Teaching You to Trade Stocks 26: How to Avoid Market Risk
2007/1/30 15:09:57
Before proceeding with a deeper analysis of hubs, let's write this chapter first. Note that this isn't a superficial discussion of market risk avoidance — this is a fundamental analysis of the issue.
First, you need to understand what market risk is. Various qualifiers can precede the word "risk" — policy risk, systemic risk, trading risk, liquidity risk, business risk, and so on — but from a purely technical standpoint, all risks must inevitably manifest in price movements. All risks, at their root, ultimately reflect as the risk of price fluctuation. For example, some stocks have very high P/E ratios, but their prices just keep rising. From a purely technical perspective, you can only measure risk technically, without considering things like P/E ratios.
The most important premise for this ID's theory to hold is that the trading instrument being analyzed must continue trading within a foreseeable time frame. For example, if a stock being traded on a daily chart level is going to stop trading a week later, that's meaningless because the most basic premise no longer exists. Of course, if you're trading on a 1-minute level, then even a stock that stops trading a week later has technically controllable risk. The only thing that cannot be controlled is not knowing when trading will suddenly be halted — this is the greatest Achilles' heel technically. Therefore, this ID's theory is not omnipotent — the one thing it cannot handle is when trading is suddenly stopped, and the theory's premise no longer exists. Of course, there's something even more extreme: when trades are declared void — which has the same effect as stopping trading. This is absolutely not a fairy tale; in immature markets, it's not surprising at all. For example, the famous "327 Incident" — this ID was definitely the biggest victim of that event. On that day, this ID closed the long positions held for many days at the high because technically a pullback was certain. When Wanguo went crazy driving down to the limit, this ID went all-in opening long positions at 147.5 yuan. Yet the next day the trades were declared void! Fortunately, this ID reacted quickly, rushing into other contracts before they hit their limits, later concentrating everything into the 319 contract, holding until around 190 before closing positions, then immediately switching to stocks. Just after buying in, the next day they announced the suspension of government bond futures — the stock market went from 500-something points to 900-something points in three days. So this ID has deep feelings about government bond futures, mainly because of that one time when trades were voided. Thankfully, this ID followed discipline at the time and didn't get greedy by opening short positions, otherwise it would have been disastrous. Also, getting out on the last day avoided all the subsequent trouble and caught a stock market bottom. Back then, in the so-called VIP rooms, there were people dedicated to calling in orders, phoned directly to the floor's red-vested brokers. When the market wasn't busy, you could even chat with the red-vests — it was certainly more personalized, unlike now where it's basically computer-to-computer with no human touch at all. This ID started trading stocks in early college days, going to the securities office every day. Young in age, but my trading career goes way, way back. Pitifully, I basically never attended a single class in college — except for exams, I never saw my professors. Everyone, please don't follow this example.
After saying all that, the point is simply this: things like trades being voided and sudden suspension of trading are not things this ID's theory can control. When this ID closed positions on the 319 contract on the last day, it definitely wasn't based on reading charts — it was the experience of the 327 voiding that severely taught this ID a lesson, leading to an attitude of absolute distrust toward the management's outrageous stupidity and complete lack of credibility, getting out first to avoid another voiding. But as long as trading continues and trades count, then this ID's theory has no blind spots requiring special attention. So when applying this ID's theory, the only risk you need to guard against is whether trading can continue and whether trades count. For instruments that are going to stop trading, better not use any theory — just go to a casino instead. As for trading halts, those don't affect the theory's risk control. All other risks will inevitably be reflected in the price movement, and as long as the movement continues and won't suddenly be stopped and gone forever, then all risks are within the control of this ID's theory. This is the most crucial conclusion and must be clearly understood first when applying this ID's theory. But even more important is that trading cessation comes not from market causes but from oneself. Any trading requires money — meaning the prerequisite for trading is having money first. Once the money has a time limit, it's equivalent to automatically setting a trading cessation deadline. This kind of trading is the most common among all failed trades. In the past, many people died from margin violations, which was essentially this situation. The money for any trading is best without any time limit, and if there really is some deadline, it should be long enough. This is an extremely critical point in investing. Money with a deadline — the only possibility is to lower the operating level sufficiently low to control the deadline risk as much as possible, but this is just a last-resort measure, best avoided.
