The formation of a master needs a process, which is a cognitive process for the market. If you ask how to become a master, then he must go through the following cognitive process and have the following characteristics;
1. Cognition of the market (system concept):
There are three elements in making a cognitive market list: ① confirming the direction; ② finding the right position (admission, stop loss and take profit); ③ positioning (fund management).
1. The core of this system: follow the mainstream capital flow.
2. Market composition: The fluctuation of any financial market is caused by the game of buying and selling positions.
There are countless empty orders and multiple orders in the market at any time. When the empty single quantity is greater than the multiple single quantity, the market will decline, and when the multiple single quantity is greater than the empty single quantity, the market will rise. Therefore, regardless of any trading variety, the most important thing is to analyze the mainstream capital trends in the market.
3. Composition of dealers:
1: fundamental trader
2. Technical traders (technical traders are divided into trend traders, indicator traders and K-line traders. )
4. Fund composition (position cycle): long-term funds, mid-line funds and short-term funds.
How to follow the mainstream capital flow, then you must understand the capital ability and position change cycle of various investors (the following will explain the mainstream trading methods with the capital flow). As a trader, you should not only pay attention to the price fluctuation on the horizontal axis of the disk, but also the time of capital inflow on the vertical axis.
As mentioned above, market fluctuation is caused by traders buying and selling positions, which is also called capital flow.
First of all, let me analyze the fundamental traders:
I divide fundamentals into focus events and general events.
However, whether it is a focus event or a general event, their capital composition is composed of long-term, mid-line and short-term funds. The only difference is that the capital capacity of each trading cycle can be regarded as a focus event, which can change the trend, compared with focus events, such as QE, various crises, interest rate fluctuation, employment and so on. In this kind of events, there are more funds in the medium and long term, while general events such as daily data: GDP, CPI, PPI, ISM, PMI, ISM, IFO, trade current account, Zhou Du unemployment benefits, Michigan index, house price index, etc. This kind of data has more short-term financial ability.
Secondly, I will talk about technology traders:
Technical traders will present different capital cycles and abilities according to different graphs in different periods, such as daily, weekly and monthly lines, so these traders have longer capital cycles and are long-term funds. 4 hours, 1H, and the period is the midline fund. 1H chart is defined as short-term funds below. (The cycle definition argument here is based on the fundamental definition of capital cycle and capacity).
What I said before is just a foreshadowing, so now let's discuss how to make a good deal. Whether you are a data trader, a technical trader, a K-line trader or an index trader, then you are a small part of the market. If you want to make a profit, you need to combine two, or three or even more trading methods to achieve the purpose of following the mainstream funds. When the capacity of all kinds of funds you combine exceeds 50%, then you can get benefits in this market. For example, many index traders combine two or three indicators to trade a concept. But it is different, because indicators are always accidental. Some index transactions seem to have good returns, but in actual transactions, you will find that this is not the case, because the form of indicators will not be formed until it reaches the latter form. It's like looking at the form that has come out and saying that this form should go like this.
However, there is still a problem here. Many people think that if all trading methods are taken into account, then we will not lose money, or reduce the loss of orders to a greater extent, but this is not the case in the market, because the proportion of various traders in the financial market is not a fixed proportion at each time node, and it will change under different economic conditions. And if you are too harsh and perfect, you may never be able to deliver within a week or even a month, because when all investors in the market agree, the desired point cannot be achieved, and the ratio of 5 1% will be reversed, so the point where 100% agrees is the point that cannot be achieved. Just like tug-of-war, if there is someone on one side and no one on the other, then the tug-of-war event will not be established. The market is built on the basis of mutual game. Without the game, there is no price, so you only need to follow most of the capital flow to make orders.
The original text is from LinkedIn. Please keep the original link: /forum.php? View thread & tid =130