Why do I always say that only looking at technical analysis is garbage｜Interpretation (Explaining K-line technical analysis in one go, saving you ten years of detours)

The share by Brain on Youtube about K-lines is fantastic and explains it more thoroughly, recommended to everyone, video link at the end:

I quite agree with the core thinking of his share:

In simple terms: everyone should not treat technical analysis as a 'secret to predicting the future', predictions are just trickery, those things are no different from metaphysics,

In the era of computers/quantitative analysis and now the AI era, flashy indicators and patterns are prehistoric products, mostly penetrated by arbitrage;

Does technical analysis have no value then?

Not really, it still has its value, which is what he said: 'Positioning/Tracking/Risk Control', and it must obey the fundamentals.

First, dismantle the 'sorcery'.

He believes that the things most retail investors are obsessed with—candlestick patterns (Morning Star, Head and Shoulders), indicators (MACD/KDJ/RSI), and the more esoteric wave theory/Gann theory/Chandian theory—are essentially:

The 'manual quantification' of the pre-computer era.

You use your eyes + simple formulas to find 'repeatable patterns', but today Wall Street/quant funds use supercomputers to backtest millions of patterns to the extreme. If a certain pattern is truly stable and profitable, it has long been cleaned out by algorithms.

Thus, he concludes: what you learn and can publicly teach is often 'already invalidated'.

So does technical analysis still have any use?

It’s not that candlestick moving averages are completely useless, but rather repositioning technical analysis as: not a predictive tool, but a 'dashboard'.

He proposed two 'axioms' (underlying worldview):

Axiom 1: Price fluctuates around value (people control dogs).
Value = people, Price = dogs.
Dogs may run around (overvalued/undervalued), but they are tethered (value laws), ultimately returning near people.
How does this reflect on the chart? He uses long-term moving averages (such as annual lines/250-day moving averages) ≈ value center.

Axiom 2: Price experiences pendulum-like 'over fluctuations'.
Price does not move exactly along value, but will swing due to greed/fear/herd effects; the greater the deviation, the stronger the regression force (the more 'tightened').

Combined, the two:
The significance of technical analysis is not to predict rises and falls, but to measure 'deviation and emotion'.

Technical analysis 'only answers 3 questions'.

A very practical framework: technical analysis only does three things—

Position: How far is the price from the 'value center/moving average'? (degree of deviation)
Direction: Is the current trend upwards/downwards/sideways? (trend)
Emotion: Is it at an extreme? (overbought/oversold)

'What is the 'Mystical Iron Sword Technique'? (core method)

Delete all complex indicators, leaving only one sentence: trend + moving average;
And match it with the most important principle: follow the big trend, counter the small trend;

Big trend: monthly/annual trend (long cycle determines direction);
Small trend: daily/weekly fluctuations (short cycle is noise + emotion).

In terms of operation:
Only do / focus on targets that have a long-term trend upwards;
When there is a short-term pullback (small pendulum down) close to long-term support points (moving average/value center), enter in batches;

Do not chase daily emotional peaks.

Also, in a sideways trend (repeatedly crossing moving averages, not making new highs or lows), try not to trade.

'Complete Investment Process'

Clarify the division between 'skills' and 'internal skills':
Technical selection: use trends/moving averages to quickly filter candidates from thousands of stocks that have 'monthly upward + daily pullback' (telescope);
Fundamental research: clarify why moving averages are rising, whether it's genuine improvement in performance/industry or speculation (microscope);

Forward judgment: how long can this round of value improvement last? Valuation ceiling/cycle stage?

Trading decision: the fundamentals tell you what to buy, technical analysis tells you when to buy;

Only technical: may buy cheaply but buy wrong (step on a landmine).
Only fundamentals: may buy right but buy expensively (chasing at the top).
Combination: buy the right thing at the right time.

How can you 'simply take and use' (one-sentence version)?

1) First, check if the monthly/annual line is upward (only do big trends that are upward);
2) Then wait for the daily line to pull back close to key moving averages/support points, and buy when it stabilizes (don’t rush the first knife).
3) If the fundamentals cannot clearly explain 'why people are moving forward', then don’t place bets just because the chart looks good.

For example, the current $BTC price:

According to his theoretical system:

BTC is in a 'mid-cycle pullback/clearing period within a long-term uptrend': the big trend (monthly value center) is still rising, the small trend (weekly) is still weak, the price is above the long-term support point but has not yet recovered the mid-term moving average;

If you are more long-term (>6–12 months) under his framework, you can consider 'tentative positions/batch layouts';

If you are more short-term (a few weeks to a few months), his framework now resembles 'observation period/waiting for confirmation'. At this time, you should not act until the weekly line at least stabilizes above EMA9 (≈92.9k) (indicating the small pendulum begins to pull back). A stronger confirmation is: returning to the mid-term moving average area around 99–100k (indicating mid-term trend restoration).