proves incorrect, it's important to exit decisively and wait for the next opportunity.

The emergence of a trend can be assessed from two aspects:

One aspect is to evaluate whether the structure forming at the bottom is reasonable and whether the balance of power between buyers and sellers is shifting;

The other aspect is to observe market behavior when breaking through the pressure line and resistance levels in high-volume trading zones, checking for divergences in price-volume relationships and technical patterns. At this point, it is crucial to buy strong stocks and avoid those that have yet to start rising. This is because a major bull market typically sees rotational gains, with some sectors leading the way and pulling others along, creating relative pricing dynamics and profit effects that encourage other stocks to follow. Otherwise, simultaneous rises and falls often indicate mere rebounds.

3. The core of stock trading lies in 'self-confrontation'

In the tug-of-war between rises and falls in the stock market, there exists an ongoingjourney of self-improvement involving cognition, discipline, and human nature,which continuously tests investors' psychological resilience. Countless retail investors fail not due to insufficient technical skills but because they succumb to their own human weaknesses.

Loss aversion leads investors to 'sell winners and hold losers,' cashing out at a 5% gain but hesitating to cut losses even when down 20%; herd mentality drives散户 investors to jump into the market at the peak of a bull run and panic-sell at the bottom of a bear market; overconfidence tricks novices into mistaking luck for skill, eroding returns through excessive trading.

To overcome oneself, one must first adopt 'probabilistic thinking,' accepting that there are no absolute certainties in the stock market. Seasoned traders don't aim to 'win every time'; instead, they use discipline to control losses while letting profits grow naturally.

Secondly, one must learn 'contrarian thinking,' staying calm amid others' euphoria and strategically planning during widespread panic, resisting being swayed by market sentiment.

More importantly, it is about establishing trading discipline. Just as the military relies on discipline to suppress fear, retail investors also need to constrain their desires with rules—setting clear profit-taking and stop-loss ranges, not arbitrarily changing decisions, and not letting short-term fluctuations interfere with long-term judgment.

Xie Mingyi’s over 30 years of trading experience tells us thatThe highest state of stock trading is 'a heart as calm as still water': no wild joy when making money, no discouragement when losing money.This mindset is not innate but cultivated through repeated reviews and reflections. In the current bull market, the hotter the market gets, the more important it is to maintain mental discipline—not blindly chasing highs or betting heavily. Only by taming inner greed and fear can one stand firm amidst market ups and downs and become a true long-term winner.

True confidence in the stock market never comes from temporary luck but from understanding the essence of market fluctuations and having an effective and practical method.In 'The Heart of the Stock Market,' Xie Mingyi distills wisdom from 30 years of real-world experience, offering investors practical tools for navigating both bull and bear markets while revealing the core principles of long-term survival. From objective game theory in strength-weakness analysis to cultivating mental resilience against self-doubt, every piece of advice in the book stems from market-tested lessons, not empty preaching.

In this volatile market, there is no universal formula applicable everywhere; only by internalizing others’ experiences into one's own trading logic and refining it through practice can one truly stand firm. As the author puts it:“Only by turning what others have into your own can you make steady progress and forge ahead courageously in the stock market.”

May every investor harness the wisdom found in the book to seize opportunities, uphold principles, and emerge as a long-term winner who transcends cycles.

(This article is excerpted from 'The Heart of the Stock Market: 30 Years of Practical Insights on Stock Trading' by Xie Mingyi, published by CITIC Press Group in January 2026. The title was added by the editor, and content has been edited. Guest opinions are personal and do not represent the views of this publication.)

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