Teaching You How to Trade Stocks 52: Trading Stocks Is True Buddhist Practice

2007/5/18 8:49:05

This ID has always emphasized that prediction is unnecessary, but this doesn't mean market movements are absolutely unpredictable. On the contrary, market movements can of course be absolutely predicted. However, the prediction here and what's commonly called prediction aren't the same thing. Ordinary prediction is built on a mechanical, God's-eye-view mode of thinking that treats the market as an absolute system unaffected by the observation of participants, and from this constructs a so-called set of prediction standards — a standard built on a flawed mode of thinking. Such prediction never existed in the first place. On this point, if you have any understanding of the historical development of quantum mechanics, it's not hard to comprehend.

The market's predictors, observers, and participants happen to also be the constituents of market movements — this is the most fundamental starting point of market prediction. Therefore, market movement patterns are, at their root, isomorphic to the behavioral patterns of market predictors, observers, and participants. This means that the only absolute and certain prediction possible is the basic form of market movements. Ignorant fools love to discuss so-called price levels, not knowing that price levels are merely a result of basic pattern evolution. They're the "affliction" arising from the "non-affliction" — formed in the present moment. The pattern is the "non-affliction"; the price level is the "affliction that arises from non-affliction." As long as you grasp this "non-affliction," its "affliction" is naturally within your present-moment command. That pursuit of grasping price levels outside the present moment is absolutely brain-waterlogged, because price levels are all formed in the present moment — this is a "non-affliction." Attempting to escape this "non-affliction" to seek its "affliction" — if that's not brain-waterlogged, what is? It is precisely because price levels are the "non-affliction" formed in the present moment during the evolution of basic patterns that there exists the "affliction that arises from non-affliction" of price levels.

Understanding this principle means you finally have the "right eye" for market prediction. Without this "right eye," everything is blind nonsense. And in actual operations, the most fundamental thing is the most basic grasp of fundamental patterns — this is the "non-affliction." Only by standing on this "non-affliction" can you have a present-moment grasp of the "affliction" of price levels. Put plainly, all operational practice ultimately comes down to this. That's why this ID says it's merely a trainer, a guide, because the present moment can only be your present moment. Apart from your operational present moment, it simply doesn't exist. From this, it's not hard to understand another operational "non-affliction" — the operation level you establish in advance. This is "non-affliction." The market, at its root, is only your market. Just as an eye that can only see flowers as flowers will naturally see flowers as flowers, not mistake flowers for monkeys. Science's trick is to first assume that all objects scientifically defined as eyes can only see flowers as flowers — so science is destined to die without a burial place in the stock market.

All markets can only be markets in your present-moment observation and operation. Apart from your present-moment observation and operation, the market doesn't exist for you, or rather, it's completely meaningless. And your observation and operation must have a "non-affliction" premise — that is, your operation level. This operation level is equivalent to an eye that sees flowers as flowers or sees flowers as monkeys. In your world, seeing flowers as flowers and seeing flowers as monkeys share the same basic pattern structure — the key is this pattern, not the different settings of flowers versus monkeys. Therefore, this ID's theory can apply to anyone operating at any level, because the basic patterns across different levels are isomorphic. This is a fundamental characteristic of the market. Note: this characteristic isn't self-evident. The reason it exists is ultimately that market participants share fundamentally the same structure, which, at its root, is greed, anger, delusion, doubt, and pride. One could even say this: across the six realms of reincarnation, for any market-like formation, this ID's theory applies, because the greed, anger, delusion, doubt, and pride are isomorphic. So if the seed of this ID's theory is planted, even if you reincarnate into another realm where there happens to be a stock market, you can still be like a fish in water.

So what are the market's basic patterns? The most fundamental are the repeatedly discussed trends and consolidations based on hubs and levels. And the principle that the level of divergence must not be lower than the level of the reversal is the most fundamental tool of market prediction. For example, if you're a 30-minute level operator, then any 30-minute level decline and any consolidation at 30-minute level or above is unnecessary for you to participate in. Therefore, when a 30-minute top divergence appears, you must absolutely exit. Why? Because this exit is based on an absolute prediction — what follows must be either a 30-minute level decline or an expansion into a consolidation at or above the 30-minute level. This is the most useful, most absolute prediction. This is true prediction. This is absolutely guaranteed by this ID's theory — or rather, this is absolutely guaranteed by market participants' greed, anger, delusion, doubt, and pride.