Someone might ask: what if business performance suddenly deteriorates or there's bad news? Actually this kind of question is meaningless. Even in mature markets, such impacts are reflected in the price movement beforehand, let alone in Chinese society — what news can possibly be unknown to anyone in advance? You not knowing doesn't mean others don't know. You not reacting doesn't mean others don't react. And all of this, regardless of whether you know, will inevitably be reflected in the price movement. By the time the news becomes clear, everything is already too late. How are price movements created? They're piled up with money! In this capitalist society, what could be more trustworthy than something piled up with real money? Beyond price movement, what else is worth believing? And those things supposedly more worth believing — which of them isn't built on money? The capital market is a game of money — besides money, it's still money. Only money is truly trustworthy, and the trajectory of money moving in the market is the price movement. This is the only thing worth observing in the market. All fundamental analysis, news analysis, and so on must ultimately be realized in price movements. Unless you let real money do the talking, everything else is just self-indulgence. As long as money moves, it inevitably leaves traces and is inevitably reflected in price movements.
In the market, the only activity is essentially the exchange of money and stocks. Stocks are just pieces of waste paper — all that fundamental analysis, this value and that value, ultimately it's all nonsense. A stock is just waste paper whose sole function is to serve as a certificate that lets you legally exchange one sum of money for another sum of money after a certain period. The essence of trading is to invest a sum of money and exchange it for another sum after some time, with the certificate being the trading instrument. In essence, anything can be a trading instrument. The so-called value of stocks is nothing but bait to lure you into putting your money in. Anyone applying this ID's theory must first clearly recognize this point. For the money you invest, certificates that can turn it into more money in the next moment have value. If there were a machine where you put in 1 yuan and 1 trillion yuan came out 1 second later, only an idiot would trade stocks. Unfortunately, no such machine exists, so we can only play in the capital markets. In the market, no stock is worth developing feelings for. No stock can bring you returns — what brings returns is your wisdom and ability, the wisdom and ability to turn money into more money at another time. Stocks are forever the inferior party — anyone who gets pushed around by stocks is even more inferior than that.
Similarly, the market's only risk is that the money you invest cannot be exchanged via the corresponding certificate for more money at a later moment. Beyond this, all other risks are bullshit risks. But any certificate is essentially waste paper — any transaction at any price above 0 necessarily carries risk, meaning it may result in the invested money failing to be exchanged for more money at some future moment. So trading risk always exists. Then, what possibility exists that makes trading completely risk-free? The only possibility is that you possess a negative-cost certificate. What is a true master, an eternally undefeated master? Someone who has the ability to turn any certificate into a negative cost within the relevant time period. For a true master, what you trade doesn't really matter — as long as the market fluctuates, any certificate can be turned into a negative cost over a sufficiently long time. Essentially, this ID's theory only explores one question: how to turn any certificate at any price ultimately into a negative number over a sufficiently long time.
Any market fluctuation can provide positive support for this activity of ultimately turning certificates negative. Whether buying first, selling later, or selling first, buying later — the effect is the same. But many people only know how to move in one direction and don't know how to move back and forth — these are all bad habits. Whether the market rises or falls, for you it's always an opportunity. You can always be in buying and selling — whenever there's a sell point, sell; whenever there's a buy point, buy. The only thing that needs to be controlled is the quantity. Even for someone with capital like this ID's, this ID will still participate in 1-minute sell points — perhaps selling only 50,000 shares, buying back at the 1-minute buy point when it drops back, with the spread being just 0.1 yuan. The entire operation, after fees, might yield only 4,000 yuan in profit — but isn't 4,000 yuan money? That's enough for a typical family's monthly expenses. And more importantly, this kind of operation can lower this ID's overall cost. Even by 0.000000001 cents — this ID must still do it. So for this ID, any sell point is a sell point and any buy point is a buy point. The only thing this ID needs to control is the quantity of buying and selling. The meaning of timeframe levels, in fact, has only one significance — it's basically only related to trading quantity. The trading quantity for daily-level buy/sell is of course much larger than for 1-minute level. This ID can use larger quantities to participate, for example 1 million shares, 10 million shares, or even more. For any stock with a positive cost, this ID never trusts it — the only thought is to turn it negative as quickly as possible. Warrants are no exception. For example, a certain call warrant that has been delisted — when this ID finally sold it all during the last few days as it rallied above 1 yuan, the cost at that point was negative 2.80 yuan. Note that this ID's position size was constant throughout — the same quantity from the beginning. Up and down, reducing at sell points and restoring to the original amount at buy points, but absolutely never adding to the position. Buying the full amount from the start.
