Teaching You to Trade Stocks 103: Learn Anti-Wolf Defense Before Learning Dragon-Slaying Arts

2008/3/19 15:58:15

It seems some people think this ID's course is too slow. And the world is full of exactly this type of person — over 100 lessons, and they probably haven't truly understood a single one, yet they complain the course is too slow? If you had truly understood any one of them, you wouldn't be getting your face rubbed in the dirt in actual trading.

Learn anti-wolf defense before learning dragon-slaying arts. From what this ID can see, the vast majority of you haven't even passed the wolf-defense level. The moment the market shows a little vigor, you get thoroughly violated by it.

Before you've completely mastered the anti-wolf defense described below, don't bother studying hubs, levels, or any of that. Because with this wolf defense, at least you won't get seriously violated by the market, and you won't be wailing like ghosts and howling like wolves when the market crashes hard.

This anti-wolf defense has actually been mentioned in the lessons above. Here it is, summarized comprehensively one more time. Pay attention.

With just the simplest MACD indicator, the zero axis divides bull and bear dominance. That is to say, once the MACD indicator falls below the zero axis, then on the corresponding timeframe chart, bear forces take dominance — and you must stay far away.

Everyone, please go look at the market's 60-minute chart yourselves. After MACD broke below the zero axis at 5200 points and confirmed with a pullback, all the way down to the current 3000-something points, it's been hovering below the zero axis the whole time. The devastating damage during this period — haven't you experienced it yourselves?

Avoid all markets or stocks where the MACD's yellow and white lines are below the zero axis — this is the most basic anti-wolf defense.

Of course, this involves time cycles. For example, on a 1-minute chart, it frequently crosses above and below the zero axis. Here, you can determine a minimum time cycle based on your own ability — for example, the 60-minute chart or the 30-minute chart. Once the MACD falls below zero on your chosen minimum timeframe, completely exit the market and don't return until it firmly stands above the zero axis again.

Of course, if your skills are more advanced, you can absolutely enter during divergence situations — that's the highest level. But we can't set requirements that high here. Everything must be idiot-proofed. If you can't even tell whether the MACD yellow and white lines are below the zero axis, then leave this market entirely. Earth is too dangerous — go back to Mars.