This ID's theory, at its root, is a study of greed, anger, delusion, doubt, and pride. From this, you can understand why market operations are ultimately a competition within oneself, and why this ID can publicly disclose its theory without affecting its own operations — because as long as this world still has greed, anger, delusion, doubt, and pride, this ID will be like a fish in water. Some people idly talk about studying Buddhism every day. In reality, trading stocks is true Buddhist practice. If you can't be like a fish in water amid these great afflictions of greed, anger, delusion, doubt, and pride and attain great freedom, then your Buddhism is worth exactly squat!

Appendix:

Today, only someone whose brain is entirely waterlogged would think Shanghai was going to make a new high. Even thinking with your toes, you'd know that the pressure of weekend news would cause hesitation in the movement here. Today's balanced market movement is simply a normal reaction to this. Technically, the 4040 point that has been governing the index for N days still can't be held. Of course, that level is given for those who don't understand hubs. If you're familiar with proper analysis, you can find a more precise level.

Early next week, the market's oscillation here must choose a direction. One simplest reason: the 5-day moving average's kiss with the 10-day line is already brimming with spring desire. This directional choice will ultimately lead to a widening of the oscillation range — technically speaking, forming a larger-level oscillation.

The reason Shenzhen has been stronger than Shanghai recently is simply that Shenzhen Component Index's 1/2 line — corresponding to Shanghai's 1/2 line — is at 13,700, with still considerable room. So the subsequent movement involves just two choices: Shenzhen pulls Shanghai up, or vice versa. This divergence between the two markets cannot continue indefinitely.

Every day the market's movement is the best annotation of this ID's theory. Like Shanghai today at 05181326 — how do you identify it in the present moment? What method can precisely capture it? If you still can't figure it out, that proves you need to repeat the lessons. The answer is simple: a strength comparison between two segments of a hub oscillation — 05171430-05181000 versus 05181058-05181326 — using 1-minute MACD as auxiliary, then examining the latter segment's fine details using a method similar to nested intervals for precise positioning. Note: all of this can be done in the present moment, without needing after-the-fact explanation. If the above method is completely foreign to you or you can't figure it out at all, then spend the holiday continuing to study.

This ID has been rather bored lately. Taking a vacation is somewhat impossible — tonight and the next two days are fully booked. To cheer things up, here's a gossip tidbit: that old acquaintance who wrote an article on May 10 got married. The news should be announced today and should be all over the internet — from which you can gauge the weight of that person's articles. One last piece of gossip: this ID's "Guoan-forever-striving-for-first" stock — what rank is its year-to-date gain? How many leaders are ahead that need to be surpassed, so this ID has a target to work toward?

Replies

缠中说禅 2007/5/18 8:50:46
Will append today's commentary at market close. Heading out first, see you later.

缠中说禅 2007/5/18 15:38:20

Today, only someone whose brain is entirely waterlogged would think Shanghai was going to make a new high. Even thinking with your toes, you'd know that the pressure of weekend news would cause hesitation in the movement here. Today's balanced market movement is simply a normal reaction to this. Technically, the 4040 point that has been governing the index for N days still can't be held. Of course, that level is given for those who don't understand hubs. If you're familiar with proper analysis, you can find a more precise level.

Early next week, the market's oscillation here must choose a direction. One simplest reason: the 5-day moving average's kiss with the 10-day line is already brimming with spring desire. This directional choice will ultimately lead to a widening of the oscillation range — technically speaking, forming a larger-level oscillation.

The reason Shenzhen has been stronger than Shanghai recently is simply that Shenzhen Component Index's 1/2 line — corresponding to Shanghai's 1/2 line — is at 13,700, with still considerable room. So the subsequent movement involves just two choices: Shenzhen pulls Shanghai up, or vice versa. This divergence between the two markets cannot continue indefinitely.