Therefore, from this perspective, stock selection is unnecessary. The only thing worth selecting is stocks with large volatility, and this cannot be completely predicted — just like whether a boy-toy will perform, who knows about next time? For this ID, the market has never had any risk, unless the market moved in a straight line forever. Of course, for investors with small capital, you can absolutely go all-in and out, roaming between different certificates. The efficiency of this approach is naturally the highest, though it's not applicable to large capital. Large capital cannot always buy sufficient quantities. Generally speaking, this ID only enters at monthly chart buy points, or at minimum weekly chart buy points. Chasing highs is impossible — that would make the process of turning negative much too long. Moreover, entry is always when the market makers have nearly finished accumulating, generally at second or third-type buy points. This way you can trick market makers into pushing prices down to give you some shares. Buying from retail investors is too exhausting. Generally, this ID doesn't enter at monthly first-type buy points — that could turn you into the market maker yourself. For market makers, this ID is the most terrifying enemy. This ID is like a blood-sucking machine — no matter whether the market maker is pushing prices up or down, all they can do is create opportunities for this ID to reduce costs to negative. Whatever they do is useless. Market making is something this ID stopped doing long ago. This ID only plays the market makers' ancestor. Any market maker — once this ID has their sights set, they must pay tribute to this ID.
A long enough pool of money + skilled application of this ID's theory = invincible in battle. The market — where's the risk?
Plagiarism is strictly prohibited; violators will be prosecuted.
Replies
缠中说禅 2007/1/30 15:27:49
[Anonymous] 过客
2007-01-30 15:19:09
Today's medicine stock got a bit damp, Chan sister
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That's right — this ID warned you to get out the past two days and you didn't listen. Now you're asking what? Right now the task for those who sold is to find an opportunity to buy back, not to ask this kind of pointless question. If you can't fix this bad habit, it's very hard to improve.
缠中说禅 2007/1/30 15:29:26
[Anonymous] 淡定
2007-01-30 15:26:05
Great work, blogger! Holding 000001 firmly. Sold a small portion of 600050 this morning — should I be avoiding short-term risk now?
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Look at technical buy points — you must look comprehensively. If the 30-minute is very strong, even a 1-minute buy point is worth buying back. But if the 30-minute is very weak, then at least wait for a 30-minute buy point to appear.
缠中说禅 2007/1/30 15:34:55
[Anonymous] 雨中荷
2007-01-30 15:19:08
Hello blogger!!
Today I went all-in on 000999 at around 11.30 yuan, and it hit the limit down at the close. Blogger, what should I do — exit or wait and see??? Thank you!!!!!!!!
==
Why did you buy there in the first place? Buy on a 1-minute divergence? A stock that doubled in one month and you buy on a 1-minute divergence? Stay stuck for now and reflect deeply. It seems this ID's reminders from the past few days were said in vain. The medium-term for this stock is definitely fine, but you deserve some short-term suffering — otherwise you'll never improve.
From now on, this ID won't give wash trading reminders anymore. What's the point when saying it does nothing, and it only creates dependency for everyone.
