We often see that when some investors concentrate on averages, K-lines, channels and indicators and invest more and more, someone needs to tell them that technical analysis should be a big leap forward in mastering the details of the market compared to fundamental analysis.
Because technical analysis can be of great help in trading, many elites put a lot of effort into this field, and eventually it was easy to find many books and different theories on technical analysis that covered a wide range of areas, many of which even developed into four dimensions or metaphysics.
Interestingly, there seems to be strong empirical support for each theory, which has led many people to make technical analysis their entire pursuit.
However, investors should not get completely obsessed.
While doing a lot of technical analysis, they should also remember that the ultimate goal is to move beyond technical analysis.
The subject of technical analysis and research is the market and the psychological activities of the people who trade in the market can reach the market limits, its form of movement, rhythm and direction.
To that extent, therefore, it is closer to the truth than fundamental analysis because it is closer to the market itself, which also constitutes the level that technical analysis can achieve, but fundamental analysis is difficult to achieve.
Another reason, of course, is that technical analysis is somewhat more quantitative, while basic analysis is more qualitative.
When it comes to trading, particularly in markets with high levels of leverage, quantitative analysis is in many cases more practical than qualitative analysis.
But while we see the advantages of technical analysis, we should always remember that the market determines technical analysis, not technical analysis determines the market.
Investors typically see some very classic top and bottom patterns, and a lot of very classic collation patterns.
Lead to the top and bottom of the market fall not classic mode, but the formation of the market fall market buyers and sellers in a time in the process of forming the classical form, for the current price position, there will be a very subtle psychological thinking set, a mixture of different kinds of news and data, the total market population will make a different reaction, then feedback to the market,
Eventually, it gradually leads to changes in the trading ability of buyers and sellers.
For the market, as long as the purchasing power is greater than the selling power, no matter what kind of news and data, the market will surely go up.
But the data and news will slowly influence market traders to rethink their positions and ultimately affect the overall relationship between purchasing and selling power.
In this process of power transformation, we will see these classical forms in the technical analysis.
Therefore, it is not because the M head causes the market to decline, but the market decline must go through such a process, from strong to weak, from weak to strong.
The head and shoulder top just shows that the transition process is slightly more complex, with slightly stronger purchasing power and gas than the M head.
The V-shaped top indicates a more abrupt and rapid transition between buyers and sellers due to price conditions and the intervention of certain factors.
The corresponding arrangement pattern also means that the two sides of the market generally balance their forces within a certain volatility space in the transaction, but they have different views on the direction of the transaction, which eventually evolves into a consistent process.
This agreement eventually causes the original balance of power between buyers and sellers in a certain transaction scope to change into a new imbalance, which is finally reflected in the market and breaks through the traditional sense of technical analysis.
The process of changing this view of trading from different to the same must lead to some form of price convergence, leading to the various forms of triangular ordering that are widespread.
For others, such as diffuse triangles and rectangular finishing forms, their final breakthrough results are not very good in many cases.
We often see breakthroughs fail.
This actually reflects the views of both sides of the market.
In fact, they are not effectively aligned in this process.
It is always the market that determines the market, not technical analysis.
This sentence will lead us to the question of what a market is.
We should remember that the market is a place where certain people accomplish wealth transfers without generating wealth.
All who enter this place expect to gain property through this place, not to lose property.
But the end result is always different from what most people think.
The market can always successfully complete the transfer of wealth, and the completion of the transfer process must show that at least 70 percent of the investors are wrong, losing money, and their property has been redistributed.
Imagine that we knew it wasn’t easy to get the elite of these groups to volunteer to be designated.
The only thing the market can do is let everyone make mistakes in various ways.
Cheat, cheat, cheat, use, use, reuse will always be the only theme of the market.
So what matters is the market itself.
As we enter the field of technical analysis, we should remember that it is only a means and tool to help us understand the market, and the most important thing is the market itself.
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Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
