Chapter 7 Technical Analysis
The person who disagreed with Sun Ce's speech was none other than his teenage son Sun Haoyang.
Although Sun Haoyang is not very old, his understanding of stocks is no less than that of everyone present.
The disaster of that year left an indelible deep impression on Sun Haoyang's young heart.
In the face of a difficult situation, people generally have two choices, one is to cower and give up on themselves, and the other is to work hard to overcome this difficulty.
Sometimes, giving up is the best choice, especially for ordinary people.
Everyone is good at different things, and most people are not good at finance. The ability to study stock trends, analyze market changes, and figure out the mindset of investors is not available to everyone.
This requires not only hard work and cultivation, but also extraordinary talent and environment.
For example, all people who speculate in stocks must have heard of Warren Buffett, and many people also dream of becoming the next Buffett. But few people know that Buffett's father was a member of Congress and was inextricably linked to the members of the Securities and Exchange Commission.
No one knows that Buffett's father gave Buffett hundreds of thousands of dollars in stock speculation, which is equivalent to 100 million yuan now, and most of the customers in the private equity fund established by Buffett are also introduced through his father's relationship.
The stock market is a big casino. If you don't have the support of sufficient capital, financial talent and energy to devote yourself to it, don't touch stocks easily, and it's better to hide as far as you can.
There is a saying in the stock market that one win, two draws, and seven losses. It is said that nine out of ten people who speculate in stocks will not make money. Therefore, in terms of probability, the chances of making a fortune in Macau may be higher than making money in the stock market.
Unfortunately, few retail investors attracted by the stock market care about how the seven losers lost, they only cared about how that one person made money, and dreamed that they would be as lucky as him.
After facing the great changes in the family situation, Sun Haoyang bravely chose to face the difficulties. From then on, he set his ambition for this life: "What the stock market took away from me, I must take back it doubly!" ”
Because of his poor family, Sun Haoyang did not have any toys in the next few years.
The children of poor families are in charge early, and Sun Haoyang's thinking in distress is obviously much more mature than that of children of the same age, so he seems out of place among the children around him and is a little out of place.
But this is also exactly what he wants, he didn't want to waste his time with those friends who are obviously naïve and simple.
In his free time, he prefers to sit quietly at home by himself, reading books and thinking about problems.
"Handicap Secrets", "How to Beat the Banker", "The Winning Method of the Stock Market", "Teach You to Dance with the Banker", "Securities Investment Analysis", ...... These securities professional books that adults will find obscure and difficult to understand, but Sun Haoyang reads them with relish, and often reads them for an afternoon.
The family didn't have the money to buy a computer, so Sun Haoyang drew the market data from the newspaper on a paper roll as a K-line chart, and took it out to ponder when he had nothing to do. By the time he grew up and officially started trading stocks, the scroll was nearly ten meters long.
This is the kind of Sun Haoyang, who is very disdainful of the content of his father's speech on technical analysis.
In Sun Haoyang's view, what his father said seems to be very reasonable on the surface and can be verified through a large number of practical cases, but in fact, these theories are often contradictory and lack operability.
If someone really follows the technical analysis method he said to speculate on stocks, there is a high probability that they will lose a mess.
For example, Sun Ce previously said that the short-term moving average and the long-term moving average golden cross are buy signals for stocks; Later, he said that if the stock price is too far away from the moving average, it will fall back to near the moving average for support.
Both of these claims seem to make perfect sense. But if you think about it carefully, when the moving average is golden cross, the stock price will definitely deviate from the moving average, and only in this way will the short-term moving average be pulled upward. So at this time, should you buy the stock according to the golden cross signal or sell it because the stock price is too far away from the moving average?
There is a clear contradiction between these two technical approaches.
Then, Sun Ce proposed that the long-term moving average would form a support for the stock price on the way up, but then said that if the moving average is pierced, it will change from support to block.
So in practice, which moving average will form support? And in the process, will the moving averages that have been broken form a barrier?
Obviously, no one can say clearly until the answer is revealed.
These analyses are actually not complicated, even Sun Haoyang, a teenager, can figure it out, and it is impossible for adults with normal IQ not to understand it.
The reason why those students listened with fascination was because they didn't even think to doubt whether Sun Ce's technical analysis theory was correct.
But Sun Haoyang is different, Sun Haoyang is very clear about his father's experience, since his father once lost a lot of money in the securities market, then there must be a problem with his securities investment philosophy.
