Thinking and trading in the market

In the process of trading, many people are easily swayed by other people's opinions, thus performing operations that do not conform to their own system strategies, and falling into a bad cycle of self-denial.

Under reverse thinking, our own system is different from other people’s systems. Even if the trading system is the same, there are deviations in cognition. Even if we trade the same product and choose different time periods, then the judgment of the market and the strategies formulated will also exist. difference.

Everyone's cognition will be different, but everyone is an independent individual, so we can't be completely influenced by others, we should maintain a certain degree of independent thinking, so that it is possible to achieve the unity of knowledge and action.

Let's take a look at the market trend of this week's big pie, and see how I think and trade using the naked K trading system?

figure 1)

The best price action trades = market conditions (Trend) + level positions (L) + price action signals (S).

In the pie trend chart, the price weakens from point A to hit a low point B, then rebounds to point C, then pulls back and falls, and tests the previous low point B again, but does not fall below, and then a mid-yang line establishes a trough D, here a price action of a secondary test is formed.

The mid-yang line of trough D is a secondary test entry point for long positions. The stop loss is set below the low point of trough B. It is expected that the price will break through the resistance level R2, which is the neckline of the double bottom, and establish the reversal structure of the double bottom. .

Contrary to expectations, after entering the market, the price fell slightly below the peak C. Here, a trend structure of lower highs (CE) and higher lows (BD) was formed - a convergent pattern, which is a kind of market momentum Structure.

The price pulls back from peak E to point F with the Xiaoyang Xiaoyang Xiaoxing line. The adjustment time span is moderate, and a sub-high support level S2 is formed. Two sets of small harami signals appear at the S2 support level, which is finally blocked by a small The Zhongyang line breaks through, and the small Zhongyang line also breaks through the convergent form, which is an excellent entry point in line with the shape structure + signal.

After breaking through the triangle, the price then broke through the resistance level R2, went higher to test the resistance level R1, and traded sideways around it. At this time, is the operation to understand the profit or hold the position to wait and see?

The price climbed up to point H. Although it was obviously restricted by the resistance level R2 for the time being, there was no obvious bearish signal, and the market that rose from the low point B this time still maintained the trend characteristics of an upward structure, which is far from our entry point There is also some room, so I'll consider strategies:

(1) Close some positions, and move the stop loss below the latest trough F low.

(2) Move to the position of capital preservation, and keep the position to track the market changes.

After the price went sideways from the trough H, it quickly dropped to the key resistance level R2 and turned to the support area, and then quickly pulled up to break through the small resistance level R3, forming a bullish engulfing line, which is also a way to increase positions. many signals.

The next few K-lines showed a 70-80-degree pull-up, breaking through the resistance level R1, but the short-term pull-up is a bit rapid and the angle is large, and the bulls consume a lot of kinetic energy. At this time, appropriate lightening behavior should be considered.

The price falls back at the high point J. We need to know that the trough I is the low point of the latest upward structure. If the callback falls below it, the original upward structure trend may change. R1 and R3 are the conversion of the former resistance level to the support level, which is a callback stop It is necessary to pay more attention to the key point of falling.

On the whole, this wave of rising market, starting from the double bottom structure, basically follows the characteristics of the upward trend structure. As long as we firmly follow the entry and exit principles of the rising structure, we can basically hold it.

When the bullshit comes out, everyone will say it in hindsight.

The purpose of reviewing this case is to tell everyone how we should think and deal with the ongoing market, which is actually closely related to our own trading system.

In the case, we need to be clear about the reversal of the double bottom structure, the convergence pattern, the structural characteristics of the upward trend, the key points, the characteristics of exhausted kinetic energy, trading signals, long-short critical points, etc.

Finally, some advice for beginners:

1. We must lay a solid foundation (a tall building starts from the ground)

2. Believe in your system firmly

We are not afraid of stepping on pitfalls, and even encourage stepping on pitfalls, especially for beginners, stepping on pitfalls is not necessarily a bad thing, but remember not to step on the same pitfall N times!