There is a saying in the trading world: "The trendy gets the yuan!"
I believe that if you find a trend in the recycle bin, and after finding the trend, you kill it decisively, you are "getting the trend"; if you are determined not to get out of the car before the end of the trend, you can "get the yuan".
If you don't get the yuan, it's not big enough.
It should not be difficult to understand, however, in the real world, if you really play with this mindset, you will encounter at least three irritating questions, what is a trend? how to identify a trend? how to identify a trend end?
Recently, a lot of friends have asked me these questions, and today I'm going to try to share some of my thoughts on these questions from my experience.
Regarding trends, one view is that the market is constantly high in innovation, which is a lot; the market is constantly low in innovation, which is a lot. However, the truth is that I understand, I just don't know how to use it!
The concept is a good one, but his daughter can't land!
In order to understand what a trend is, I first have to talk about another concept, which is that trends exist objectively, and the way to judge trends is subjectively chosen.
If you don't understand even that, don't play the game and go home and sow tomatoes.
The following examples illustrate the subjective choice of how to understand trends.
There is a method of determining the even-line multiplexing that the even-line multiplexing is multipotent, for example, the 5-day average and 10-day average, the so-called even-line multiplexing, which is essentially the sum of the market price on the 5th day of closing minus the 5 obtained numerical line greater than the sum of the market price on the 10th day of closing divided by the 10 obtained numerical line.
We change the mean line rule to the rule that the sum of the market price on the 6th day of the transaction is a multiple of the sum of the market price on the 11th day of the transaction divided by the 11th day of the transaction.
If we change the closing market price to the opening market price, then (the sum of the opening market price on the 5th day less the 5th) and (the sum of the opening market price on the 10th day less the 10th) if multiple heads are arranged, the number of positions is more.
The above-mentioned trends are both realistic and mathematical rules, leaving aside accuracy, and simply from the rules, it is impossible to talk about who is better and who is worse.
Let's take another look at the trend-judging method of the famous beach-trading rule, which is a trend-judging method that takes place after the market breaks the 20-day high and then the next time the market breaks the 10-day low. This method is essentially a mathematical method, but it is significantly simpler, rougher and more direct than the straight line method.
The answer is yes, as long as you like it, and you want to change it to a zero, the only thing to consider is the accuracy.
In addition to the above rules, are there any other rules? There are many, such as KDJ, MACD, BBI, etc. messy indicators that can be used to formulate the rules for judging trends. You can even summarize your own set of judgments to quantify trends from your own experience.
So, what is a trend market? Different rules, different judgments of the trend market. If you use the equation, the market is larger than the equation, then it is a trend market, and the next day it will immediately reverse; if you use the beach, the market is larger than the highs and lows of 20 days ago, then it is a trend market, otherwise the market will immediately reverse on the 21st day.
In fact, it's what we call a false breakthrough. It's a real swing if you can't reach a false breakthrough.
How to judge trends? The answer is obvious, subjectively choose one of your preferred mathematical methods or non-mathematical methods to make judgments. There are no absolute trends in the market, only methods to judge trends.
So, for those of you who ask me how to judge trends, don't ask me, you should ask yourself, how do you prefer to judge trends, what approach do you choose to judge trends?
However, some of my classmates are depressed, and I understand the method, and I do too, but no matter what method I choose to judge the trend, the timing is not right, the uniform line is clear, the gold fork, but falls to the dogs; the price clearly broke the 20-day high, but immediately collapses, how to solve this problem?
>_< Are you looking for a way to judge trends? You're obviously trying to open up God's perspective and predict big trends.
If you know how to judge a trend, then how to determine the beginning of a trend is not a problem anymore.
For example, in the equation, we can choose the gold cross point as the basis for the conversion of a bullish to a bullish trend. In the beach trading rule, we use the break of the 20-day high low as the basis for the trend start.
Similarly, the end point of a trend may also be defined by rules, which are not discussed in detail here.
The starting point of each trend is actually the effective entry point for our trades.
However, since we cannot predict the size of the trend in advance, every insertion is risky, and small or no-smaller trends can only be stopped after the stop loss conditions are met.
Of course, if you accidentally hit a big market, keep losing, even if you get a contract expired, you have no chance of getting out of it, that's a big profit.
Many traders are always unable to understand the probability, encounter small markets, are always unwilling to face the fact that the market is large or small, there is no corresponding small market stop loss rule, or there is a stop loss rule, it is always difficult to accept the fact that stop loss must be faced. Always try to optimize the trading rules, try to avoid small markets to capture large markets.
The process of optimizing the rules is essentially a process of continuously breaking the rules and establishing the rules, which will inevitably repeat the dead cycle of breaking the rules and establishing the rules.
Since ancient heroes were saddened by the beauty of closing, trading saddened by the loss of stop. Stop loss, it is not about whether you can stop the loss, but whether you can understand the necessity of stop loss.
Any optimization or circumvention of the stop loss within the rules is a violation of the rules, and ultimately does not make the money the rules make.
Translated from Beyond the K Line