Other students are listening to lectures and learning with an open mind, but Sun Haoyang is listening to what his father teaches with a critical attitude.
To put it simply, he didn't believe every word or even punctuation mark his father said.
At this point, some people may find it strange, you don't believe in your father's technical analysis theory, so you just don't listen to it, why do you still listen to it more seriously than anyone else?
The answer is actually very simple and ridiculous, because Sun Haoyang believes that "negative and negative are positive".
China's current stock market can basically be said to be a zero-sum game, or even a negative-sum game. Because the amount of cash dividends in the stock market every year is far less than the various fees generated by transactions, not to mention the blood pumping of new share issuance and refinancing.
So in a zero-sum game, if you hold the same view as most people and use the same operating methods, you will lose money 100%.
If you want to make money in China's stock market, you must be on the opposite side of most people. Everyone sells when they buy stocks, they buy when they sell stocks, they are greedy when they are afraid, and they are afraid when they are greedy.
Only with this ability to think in the opposite direction can it be possible to make money from China's stock market, at least that's what Sun Haoyang thinks.
In Sun Haoyang's mind, his father is a typical failure.
Of course, this does not mean to look down on his father, but everyone has what they are good at and what they are not good at, and Sun Haoyang's father just chose a path that is not suitable for him.
Since he knows that his father is not suitable for stock trading, as long as he thinks against him and follows the principle of negative and positive, it is easier to understand some ways to continue to make profits from the stock market.
If you want to hold a contrary view to your father, you must at least know what your father thinks. So Sun Haoyang appeared in the classroom at this time.
Sun Haoyang's father was very happy that his son was able to come to the classroom, and he felt that it was a good thing that his son was interested in investment and financial management at a young age. But he never dreamed that his son came to dismantle him.
It is not difficult to see from what Sun Haoyang's father just taught that he is a staunch supporter of technical analysis, so Sun Haoyang completely denies technical analysis, at least those technical analysis theories proposed by his father.
From the analysis just now, Sun Haoyang easily found the contradictions and mistakes in his father's technical analysis theory, but these problems are actually not the most fatal problems in Sun Ce's speech, the real fatal problem is mentality.
As we all know, stock technical analysis is actually a kind of probability analysis, and it is impossible for any technical analysis method to be 100% correct, in fact, the accuracy rate of most of the technical analysis theories summarized by the predecessors is only 70% or even lower.
In addition, Sun Ce just talked about one of the moving average analysis methods in the technical analysis method, and Sun Haoyang found many flaws. If you take out other technical analysis theories, such as cycle theory, wave theory, golden section theory, and various technical analysis indicators - Bollinger Bands, MACD, VR, etc., there must be many analysis results that are self-contradictory.
If you analyze the technical pattern of a stock, there are five technical theories that support a future stock price rise, and another five technical theories that indicate that the stock price will fall in the future, which is a very common situation, in this case, how do you judge it?
The end result is likely to depend on your subjective wishes.
That is, if you want the stock price to go up and down, you will be more inclined to believe in the technical theory of the rise; If you want the stock price to fall, then you will be more inclined to look for technical theory support for the decline.
The point to be plain is that you are not using technical theory to predict the future market trend, but first predicting the future market trend, and then looking for technical theory to support him.
It's like if a woman doesn't like a man, she will definitely feel that this man is full of shortcomings; And if it's a man she likes, it's all advantages, and she even thinks that even the posture of picking her nose is very handsome.
Therefore, ordinary technical analysis is, to put it bluntly, investors find an excuse for themselves to comfort themselves and cheer themselves up when they speculate in stocks.
Of course, Sun Haoyang is not completely denying the role of technical analysis theory, after all, technical analysis is one of the two major stock analysis methods that go hand in hand with value analysis.
Sun Haoyang once saw in a book that the technical analysts on Wall Street in the United States edited the technical analysis indicators into programs, and then put them in the computer to simulate and calculate with a large number of historical stock data, from which they found the technical analysis methods that can really make money and operated in strict accordance with the indicators.
Sun Haoyang believes that this is the real, scientific, rigorous, and well-founded technical analysis method. And the technical analysis method used by the vast majority of people today can essentially be equated with deceptive charlatanism.
But now Sun Haoyang doesn't even have a computer that can be used to watch the market, so he can only use it to watch the market.
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