Every day the market's movement is the best annotation of this ID's theory. Like Shanghai today at 05181326 — how do you identify it in the present moment? What method can precisely capture it? If you still can't figure it out, that proves you need to repeat the lessons. The answer is simple: a strength comparison between two segments of a hub oscillation — 05171430-05181000 versus 05181058-05181326 — using 1-minute MACD as auxiliary, then examining the latter segment's fine details using a method similar to nested intervals for precise positioning. Note: all of this can be done in the present moment, without needing after-the-fact explanation. If the above method is completely foreign to you or you can't figure it out at all, then spend the holiday continuing to study.

This ID has been rather bored lately. Taking a vacation is somewhat impossible — tonight and the next two days are fully booked. To cheer things up, here's a gossip tidbit: that old acquaintance who wrote an article on May 10 got married. The news should be announced today and should be all over the internet — from which you can gauge the weight of that person's articles. One last piece of gossip: this ID's "Guoan-forever-striving-for-first" stock — what rank is its year-to-date gain? How many leaders are ahead that need to be surpassed, so this ID has a target to work toward?

缠中说禅 2007/5/18 15:39:06

Today, only someone whose brain is entirely waterlogged would think Shanghai was going to make a new high. Even thinking with your toes, you'd know that the pressure of weekend news would cause hesitation in the movement here. Today's balanced market movement is simply a normal reaction to this. Technically, the 4040 point that has been governing the index for N days still can't be held. Of course, that level is given for those who don't understand hubs. If you're familiar with proper analysis, you can find a more precise level.

Early next week, the market's oscillation here must choose a direction. One simplest reason: the 5-day moving average's kiss with the 10-day line is already brimming with spring desire. This directional choice will ultimately lead to a widening of the oscillation range — technically speaking, forming a larger-level oscillation.

The reason Shenzhen has been stronger than Shanghai recently is simply that Shenzhen Component Index's 1/2 line — corresponding to Shanghai's 1/2 line — is at 13,700, with still considerable room. So the subsequent movement involves just two choices: Shenzhen pulls Shanghai up, or vice versa. This divergence between the two markets cannot continue indefinitely.

Every day the market's movement is the best annotation of this ID's theory. Like Shanghai today at 05181326 — how do you identify it in the present moment? What method can precisely capture it? If you still can't figure it out, that proves you need to repeat the lessons. The answer is simple: a strength comparison between two segments of a hub oscillation — 05171430-05181000 versus 05181058-05181326 — using 1-minute MACD as auxiliary, then examining the latter segment's fine details using a method similar to nested intervals for precise positioning. Note: all of this can be done in the present moment, without needing after-the-fact explanation. If the above method is completely foreign to you or you can't figure it out at all, then spend the holiday continuing to study.

This ID has been rather bored lately. Taking a vacation is somewhat impossible — tonight and the next two days are fully booked. To cheer things up, here's a gossip tidbit: that old acquaintance who wrote an article on May 10 got married. The news should be announced today and should be all over the internet — from which you can gauge the weight of that person's articles. One last piece of gossip: this ID's "Guoan-forever-striving-for-first" stock — what rank is its year-to-date gain? How many leaders are ahead that need to be surpassed, so this ID has a target to work toward?

缠中说禅 2007/5/18 15:41:09
[Anonymous] 糊涂虫

2007-05-18 15:25:30
Teacher Chan, I have a very dumb question — you must answer it, otherwise I won't be able to eat or sleep.
The question is: on a 30-minute K-line chart, if there's a hub spanning 3 days or 8 days (24/64 K-lines) and another hub spanning 1 day or 3 hours (8/6 K-lines), are these two hubs of the same "level"? On any given timeframe's K-line chart, is the hub's level determined by how long it takes to form?
Thank you, teacher and fellow students.

--

Hubs are defined using a recursive method. You need to understand this clearly first. Otherwise, the hub you're talking about and the hub this ID is talking about aren't even the same thing — how could you possibly understand?

缠中说禅 2007/5/18 15:45:18
[Anonymous] 冠军杯

2007-05-18 15:32:48
Hi Chan MM, I've asked questions N times with no reply. Today I'd like to ask about 000800 and 000063. I'm stuck on 063. Thank you.

=
Both stocks have no major problems in the medium term. Being stuck is certainly because you chased high within the oscillation range. You can study the essentials of oscillation range operations.