缠中说禅 2007/1/30 15:36:45
[Anonymous] 天生迷糊
2007-01-30 15:31:56
Hello, Math Girl
Today a lot of people didn't dare to buy or sell — the market was jerking around. Can you give us some guidance?
Thank you, I'm currently studying your lessons, much appreciated!
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First get the theory this ID has explained completely clear. Today's market movement was absolutely textbook — not a single surprise. Look at the 5-minute chart.
缠中说禅 2007/1/30 15:45:12
[Anonymous] 锅贴
2007-01-30 15:41:46
LZ, may I ask you a question — do you think 600090 can develop a medium-term trend?
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Isn't it already in a medium-term trend right now?
缠中说禅 2007/1/30 15:47:10
[Anonymous] 学习
2007-01-30 15:43:11
I spotted the 5-minute divergence, nothing new compared to last time.
The only difference is that last time the 5-minute pullback was clearly a completed trend type, whereas this time I couldn't identify a hub in the pullback.
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Recognizing it is step one. Step two, and more importantly, is execution. This is not a stock commentator training camp — knowing is useless; the key is execution. Execution involves the question of quantity, plus the difference between individual stocks and the broader market — all of which must be continuously improved through practice.
缠中说禅 2007/1/30 15:55:48
[Anonymous] 雨中荷
2007-01-30 15:51:54
Anonymous] Yuzhonghe
2007-01-30 15:19:08
Hello blogger!!
Today I went all-in on 000999 at around 11.30 yuan, and it hit the limit down at the close. Blogger, what should I do — exit or wait and see??? Thank you!!!!!!!!
==
First, why did you buy there? Buy on a 1-minute divergence? A stock that doubled in one month and you buy on a 1-minute divergence? Stay stuck for now and reflect deeply. It seems this ID's reminders from the past few days were said in vain. The medium-term for this stock is definitely fine, but you deserve some short-term suffering — otherwise you'll never improve.
From now on, this ID won't give wash trading reminders anymore. What's the point when saying it does nothing, and it only creates dependency for everyone.
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Sorry blogger, I bought after seeing the report below, and then when I saw a buy point appear on the 1-minute chart I thought the wash trading was over!!!
Reporter-in-training Wu Lijuan, Intern Reporter Li Baohua, Shenzhen report
The mystery of Sanjiu's restructuring will be revealed at the end of this month. Barring no surprises, China Resources will be the final winner to take over Sanjiu. This means the nearly three-year Sanjiu restructuring saga has finally been settled.
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Reporters already know the actual situation, so how is the market maker supposed to play? What do they mean by "barring no surprises"? The key issue right now is the price — does China Resources want to buy at the current price? In their dreams!
缠中说禅 2007/1/30 15:57:47
[Anonymous] 糊涂
2007-01-30 15:56:28
Chan sister, hello
You didn't include coal in the sectors you mentioned — what about it going forward?
Datong Coal hit a new high on its 30-minute chart today, but the MACD bars are very short — is this divergence?
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Energy is fine, no problem. This ID can't buy every sector. Just because this ID doesn't buy it doesn't mean it's bad.
缠中说禅 2007/1/30 16:03:26
Attention everyone!
In negotiations, you don't know the final buyer or price until the very last moment — it's the result of multi-party leverage. This kind of thing can't possibly be known by reporters. The key is to think about why so many parties want to acquire it. What's the acquisition price? Does this support the stock price and further upside? Of course, all of this is ultimately reflected in the price movement — just watch and you'll know. This ID naturally has very accurate information, but sharing it serves no purpose and would only create bad habits for everyone.
缠中说禅 2007/1/30 16:14:03
Everyone, please stop asking about specific individual stock trades. Just trade according to the charts. Set your timeframe level, but don't be too mechanical — coordinate with the larger timeframe. Otherwise, if everything is done on a 1-minute basis, it becomes mechanical. First, judge the trend on the larger timeframe correctly. For example, if the daily chart is in an uptrend, then even if you exit on the 1-minute, make sure to buy back in time. And ideally don't use the 1-minute — 5-minute or even longer is fine, unless it's a final rapid surge, in which case coordinate with the 1-minute chart. 600779 is a good example — study it carefully.
