The significance of market analysis is that, first of all, it provides some technical support for the directional choices we have to make. Secondly, it can give us an entry point, an ideal profit point, and a failure point for admitting defeat. No matter what method you use for market forecasting or guidance, as long as there are such three approximate points in your analysis results, you have made a correct market forecast. Before placing an order, you should pay attention to the following questions:
First: non-unitary thinking;
Second: position initiative;
Third: stop loss first.
Non-uniform thinking is to have more doubts about the choices you make, consider more possible other price trends, and be more humble in front of the market.
The picture above is an illustration of non-unitary thinking.
When traders see Figure 1, how will they place an order? Traders who counted the wave shapes found that wave 5 is over. If you see waves a and b below, you can enter the market to make adjustments to wave c. This is a successful transaction, no matter whether you exit the market with a profit or a stop loss, if I can see the shadow of such a transaction from your transaction records, it does not matter if the transaction performance is not good temporarily, success is only a matter of time. But others saw a good trend line and thought they should enter the market to go long, set a stop loss below the trend line, and after seeing the price rebound near the circle (Figure 3), go long by relying on the moving average. It was also a very successful transaction.
Doing more is also called success, and selling short is also called success. Are you irresponsible? No, this is the non-singular thinking I want to explain. Any possible market move is possible and it is good for trading to have an open mind about it. As long as you include the consideration of failure in your trading plan, you are trading with a non-single-minded mindset.
For example, in Figure 2, if the price hits a higher high than the high point of the 5th wave, it means that the 5th wave is not over yet, and there may be a sub-wave in the middle that is an extended wave. If it falls, it will fail, and stop loss is the best choice at this time. The same is true in Figure 3. If the stop loss in the figure is triggered, it means that the upward trend line has been broken, indicating that the originally drawn trend line has been broken, and there is a problem with the original analysis basis. At this time, stop loss is the best choice.
In the figure above, at the end point of the red line in Figure 1, different traders have different views on the trend, some are bullish and some are bearish, it doesn’t matter.
If you are bearish and plan to use 20 lots of orders to do this wave of short market, you can follow the plan in Figure 2. Of course, this is just a schematic diagram, and the actual price trend is more complicated. Bulls can make a trading plan according to Figure 3. If these ideas can be established in a short time after you see the red line price trend in Figure 1 and realized with instructions, you will start to enjoy the fun of trading.
Before placing an order, you need to find the support and pressure level first. Traditional trend strategy sharing is almost all subjective trading strategies based on support and resistance. Because there are too many subjective parts in it, it is more dependent on empirical judgment, so the learning process is difficult, and the winning rate and profit-loss ratio are not ideal.
The order flow tool mentioned in this article is a strategy of following large institutional funds, which is very different from common technical analysis.
Through the presentation of data, the order flow graph can intuitively see the amount of long-short funds, the strength of the difference between long-short funds, which price is the biggest competition, whether the long-short sentiment is out of balance, etc., so as to draw the conclusion of the current market sentiment. To put it simply, we can interpret the current main force's reaction to the market, and the agreement between the main force's performance and the trading system signal is our opportunity to achieve low risk and high accuracy.
Below, we use today's real case to analyze how to use order flow tools to assist transactions.
This strategy is only for learning and communication, and investors are personally responsible for the profit and loss of real trading transactions.