缠中说禅 2007/5/18 15:47:39
[Anonymous] 墨香小老虎

2007-05-18 15:35:32
Two Tigers

2007-05-18 15:14:59
Today's operations were also quite frustrating!
Dumped 1/4 of 999, wanted to buy back but missed the opportunity.
Loaded up on 998 all day, but 998 was listless the entire day.
==

I just stayed put today and actually hit a new portfolio high.

Sigh. Frustrating. Still not good enough technically.

=

You should identify the reason for every mistake — don't let a single one slide. That's how you hone your precision. Otherwise, just look at the moving averages — that's simpler.

缠中说禅 2007/5/18 15:48:55
[Anonymous] 启程

2007-05-18 15:46:28
Blogger, I'd like to ask a question. 000911 had a suspension in mid-March, causing two limit-up days after resuming in early April. This left a big gap on the monthly chart. The price has been oscillating since. Must such a gap definitely be filled? Please advise!

Thanks~~

==
Who says gaps must definitely be filled? Breakaway gaps, for instance, don't get filled. Like in Shanghai, there's one still left from the 300-something level in 1994.

缠中说禅 2007/5/18 15:49:58
[Anonymous] Sina User

2007-05-18 15:22:15
Boss, when will Teaching You to Meditate 2 begin? Very interested.

=
Next week. The Analects and everything else will also resume normal schedule. Been busy lately, sorry for the neglect.

缠中说禅 2007/5/18 15:52:41
[Anonymous] nothing

2007-05-18 15:49:14
Boss, Old Kong mentioned your name in one of his articles.

=

A name is just a symbol, meant for people to talk about. If even that provokes a reaction, your composure still needs strengthening.

缠中说禅 2007/5/18 15:54:57
[Anonymous] christine

2007-05-18 15:52:13
Sister, in actual chart reading, sometimes you'll find that a moment can simultaneously be seen as a buy point at one level and a sell point at another level. How should you handle this situation where different levels produce different buy/sell points?

==

First of all, this situation is impossible. Of course, what can happen is that a large-level sell/buy point and a small-level buy/sell point are very close together. In that case, you obviously follow the large level to operate, unless you have sufficient experience and precision to confirm that the small-level operation has room to exit.

缠中说禅 2007/5/18 15:57:36
[Anonymous] Sina User

2007-05-18 15:54:23
Also, sister: from your lessons:

The prelude to the great bull market hasn't truly begun yet. 2007-05-10 15:56:10

Regarding the corresponding rate calculations, can they also be applied to individual stocks?

Thank you.

=

Yes, but the proportional relationships aren't necessarily the same. This ID will analyze individual stocks when there's time. Of course, it can only be old stocks with sufficient trading history.

缠中说禅 2007/5/18 16:01:07
[Anonymous] Night雨

2007-05-18 15:56:54
Beautiful sister, these past two days I keep selling the strongest stocks — reduced 600597, sold 600203 at the sell point yesterday. But stocks I bought are all still consolidating. Like 600203 — I sold it yesterday, and it's at this level today. How do I get a handle on this? Also, 600203's year-to-date gain is similar to 416. Between these two, anything you can gossip about?

--
If you're not proficient, you can set a bigger level. Don't rush to operate when even 1-minute hasn't shown divergence. You can even make a rule for yourself: adjustments that don't even break the 5-day moving average can be ignored. Also, selling is for buying back — especially for stocks with strong large-level uptrends. Otherwise, why sell if you're not going to buy back?

As for 203, it's not comparable to 416 — one is 300%+ and the other is already 500%+.

缠中说禅 2007/5/18 16:02:19
[Anonymous] YY

2007-05-18 15:59:21
Chán Zhōng Shuō Chán 2007-05-18 15:52:41
[Anonymous] nothing

2007-05-18 15:49:14
Boss, Old Kong mentioned your name in one of his articles.

=

A name is just a symbol, meant for people to talk about. If even that provokes a reaction, your composure still needs strengthening.

--------------
Boss, do you know what "talk about" means by mouth? Can't just say that casually.

=

Of course I know — that's exactly what TV and radio do every day.