缠中说禅 2007/1/30 16:22:09
wy1499
2007-01-30 16:09:40
Yuzhonghe, it's fine. I also bought some above 11.20. The medicine stock showed 5-minute divergence too — enough for a short-term trade. At ICBC's current price level, for a big drop to happen it needs to rally first. So just use this medicine stock to practice short-term skills. I do my short trades with nearly six-figure capital too. Without going all in like this, you can't build your nerve. If you want to make money in the stock market, first you need to stop treating money as money — it's just chips.
What does the blogger think?
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The first thing is to not treat stocks as stocks — they're just certificates. But short-term trading is most suitable when the daily or other large timeframes are oscillating. If the daily chart is in an uptrend, too much short-term trading is inappropriate — especially if your technique isn't up to par, you'll miss the boat and get squeezed. And in a daily chart downtrend, you'll get deeply trapped. So first judge the movement on the daily and other large timeframes correctly, then talk about short-term trading.
Note that selling wrong is no big deal — absolutely don't buy wrong. Better to miss a buy than to miss a sell. However, being stuck sometimes doesn't matter, especially when the medium-term view is still bullish. Appropriate short-term trading can bring the cost down, effectively getting you back to the right position. But this all requires practice and constant reflection.
A master is someone who can do short-term when short-term is needed, long-term when long-term is needed, and can control the quantity. Quantity is actually the most critical — how much to sell, how much to buy — this matters more than buy and sell points. Though for small capital this isn't very significant.
缠中说禅 2007/1/30 16:23:17
[Anonymous] 老虎今晚吃草
2007-01-30 16:21:59
Making the cost basis negative means constantly doing swing trades, using the market maker's wash trading to bring down your own cost. That's how I operated Zhenhua Technology — going back and forth within a 20-cent range. But I'd like to ask Miss Chan: right now 000733 is clearly in a female-on-top position with no kiss — will there be a climax? What's its outlook? Do I have to wait for the first kiss?
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Keep studying. Analyze using the hub concept and you'll see things more clearly.
缠中说禅 2007/1/30 16:25:02
[Anonymous] 善存
2007-01-30 16:16:39
Luckily I bought nickel. Yesterday I exited at a certain level's sell point, and today I entered at a 1-minute buy point. Small capital invested — just practicing, doesn't matter even if I lose.
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Sometimes you don't have to stick to one stock. You can switch around. For example, a 30-minute buy point is definitely more attractive than a 1-minute one. For small capital, this is even more important.
缠中说禅 2007/1/30 16:27:28
[Anonymous] 方法方法方法
2007-01-30 16:23:44
Chan kitty, at 14:30 today many stocks suddenly dropped sharply — no warning signs beforehand.
Could you please explain? I'm still learning.
For example 600075 — the tail-end sudden plunge. Is this kind of phenomenon the collective intent of market makers?
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Your thinking is wrong. You should only care about buy points and sell points. This morning there was a 5-minute divergence — if your stock moves in sync with the market, then after the sell point appeared, the only thing you need to care about is when a buy point will appear. As for how the price moves between the sell point and buy point, it's irrelevant. For practical trading, that's a completely false question.
缠中说禅 2007/1/30 16:31:31
[Anonymous] 笨人
2007-01-30 16:04:02
Chan sister, for each stock, do you choose weekly, daily, or minute charts to determine buy and sell points based on the stock's market cap? I'm unclear about this. Please tell me, thanks.
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Based on your own capital size. Unless your capital is very large, there's no need to consider market cap. Moreover, buy and sell points have levels. What level to exit at isn't mechanically fixed — it requires comprehensive consideration across different timeframe levels. This is a process of practical training. But there are some basic principles that will be discussed later.
缠中说禅 2007/1/30 16:40:14
[Anonymous] 炼铁设备
2007-01-30 16:27:29
Today, 600018's 30-minute hub No. 3 segment is basically complete. With this kind of slow-moving trend, will the subsequent bounce lack force?
