How to simplify the complex market from the avenue to simplicity

The k-line trend of the speculative market goes up and down every day, and it seems complicated, but it is actually simple. It is so simple that we can think that these k-line trends are either rising or falling. Then if we want to simplify the complex market, we must first figure out the long-short conversion. Only when we understand the conversion process can we summarize the status of the conversion and know the status of the market. Know more about trade-offs.

The process of long-short conversion can be summarized as:

Gathering of bulls→burst of bulls→gathering of shorts→burst of shorts→gathering of bulls...

The process of long-short conversion is actually a process of energy accumulation and release. A deep understanding of the content of this chapter is of great significance to trading!

Long-short conversion schematic diagram 1:

recognize the source

The price of the financial market fluctuates every day, and its essence is the flow of funds. If capital is regarded as a kind of energy, then this kind of fluctuation is actually a kind of energy fluctuation. The energy of the market is divided into long and short, so the price fluctuation is actually the continuous conversion of long energy and short energy, and the process can be expressed as:

Periodic short positions weaken, and the energy of bulls begins to gather. When the energy reaches a critical value, the energy of bulls begins to explode, and the market continues to rise; after a period of development, the energy of bulls begins to weaken, and the energy of short positions begins to gather. When the energy of short positions reaches a critical value, short positions begin to explode , the market keeps falling, and the market is so cyclical.

Schematic diagram 2 of long-short conversion:

Long-short accumulation process: In the process of long-short energy accumulation, the market strength is generally weak, the k-line trend is basically in a state of shock or crawl, and the direction is easy to turn back, so this kind of market cannot participate in trading!

Long-short outbreak process: When the long-short energy gathers to a certain critical value, the market will inevitably explode. This kind of explosive market is the core market that we need to grasp, and this explosive critical point is our entry signal. In the process of practice, this kind of entry signal requires us to wait very patiently.

In the process of long-short conversion, the energy accumulation of bulls will be completed in various forms, which can be summarized into three types: single bottom, double bottom and multiple bottom. As shown in the following figures respectively:

(Multiple accumulation is completed in the form of single bottom and double bottom)

(The aggregation of long positions is done in the form of multiple bottoms)

In the same way, the accumulation of short energy will also be completed in various forms, which can be summarized into three types: single top, double top and multiple top. It is enough to flip the graphics such as the long form, and the graphics are skipped.

Application in actual combat:

In-depth thinking on essential issues is the key to whether any market participant can get through the two channels of trading, Ren and Du, so please don't ignore the thinking of these basic issues. It is often not those complicated disks that can lead us to a deep understanding, but some seemingly simple and insignificant issues. Therefore, only when we have thoroughly figured out these essential problems, our thinking will change, and then our trading behavior and trading mentality will change with the change of thinking, and finally guide us step by step out of the quagmire of losses. Step into the profitable ranks.

Any top-level expert in this market, although their trading methods will be different, without exception, their understanding of the essential issues of this market must be very deep and thorough, otherwise they will not be able to become the so-called masters .