Misunderstandings of traditional trading theory
What is the process of people trading?
First of all, you have to see the disk first. This disk can be a price, a graph, or a K-line
This is something you can observe first, which is a superficial thing, and then what everyone studies together is this superficial phenomenon, and then they want to infer a result. In this intermediate process, everyone has a lot of their own methods, such as moving averages, trend lines, indicators, and such products. These products are all a probabilistic system. Laws, such as moving average indicators, can have two states of cohesion and divergence. In different market conditions, the way of expression is also different.
At this time, it is necessary to combine some other indicators to comprehensively judge the market. Some people want to get more accurate results, so they must mix many kinds of indicators and combine them for analysis. This is like taking out the 80% winning rate alone, which is not confirmed enough, and adding a few other 80% winning rate indicators together as a reference, in order to get a more accurate view,
This kind of behavior often causes a problem. There will be conflicts in the performance of certain indicators, and the directions of the two indicators may be reversed. Choose a wait-and-see attitude, and some people like to use the method of indicator resonance, combined with multiple indicators, to analyze with the same method, but this is also a probabilistic analysis.
In some cycles, the winning rate can be improved, but stop loss is also a common occurrence. We must first understand one thing 70%+70%. The result obtained will not be 100%, let alone improved. For example, when you are in a casino, guess the size, the first opening is big,
You won’t feel anything, but if it is big several times or even dozens of times in a row, you will definitely think in your heart that the probability of the next opening is “small”. When you have this idea, you are already wrong , in the probability system, in fact, every time the result of the board is "big" or "small", it should have a 50% probability each. This is a constant probability. What, but the impact, if you think that what I said is wrong, then think about the lottery, and use statistics to make the probability of the lottery, is it the same? If statistics and probability can be predicted, many people in the world will become rich because of it.
So is it absolutely correct to use the naked K trading method?
This is a place worth discussing. From the day when the Japanese candlestick chart was born, the K-line is the product that can most intuitively reflect the price.
Studying the K-line is the most intuitive performance based on price, but in the more than 100 years since the K-line was started, almost everyone has mistaken the direction of this research. For example, if you study naked K, it will definitely involve morphology, such as our most common morphology, M head, W bottom, head top shoulders, flag shape, prototype, triangle arrangement, and a series of things, These are based on a statistic based on a past price trend, and then based on this statistic, a probabilistic trading system is made, and the results obtained are not deterministic.
In current trading, the above two are the most common trading concepts and methods. Based on these two methods, various trading systems have evolved, and there are countless, so we will not give examples one by one. , the existing trading methods are almost the same, and if you change the soup without changing the medicine, you can enter the room and fool the world with a new famous name. Of course, there are some trading systems that shine in a certain short period of time. It disappears after a while, which is the biggest disadvantage of the probabilistic system, because these trading concepts are all probabilistic transactions, so in certain periods, the market will have relative coincidence, which will produce a good winning rate, but , after this period of time, these trading systems have become very unreliable again,
This is the main reason why most traders cannot make stable profits now.
The financial market is a place where fish and dragons are mixed, and it is difficult to distinguish the real from the fake. Many people like to post some delivery orders and profit charts to deceive others, or more commonly now, to provide trading strategies to attract everyone's attention. Most of these are all means of sales, and there is no essential difference from commodity sales, but the target audiences are different and the methods are different. Because you cannot see the essence of the market, you can only see the superficial phenomena displayed by these people, so many people are often deceived by it, and it is repeated several times without end. What's more, traders (platforms) will also get involved and make fake accounts to attract the masses. These are not enough to be believed. Please remember one sentence. Everything you see is just what they want you to see. The real concept of correct trading must be something you can trust. What is the degree of trust? Woolen cloth?
To make a metaphor, you believe that your feet can support you to walk and not let you fall, you never doubt,
This lack of doubt is the result of the certainty you got, verified by yourself, not what others told you.
For example: when you understand a basic mathematical calculation method, you will know that 1+1=2 is also deterministic.
These are all things that are printed in your mind. You can master them proficiently, and the rest is only execution. If you fall down while walking, there must be some unexpected situations, unpredictable risks, or your There is a problem with the observation, (there is a pit on the road, there is a stone, you did not see), in the math test, you will calculate addition and subtraction, but addition and subtraction also have numbers, and tens of thousands of digits, If you did something wrong, it must be that you are careless, not that there is a problem with your logic algorithm.
The same is true for the market, which can be calculated by reasoning. This is the theory we will bring to you in the future, a complete trading system, and a revolution in the financial trading market.
In the previous article, we mentioned that the generation of the K-line is based on the performance of a real fund entering the market. It is the performance of a real fund entering the market and leaving the market. We call it "fund inflow" here (the following courses are also The expression and processing of "fund inflow" will be mentioned).
To put it simply, you only need to study, after the money enters the market, the real behavior of these funds, and you can study the results. If your research direction deviates from this essence, then the direction must be wrong.
As the saying goes, if the direction is wrong, hard work is in vain. Of course, the study of a thing must be based on its basic principles. If you want to get a definite result, you must go through step-by-step logical reasoning and careful deduction to get a definite result, from the source to the end. As a result, if there are uncertain factors in the process of this system, then these will be your potential risks, so from here, we can deduce where your risk boundary is, the source of this risk, and the possible existence What the reverse outcome would be, including risk boundaries, would be clear. Rather than saying that our trading technology is a technical analysis, it is better to say that it is logical reasoning, which is a process from cause to effect.
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