The candlestick patterns, MACD golden cross, and wave theory that you are obsessed with are of little use to most retail investors today.
Why?
Because they were born in an era without computers 100 years ago, they are primitive strategies recognized manually by the human brain. Wall Street's supercomputers had already optimized these 20 years ago.
How can you win against a supercomputer with an abacus?
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But technical analysis isn't dead; the foundation still exists.
This foundation consists of two iron rules:
Iron Rule 1: Prices fluctuate around value
Value is the person, and price is the dog pulled by the person.
Dogs will run back and forth, sometimes rushing far ahead (bubbles), sometimes falling behind (undervalued). But the leash pulls them back, and they must ultimately return.
The yearly line is more like 'people', roughly representing the market's value consensus.
Iron rule 2: Prices are pendulum-like and excessive
When it rises, it always rises too much (greed)
When it falls, it always falls too much (panic)
The further the pendulum swings, the greater the return force.
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So technical analysis is not for prediction.
It is just a dashboard, telling you:
1️⃣ How far is the dog from the person (position)
2️⃣ Where does the pendulum swing (direction)
3️⃣ Is it at an extreme (emotion)
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You only need one weapon: trend + moving average.
☑️ Upward trend = moving average trending up = people are going uphill
☑️ Downward trend = moving average trending down = people are going downhill
☑️ Price far from moving average = excessive fluctuation, will return
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Key: The pendulum is nested.
The daily line is a small pendulum, the monthly line is a large pendulum, and the yearly line is an ultra-large pendulum.
Experience rule: The small pendulum usually follows the large pendulum.
The only mindset:Follow the big trend, go against the small trend.
Only buy stocks that are trending up on the monthly/yearly lines (large pendulum trending up)
Buy when the daily line pulls back near the monthly line (small pendulum swinging back)
This is in the inertia of the large pendulum trending up, catching the bottom of the small pendulum trending down.
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But the fatal limitation: Technical analysis cannot see the health of 'people'.
It cannot tell you:
1️⃣ Is the rise real performance or speculation?
2️⃣ Will there be a blow-up tomorrow?
Complete process:
1️⃣ Technical screening: Filter stocks with the monthly line trending up and the daily line pulling back
2️⃣ Fundamental research: Verify whether it is a real value increase or false prosperity
3️⃣ Forward judgment: How long can it last?
4️⃣ Trading decision: Buy when the daily line stabilizes after pulling back to the monthly line
Fundamentals tell you what to buy, technical analysis tells you when to buy.
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Delete these:
❌ K-line patterns (head and shoulders, morning star)
❌ MACD, KDJ, RSI
❌ Wave theory, Gann theory, and Chan theory
For most people, the cost-performance ratio is extremely low, easily wasting time.
You only need:
✅ Two iron rules (prices fluctuate around value in a pendulum-like manner)
✅ A tool (trend + moving average)
✅ A principle (tech follows fundamentals)
A heavy sword has no edge, great skill does not rely on craftsmanship.
It's that simple.