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For a large-cap stock, its movement is actually pretty decent. Medium-term, no problems. Use short-term buy and sell points to bring down your cost.
缠中说禅 2007/1/30 16:43:37
[Anonymous] 炼铁设备
2007-01-30 16:27:29
Today, the 30-minute hub's No. 3 segment of 600018 has basically completed. With such a slow-moving trend, will the subsequent bounce lack strength?
[Anonymous] 雨中荷
2007-01-30 16:39:51
Thank you blogger for the teachings!
Retail investors and the blogger operate in different circles. As a retail investor, all information can only come from the internet or newspapers, but what you get is usually either outdated or fake information planted by market makers!!! Since discovering the blogger's articles, I've treated them like treasure, printed them out and read them N times, but due to my own dullness I still haven't truly grasped the essence of the articles!
From this lesson I've come to understand that for large-level adjustments or declines, one should reference the sub-level trend — referencing too low a level has little significance. If it's an uptrend, you can reference 1-minute buy points for entry.
Classmates, please don't hate me — I've dragged everyone down!!!!!!!!
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If you sold at the high and bought back a bit too early, it's not a big problem — at least you got the spread. If you're a new buyer, then you need to seriously reflect — you should have waited for at least a 30-minute buy point. Moreover, with so many good stocks out there, why did you have to buy that one? Don't develop feelings for stocks — only develop feelings for buy and sell points.
缠中说禅 2007/1/30 16:47:44
[Anonymous] 中间体
2007-01-30 16:42:49
Among military stocks, Hongdu Aviation hasn't risen yet. A standard No. 3 buy point appeared today, right, Chan sister?
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Didn't this ID say? Only aerospace — this ID has no interest in aviation. Look at why the Americans have been so anxious these past few days — would America be anxious about Chinese airplanes?
缠中说禅 2007/1/30 16:49:34
[Anonymous] 中间体
2007-01-30 16:42:49
Among military stocks, Hongdu Aviation hasn't risen yet. A standard No. 3 buy point appeared today, right, Chan sister?
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However, once aerospace moves, aviation will follow. So you can trade based on the technical signals.
缠中说禅 2007/1/30 16:51:33
[Anonymous] 手中无股
2007-01-30 16:46:54
Poster, why do you never reply to any of my questions about stock index futures? Is there something going on?
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Master stocks first before talking about futures — otherwise it's a death sentence.
缠中说禅 2007/1/30 16:56:20
[Anonymous] 小牛
2007-01-30 15:56:27
I've asked the blogger questions twice these past two days but the blogger didn't see them — maybe I asked too late. Let me try again today, hehe
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[Anonymous] CCTV
2007-01-29 20:33:30
[Anonymous] 小牛
2007-01-29 19:37:45
[Anonymous] tryrtytry
2007-01-29 19:16:11
I've been studying your articles recently.
May I ask, what is the meaning of Nanquan killing the cat?
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Seeing you've asked several times, I can't help but say something:
The blogger is busy — you should first slay yourself, then the blogger will answer you
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It's just that I don't know where to begin, hehe
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No need to ask the blogger about this — if you don't know where to begin slaying yourself, where would you begin slaying the cat?
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Raise the blade and let it fall
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Don't ask about Nanquan yet. First thoroughly understand yesterday's Analerta commentary. If you can't even penetrate the Analects, talking about Zen is just nonsense. Once you've broken through the Analects, then talk about Nanquan.
缠中说禅 2007/1/30 16:58:40
[Anonymous] 中间体
2007-01-30 16:51:43
What a pity — but I already bought Hongdu Aviation today.
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Bought is bought. All stocks are essentially the same — the key is proper execution.
缠中说禅 2007/1/30 17:01:33
[Anonymous] 小牛
2007-01-30 16:56:37
Seems like I got off to a bad start today, hehe. Why do you always only answer stock questions?
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The answer is above — first penetrate all of humanity's knowledge, then talk about Zen, otherwise it's just fooling around. Don't use the Sixth Patriarch's illiteracy as an excuse to be lazy — the Sixth Patriarch is the Sixth Patriarch, you are you.
