The core principle of market volatility is divided into four levels, and the four levels are progressive, and finally form the market that we can see with the naked eye.
Fundamentals - Psychological Changes - Capital Inflows - Price Analysis
1: In any financial market, interest is the main driver. This is true for the stock market, futures market, and foreign exchange market. Interests, whose interests are neither yours nor mine, have nothing to do with most retail investors and small funds, but the interests of capital . Whoever has the closest relationship with the interests of capital is the banker. Who is the banker, Goldman Sachs, JPMorgan, Citigroup, large hedge funds, the Federal Reserve, etc. in the foreign exchange market. In the stock market, the government, enterprises, funds and even Niu San are the market makers.
2: Fundamentals dominate market trends, yes but not necessarily. The reason for market fluctuations is the inflow of capital. Without capital inflow, the market is a stagnant pool. That fundamental news led to capital inflows, why?
Because the root of fundamentals is people's expectations of capital inflows. The relationship between fundamentals and capital (capital) inflows is like a person yelling that I want to move forward, everyone follows me, and then the person takes a step forward.
Shouting that I want to move forward is the fundamentals, and taking a step forward is called capital inflow. The former is called anticipation, and the latter is actual action. After shouting forward, can this person take a step back, take a step to the left, or stand still? It is completely possible, and there are many choices. Therefore, it is important to see how it is done, not how it is said. The fundamentals are what the interest drivers want investors to see, not the fundamental driving factors of the disk, so the flow of capital (funds) is higher than the fundamentals. The so-called fundamentals are like non-agricultural data. The reason why there is often a phenomenon of buying on expectations and selling on facts is because most people do not understand the difference between the two, and mistakenly take fundamental news as the main driving force to guide the disk. .
3: The outflow and inflow of capital is controlled by people's hearts. Manipulating funds to make profits and losses in the market, the root of people's desire to make money comes from desire. People's hearts are controlled by desires and influenced by fundamentals. Desire magnifies leverage, greed, fear, anxiety, gambling, and profit and loss. Fundamentals affect subjectivity, people's hearts, and judgment. So to sum up, people's hearts are the root cause of market fluctuations. Individual psychology controls small-scale capital inflows, and group psychology controls large-scale macro-capital inflows. When the views on large-scale macro-capital inflows reach a consensus, a trend is formed.
4: The relationship between fundamentals, psychological changes, capital inflows, and price analysis
Fundamentals: market-guided directional information, time is valid.
Psychological changes: changes in the psychological expectations of countless investors and subjective views on the market.
Capital (money) inflow: The subjective perception that causes money to flow in or out of the hands of investors.
Price behavior: capital inflows, the realization of crowd psychology.
In technical analysis, it is necessary to analyze these four elements from top to bottom. Technical analysis is not just a chart, but the change of capital inflow caused by the psychological changes of all investors in the market.
5: After cashing out, the disk is formed. Technical analysis studies the past capital and psychology , looking for the main driving force in the past, the game interval, etc., cuts the disk into qualitative, and then conducts research and prediction on the future trend.
Fundamentals - Psychological Changes - Capital Inflows - Price Analysis
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