Inexperienced investors are most likely to make two mistakes when using technical analysis methods to predict stock trends, one is subjective analysis and the other is hindsight analysis.

The so-called subjective analysis method is to deliberately look for those desired results when analyzing stock technical indicators due to the preference for stocks.

This situation is difficult to avoid even for seasoned veteran stockholders, because most people like good news and don't like bad news.

For example, when you have a full position in a stock, even if most of the technical indicators indicate that the stock will fall in the future, you will often think that the technical indicators are wrong.

Another kind of afterthought analysis is due to the fact that investors are too careful about the laws of the historical trend of stocks.

Many investors even said that they can analyze the future top and bottom of the market through the law of historical market trends, and the predicted points will even be accurate to tens or even a few points of error.

In fact, we all know that it is very difficult to predict the trend of the market, even if it is not easy to roughly predict the direction of the market trend, let alone accurately predict the time and number of points to the top and bottom.

Warren Buffett once said: I would rather be vaguely accurate than precise and wrong.

This quote is a good point out of the drawbacks of the technical analysis method. The more accurate and positive the tone of any stock analyst's judgment about the future trend of a stock, the more credible the analyst's statement becomes.

As for the disadvantages of technical analysis methods, as a veteran of the stock market for many years, Xu is of course very clear: "Then how do you think we should overcome the influence of subjective factors in technical analysis?" Do you rely on experience? ”

"People have seven emotions and six desires, they can be greedy, they can be afraid. Human weaknesses are born and almost never overcome. People who are not greedy for money will definitely not speculate in stocks, and those who speculate in stocks will definitely be greedy for money.

So don't expect to overcome yourself by psychological means. Even if you can defeat yourself for a while, it is impossible to defeat your own demons.

As the size of the money in your hands grows, so does the stress and fear you face until you can't bear to break you down. ”

"So what should we do? Don't you necessarily stop trading stocks because of fear? ”

Sun Haoyang nodded: "You're right, the best way is not to 'speculate' stocks." ”

Lao Xu heard that Sun Haoyang's sentence put the word "speculation" in stock speculation very seriously, which obviously meant something: "What do you mean by not speculating in stocks?" ”

"It's literal, since the use of technical analysis when we trade stocks will be affected by subjective factors, then we don't rely on people to analyze.

To put it simply, it is to adopt a mechanical trading method and completely abandon human judgment. ”

"Mechanical Transaction Law? I seem to have heard of this, it seems that there are many big institutions on Wall Street in the United States that are studying this, and they seem to call this programmatic trading. ”

"That's right. Mechanical trading is also known as programmatic trading, and it can also be called quantitative analysis. To put it simply, it is to study a set of trading programs through the analysis of a large number of stock historical data, and then input a large amount of historical data into the computer for simulation calculation, and then find a method with the highest theoretical return. ”

"The moving average trading method you just mentioned is actually a mechanical trading method, right?" Lu Xiaoqi is relatively young, and he usually knows a lot of new things online.

"Yes, the moving average trading method is the simplest mechanical trading method, all we need to do is execute the trade strictly according to the plan. Buy when the stock moving average is a golden cross, and sell when the stock moving average is a dead cross. ”

"It's so easy to make money? Isn't it too easy to trade stocks? Lu Xiaoqi was skeptical.

"Of course, it's not that simple. First of all, different stocks have different frequencies, just like the strings of a violin, each one emitting a different sound.

Some stocks have an average of 20 trading days for a small cycle, while others have a cycle of 5, 60 days or even longer.

Therefore, we can never generalize about different stocks, and simply use the same moving average parameters, which will make our gains less.

If we are unlucky, the parameter period of the moving average and the frequency of the stock are opposite, then we are likely to buy at the highest point and sell at the lowest point, not only will we not make money, but we will lose a lot of money.

Therefore, every time we operate a stock, we first need to analyze the cycle frequency of the stock through historical data to find the two moving averages that are most suitable for the stock.

Of course, this refers to the use of moving averages, we can also use other technical indicators, such as MACD, VR, etc., to determine the trend, but we also need to adjust the indicator parameters. ”

Lao Xu listened to Sun Haoyang's introduction and joked: "Although the job you said sounds a little troublesome, the technical content is not very high."

This kind of thing can be done by a random college student, and even if we find someone who can code, we don't need to do the math ourselves, and just let the program calculate the results.

If we all adopt this strategy in the future, won't our old bones be useless? ”

Sun Haoyang shook his head and said, "Uncle Xu, your idea is very wrong. The biggest advantage of the trend trading method is that although it is a mechanical trading method, there is no need for human judgment when performing trading operations, but we still have one of the most important tasks to do, that is, stock selection. ”

"Do you mean to choose stocks that are suitable for trend trading? Are there stocks that can't be operated using the trend trading method? ”

"It's also important to determine if a stock is suitable for trend trading, but it's even more important to choose a stock that will rise as much as possible.

Trend trading is magical, but at the end of the day, you have to go up in stock to make money. If the stock rises very little or even goes all the way down, even the trend trading method will not be able to make money, at most it is to ensure that you lose a little less.

On the other hand, if you can pick a big dark horse stock, using the trend trading method can ensure that you will never go short, and you can definitely escape the top.

You no longer have to worry about being washed and washed out by the dealer, and you don't have to worry about the dealer shipping to put you in a high position. ”

Lu Xiaoqi was a little moved when she heard this, her eyes widened, and she seemed to have seen stacks of banknotes flying in her eyes: "Is this method you said really so smart?" Have you ever tried the trend trading method with a success rate?

I have seen from the Internet that some foreign institutions engage in procedural trading methods, and the success rate can be as high as 80%.

What is the success rate of the moving average trading method you have studied? Is there 80%? Actually, it doesn't have to be that high, 70% is also very good. ”

Sun Haoyang looked at Lu Xiaoqi's expectant eyes and said softly: "According to my research and calculations during this time, the success rate of the moving average trading method is about 30%. ”

"30%, that's good...... Well? Only 30%? Are you mistaken? Even if I buy stocks with my eyes closed, I still have a 50% accuracy rate, and a 30% success rate, isn't that going to be a loss? ”

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