1. Three hypotheses:
(1) Market behavior contains and digests all information.
"Market behavior embraces and digests everything" constitutes the basis of technical analysis. The technical analysis school believes that any factor that can affect the futures price of a commodity-fundamental, political, psychological or any other aspect-is actually reflected in its price. Therefore, what we must do is to study the price changes.
(2) The market operation is evolving.
The concept of "trend" is the core of technical analysis. It can be naturally inferred from "the price evolves in a trend way" that for a given trend, the next step is often to continue to evolve in the direction of the existing trend, and the possibility of turning around and reversing is much less. This is of course the application of Newton's law of inertia.
In other words: the current trend will continue until it turns around and reverses. Although this sentence is almost repeated in the same language, what I want to emphasize here is: unswervingly follow an established trend until there are signs to the contrary.
(3) History will repeat itself.
Technical analysis and market behavior are inextricably linked with human psychology. For example, the price pattern is expressed by some specific price charts, which show people's optimism or pessimism about a certain market. In fact, these figures have been widely known and classified in the past few hundred years. Since they have been effective in the past, we might as well think that they will be equally effective in the future, because they are based on human psychology, and human psychology has always been "a leopard cannot change its spots".
"History will repeat itself" means that the key to the future is hidden in history, or that the future is a copy of the past. History will repeat itself, only in different ways.
There are no two identical leaves in reality. Investors often seek the "truth" of investment in similar historical changes, but in the end they are scarred, which also shows that the market is endless.
2. Four elements
(1) Holding profits.
There is a saying in trend trading, which is called stop loss and let profits run. The winning rate of trend trading is not high. If we don't make a lot of money on stocks that can go up, there is no way to make up for the cost of doing something wrong.
(2) Win the analysis and make a plan.
Pay attention to this. Every time you trade, you should think about the profit-loss ratio (winning face) and winning rate from the beginning. Stock trading is actually a game of probability. Make a good trading plan and try to control the probability of failure as much as possible.
(3) Emotional control, unity of knowledge and action.
To learn emotional management well, we should learn to stop loss in time. Stop loss in time is better than losing the whole game. Emotional control is important. The most difficult thing to overcome is to stop loss in time. In the stock market, there is never a way to win 100%, and most people often lose more money than they earn. Don't imagine that they can pull back a game.
(4) light warehouse.
The most important thing is to confirm that part of the principal is still there. No matter how you choose stocks, you may make mistakes, so you must learn a few operations.