缠中说禅 2007/1/30 17:06:27
[Anonymous] 小牛
2007-01-30 16:59:35
You've already translated the Analerta into vernacular — there's nothing difficult left, hehe
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Vernacular means it's not hard? Thinking you understand is often the greatest confusion — don't let things pass too easily.
缠中说禅 2007/1/30 17:07:36
[Anonymous] 老虎今晚吃草
2007-01-30 17:04:49
I'd like to ask the blogger — I've studied "no trend, no divergence" carefully. In female-on-top position, divergence must occur at the No. 1 kiss, meaning the 5-day and 10-day lines cross? 6.62 to 6.45, then a sudden big drop, and we look for a No. 2 buy point? It's definitely not consolidation, so can I still hold 000733 for the medium term?
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First read through all the lessons once. If reading one chapter solved all problems, why would the other chapters be written?
缠中说禅 2007/1/30 17:12:54
[Anonymous] kongh
2007-01-30 17:05:46
May I ask Chan MM, on 600550's 5-minute chart, are there signs of divergence beginning in the last 10 minutes?
This is my No. 1 time analyzing charts using your theory — please don't hesitate to enlighten me
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First clarify the preconditions for divergence to hold. How can there be divergence within a consolidation? You must first find two trending segments before divergence can be discussed. If using MACD to judge consolidation divergence, you need to look at the next lower level. For 5-minute, look at the 1-minute.
缠中说禅 2007/1/30 17:18:14
[Anonymous] Xiao Ming
2007-01-30 17:07:18
Chan MM, I'm here
China's missiles shooting down satellites — you really know your stuff about military matters too. I'm also very interested in this.
The 30-minute charts of both the Shanghai and Shenzhen indices have formed a horn shape, also looks like that... hehe. Doesn't look good going forward, right?
I entered that pharma stock today — how's the short-term outlook?
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This kind of question shouldn't even be asked. First you should consider what technical pattern you bought based on and why you bought.
缠中说禅 2007/1/30 17:28:54
Attention everyone!
Please stop asking so many questions about specific stocks. The key is to improve your own technique — this ID has zero interest in being Lei Feng. Why could the Chinese New Year gift-free stock go from the low back up 30% in three days? Because the wash was thorough. Sometimes a stock can't go up simply because too many people are bullish on it — when everyone is bullish, who plays Lei Feng? It's like that Shandong situation, among several parties, nobody wants to be Lei Feng, so why should this ID be Lei Feng? This is something this ID said ages ago.
Whether or not you're Lei Feng, you still need to eat. Signing off — going for dinner. Goodbye.
缠中说禅 2007/1/30 15:25:37
Attention everyone!
If you're only now chasing stocks higher, then even God can't save you. This morning the market had an obvious 5-minute divergence, triggering an adjustment — it's the most normal thing. But individual stocks are fine. Aren't this ID's agriculture and military picks doing great? Aren't No-Gift-Giving and Zhejiang People continuing to hit new highs? The five sectors this ID recently switched into were not switched randomly — agriculture, environmental protection, and military are the most important areas for China's future and most significant for national security. There's plenty of policy support coming later. Think about why the Central Committee's Document No. 1 is about agriculture? Of course, this ID knew all this long ago. What does Beijing have the most of? What's most accurate? On fundamentals alone, those American ghosts can't compare to this ID.
As for the pharmaceutical pick — this ID told you at the high that wash trading was coming. If you couldn't even avoid that, then this ID has no way to help. If you're still holding, just keep it — after the wash, it'll continue. From now on, this ID won't give reminders. Warnings at the high weren't followed, and only after the drop do people ask what to do. How should this ID know what to do? All this ID can say is that this short-term trade was not for you to enjoy — keep practicing your technical skills.
The market oscillation continues, so you must identify sell points. Leave when you should, buy back when you should — be flexible. Of course, if your technique isn't up to par, just ride the ups and downs, and practice technique when it improves.