left trade
Left side trading, also called reverse trading, directly enters the market in reverse when the price reaches or is about to reach a so-called important support point or resistance point, without waiting for the price to change.
Representative: Buffett
Buffett's famous saying, be greedy when others are fearful and fearful when others are greedy, proves that Buffett is a typical left-handed trader. One can get a glimpse of it from his famous trading words of greed and fear, and it can also be proved by his purchase of PetroChina in the past.
Technical characteristics of the left transaction:
1. When the price reaches or is about to reach a so-called important support point or resistance point, enter the market directly against the market without waiting for the stock price to change.
2. The reason for entering the market on the left side of the transaction: if the price is attractive, buy it.
3. When the price is falling, we don’t know when the bottom will appear, but we feel that the price is reasonable, attractive enough and have a margin of safety, so we choose to buy.
The technical meaning of the transaction on the left:
1. The logic of trading and buying on the left side: the price becomes attractive, and the purchase is worth the money.
2. The disadvantage of the left side transaction: when buying on the left side, you don't really know whether the price will go up later.
3. The fear of the capital market is that after a sharp drop, the market will not care about the pain and suffering of investors, and will not fall anymore.
4. Investors who really outperform the market are: investors with left-hand trading thinking.
① The pursuit is: buy on dips and sell on rallies.
② The reason why world-renowned investment masters can become masters is because they all have left-handed trading ideas.
③ The thinking of retail investors is generally: greedy when the position is high, and fear when the position is low.
5. The secret to winning trading and investment on the left side is: in a confirmed bull market, buy when there is a pullback.
6. Conditions for leaving the market on the left side: break the 5-day moving average, leave the market in the short term; leave the market in the middle line if the moving average is bonded and break the position.
Conditions of use for transactions on the left:
1. The funds used must be spare funds.
① Funds that are never likely to be used are funds other than those that meet all of one's consumption needs and business needs.
② Loan funds, pension funds, and living funds are not suitable for trading on the left side, nor are they suitable for entering the market, even if trading on the right side is adopted.
2. Able to endure floating losses.
① The margin of safety is a range, not a very precise point.
② After buying, the market inertia will fall, and the method of gradually building positions can be adopted.
③ The left side of the transaction is not in the form, but in the logic, as long as it is not seen that the market is about to turn before buying, it is the left side of the transaction.
3. Hold for a long time and don't stop loss easily.
① The logic is based on buying cheap goods. The law of market value determines cheap and unreasonable prices, which cannot exist for a long time.
② When judging whether the price is attractive or not, and whether to use value investment for left-hand transactions, the future of the enterprise should be considered.
right side deal
Buy after the bottom of the down phase, or sell after the top of the up phase. This kind of trading behavior that does not need to predict when the bottom and the top will appear, but waits until the bottom and the top appear, and then conducts trading operations is called right-hand trading. Trading on the right side is also known as the right hemisphere theory, that is, follow the trend, never operate against the trend, and never predict the future.
Main representative: Gann
Gann's most representative language: As long as the direction does not change, your homeopathic order is right.
Technical characteristics of the right side of the transaction:
1. Don't predict the trend of the market, wait for the market to give an answer; operate after the trend turns.
2. You can't buy at the lowest point, and you can't sell at the highest point, but you can guarantee that you won't miss the big swing market.
3. The characteristic of trading on the right side is: re-enter the market when the price has fallen from the high point or recovered from the low point.
4. Reasons for trading on the right side: The high and low points of the price have passed temporarily, and the turning point of the trend has appeared.
The technical significance of the transaction on the right:
1. The basis for trading on the right side: whether the target has the momentum to continue to attack.
① Once the price forms a harbinger of continuous upward attack, actively buy.
② Once the price is required to be adjusted, exit the position immediately to avoid unnecessary risks caused by price adjustments.
2. Clear trend, buy on the right or sell on the right.
① To follow the trend, the key lies in a word of potential, which can determine the advance and retreat of the general trend.
② Operate only when there is a clear trend, and do not operate if there is no clear trend.
3. The pursuit of trading on the right is "chasing up and killing down".
① The "chasing up and down" trading on the right side is relatively safe.
② Transactions on the right side tend to be "a step behind", because by the time you see the situation clearly, almost everyone may have seen it clearly; at this time, there may be only a little residue left in the broth.
Typical right-hand trading style:
① Shorten the position if it falls below the 5-day moving average, and close the position if it falls below the 20-day moving average.
② Trade on the right side to see the trend, if it falls below 20, you will be liquidated.
For traders on the right side, the downtrend should already be a short position, patiently waiting for the trend to go up again.
For the traders on the right side and the mid-line customers, the risk comes out, the opportunity comes out, and the adjustment is for a better rise in the future.
battle between left and right
In the figure we can see:1. When falling, the bottom is used as the boundary. Those who are low-sucking on the left side of the "bottom" belong to the left side of the transaction, and those who chase up after bottoming out belong to the right side of the transaction.
2. The trading on the left is a trading system in which the direction of buying is opposite to the direction of price movement; the trading on the right is a trading system in which the direction of buying is the same as that of price movement.
In layman's terms, the principle of trading on the left is to buy low and sell high, while the principle of trading on the right is to chase up and kill down. The transaction on the left emphasizes forward-looking forecasts, while the transaction on the right emphasizes following the trend. Trading on the left is a master's game, while trading on the right is a common practice.
The difference between left and right transactions
Choosing a left deal or a right deal is the hardest choice:
1. The transaction on the left emphasizes being one step ahead in action, trying to obtain a better market entry price.
2. The trading on the right emphasizes the safety of entering the market after the inflection point appears. Never try to buy the lowest point, as long as you buy the sub-low point, it will be a good result.
3. The operators on the left side enter the market according to expectations, and the left side traders are more idealistic.
4. The operators on the right side enter the market according to the actual direction of the price trend, and the traders on the right side are more objective.
5. The advantage of a good left-hand transaction is that you can often get a better entry price. If you read it right, the profit will be larger; even if you read it wrong, the loss of stop loss will be relatively small.
6. The actual trend is still uncertain, and no one can guarantee that after the inflection point, there must be a real reversal. Sometimes, trading on the right side actually buys the high point of the short-term callback in the decline.
7. The two methods actually have their own advantages and disadvantages. How to choose depends on what kind of trading style we have and how our trading strategies need to be coordinated.
8. Most traders adopt the trading rule on the right side.
① When they see the price hit a new high, they understand that the market has started, and then they start to chase the high.
② But it is often to catch up to the high point of the stage, especially in the face of short-term fluctuations, which is the fundamental reason why only a few people in the market make money.
There is no difference between right and left trading
Because the price is unpredictable, many investors think that trading on the right side is better than trading on the left side. This is a misunderstanding, mainly based on Newton's law, and moving objects have inertia. It is believed that the price in the process of rising and falling will maintain its original trend. For example, the system on the right sends out a buy signal in the process of price rise and a sell signal in the process of falling. It is based on this theory and believes that the rising The target has a high probability of subsequent rise, and the target of decline has a high probability of subsequent decline. But Newton's law is aimed at an ideal state. In the real material world, there are very few people who move in this way, and many movements show irregular movements.
It is difficult to say which trading method is suitable for investors with a certain trading style. Generally speaking, trading on the left side is more suitable for long-term or medium-term value investors, while trading on the right side is more suitable for short-term trading.
As a trader, do you think left or right trading is more suitable for you? Please leave a message below to express your opinion.
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