How Can Technology Be Effective?

Few investors are going to analyze the technical indicators now, because practice has proved that it is no longer a dream to rely on some traditional index buying and selling systems to make stocks. Strangely, however, there are still some more unreal and more primitive technical analysis methods, such as drawing lines and finding cycles.

So-called Draw line It is to connect and extend the two highs or lows in a certain period, and then expect the market to rise or fall to this line and to block or stop this line. We believe that these lines are actually a very modest way of learning, because they feel that they are a rookie, and it is difficult to understand the profound theory of these lines. We only need to apply them. In fact, sometimes we dare to think about whether we should care about the theoretical basis of this method, but unfortunately, none of the relevant books. Because the theory is too mysterious? The answer is very simple. This method has no theoretical basis.

There are too many counter examples to prove that the pressure lines or supporting lines we have found in the whole world are ineffective. Therefore, when we draw a line, we do not know whether this is effective or not. If we tell a child about this, he will say, "Why are you so busy?"

Another popular method of analysis is counting cycle.

Recently, there has been such an analysis: Based on the monthly line measurement, it adjusted 12 months from 6124 points, adjusted 11 months from 3478 points, so each adjustment cycle should be 11.5 months, and this time from 3186 o'clock down to now only 7 months, so there is at least 4 months of adjustment time.

It is certainly possible for the adjustment to continue for April, but this has nothing to do with the first 11.5 months of the two.

In fact, we have put forward the scientific concept of statistics in the calculation cycle, but we have not made clear the basic concepts of statistics.

Statistics do need to sort out some data that has happened, but its basic requirement is to have enough samples. In this case, the sample is the number of times in the previous adjustment cycle. In this case, there are only two sample sizes. Obviously, there is no statistical basis for it.

Lack of sufficient samples Statistics It's cheating, or ignorance.

It is not possible to have enough samples. In the field of mathematical statistics, the validity of any statistical result is argumentation. This proof requires very specialized mathematical statistics knowledge. People who can do this thing in our country must be very rare. Even in the media, such research results are rarely seen.

But the stock market is an interactive market, and sometimes the prediction will indeed come true. For example, if a support line is supported, if everyone believes, the market will see the bottom near the line, but this is still a coincidence.

Of course, technical analysis is not useless. We all know that the medium and long term fluctuations in the market depend on the fundamentals, but the evolution of the medium and short term is more dependent on the change of market supply and demand. The object of technological analysis is the relationship between supply and demand. Therefore, technical analysis is helpful to judge the short-term changes in the market. Specifically, the monthly and longer cycle changes are more dependent on the fundamentals, while the weekly and shorter cyclical changes are more dependent on the technical side. This truth tells us that a high or low point many years ago is meaningless for today, and a certain fluctuation cycle many years ago is meaningless for today.

In addition, when we carry out technical analysis, we must pay attention to relativity and absoluteness. That is to say, do not expect to predict specific points, but to judge trends. Perhaps someone's prediction is correct, but this is just a coincidence. The coin toss also has 50% chances of success. We must abandon the extravagant hope of forecasting points instead of pursuing relativity, that is, the trend of market fluctuation.

With their own daily line and Weekly trend According to the experience of tracking and tracing, the fluctuation cycles of daily trend and weekly trend are not the same. For example, the trend of the daily trend is between 5 and 15 trading days, and there may be shorter or longer periods later. But as long as we track every day, we can grasp the time of trend transformation, so that we can make investment strategies calmly.