缠中说禅 2007/5/18 16:04:45
[Anonymous] 钢铁大道

2007-05-18 15:58:35
Hello, Your Majesty. Reporting recent operations. Due to misinterpreting your meaning, I entered CITIC Guoan (000839) yesterday. Originally thought the large-level chart looked good, with only the 1-minute and 5-minute K-lines being unfavorable. Unexpectedly got stuck after entering. Plus, if an interest rate hike is announced today, should I desperately flee on Monday to avoid adjustment risk? Hoping for a reply.

==
Clearly contradictory thinking. Since you're bullish on the large level, you should think according to the large-level chart, not worry about small-level matters. If you can only tolerate small-level fluctuations, then operate at the small level. Don't mix up large and small levels.

缠中说禅 2007/5/18 16:07:24
Guo Er

2007-05-18 15:51:15
Today I judged the broad market correctly, but individual stock operations weren't ideal. Short-term differentials during the session only captured 2 cents — barely enough for commissions.
Plus watching the broad market while watching individual stocks, some stocks don't follow the market. Got completely dizzy!

==
Didn't this ID say earlier that during broad market oscillation, some individual stocks would surge significantly — like 416, 607? If you look at them through the lens of the broad market, you'll definitely have problems. View individual stocks based on their own movements. If an individual stock follows the broad market, it will naturally show buy/sell point structures consistent with the broad market. From this, you can readily judge the correlation between the broad market and individual stocks.

缠中说禅 2007/5/18 16:10:07
[Anonymous] 漂泊

2007-05-18 16:06:16
Hello, Master Chan. Following your theory, I entered 600166 — it hit the daily limit! But 600601 is getting harder and harder to understand. Please take a look. Thank you.

=
Short-term it's just hub oscillation around 11.8. Nothing hard to see.

缠中说禅 2007/5/18 16:12:51
[Anonymous] 大盘

2007-05-18 16:09:08
Please, blogger:

On the 1-minute chart, sometimes a 1-minute hub's three segments plus extensions exceed 6 segments (but less than 9). On the 5-minute chart, you can usually also see the three down-up-down or up-down-up segments. But by definition this should still be 1-minute level.

If you don't download 1-minute data daily, is there any way to determine the exact level from the three segments visible on the 5-minute chart? You know, downloading 1-minute data daily takes up a lot of space and is inconvenient.

==
For 5-minute movements to complete, their precise judgment definitely requires the 1-minute chart. Otherwise, the 5-minute doesn't necessarily show 5-minute divergence — if there's a small-level-to-large-level transition, you can't see it. If you only have 5-minute charts, you can only increase the operation level and treat 5-minute as the smallest level.

缠中说禅 2007/5/18 16:13:32
[Anonymous] 戈石

2007-05-18 16:11:39
Your Majesty:
I reckon some people's tails have been stepped on recently, so they come here barking hysterically every day. Their hysteria suggests they're about to expire.

==
Biodiversity must be maintained — otherwise it's not environmentally friendly.

缠中说禅 2007/5/18 16:16:38
[Anonymous] joyce

2007-05-18 16:09:40
Beautiful teacher:
At first I felt like I was starting to get it and was quite pleased with myself. But when I hit "hubs," I got stuck. Boo hoo. The examples in your articles are from too long ago — I can't see them. What should I do?

==

If you studied science, the recursive definition of hubs shouldn't be hard to understand. If you studied liberal arts or art and need visual aids to understand the definition, some fellow readers here have drawn diagrams of the hub definition — you can ask them for the URL. This ID had that address in one of my posts, but I can't remember which one now. If possible, try to find it.

缠中说禅 2007/5/18 16:19:07

Sorry, this ID needs to go to a street on the west side — quite far away. It's Friday too, so I must leave now. Still have two rounds of things tonight.

Will continue with the music session on Sunday. Heading out, see you later.

缠中说禅 2007/5/18 16:22:14
[Anonymous] 阿Q

2007-05-18 16:13:44
Haven't seen the blogger's Analects in a long time. I've been reading some Wang Yangming recently. Could the blogger give an evaluation of Wang Yangming?

=
It'll be back next week. Wang didn't even grasp the surface — he was just flailing around.

缠中说禅 2007/5/18 16:23:17

Sorry, this ID needs to go to a street on the west side — quite far away. It's Friday too, so I must leave now. Still have two rounds of things tonight.

Will continue with the music session on Sunday. Heading out, see you later.