Why do you lose more when you rely more on K-line technical analysis📈?
"Severely oversold range", "lack of downward momentum", "clearly entering a downward channel", "head and shoulders top formation", "long sideways will inevitably fall" are all traps that novices who have just started trading can easily fall into
First, let's take a real-world example:
In a period of market in 2023, BTC's daily amplitude was less than 5% for a week in a row
Due to long-term sideways trading, volatility has decreased, and BTC's Bollinger channel looks extremely "healthy" and "safe" (as described in Space and historical tweets)
A top family office in Hong Kong decided to sell the BTC it had allocated 3 years ago due to fund allocation needs
On the last day of this week, In the morning, the price of BTC finally rose by 5% like a snail. At this time, the asset manager of the family office thought it was time to sell, after all, it was the highest price of the week. So he held a short meeting and asked the staff to sell 10,000 BTC. Unfortunately, because the disposal staff was not very experienced, they directly put all 10,000 BTC on a certain CEX as market price sell orders. In an instant, the active arbitrage robots on this exchange quickly split the orders and moved them to the world, smashing the market opening, and a big negative line directly. May I ask: Just by looking at the K-line, how do you know that a giant whale will come out to smash the market that day? The indicators displayed on the market are all historical data and have become static facts. Just by looking at the static information, can you guess the dynamic possibility of what is going to happen? In this global large-scale game, how can you know that a certain corner of the world, an institution or a certain individual suddenly has the intention to buy and sell? Individuals with larger capital can have an extreme impact on the market in a very short period of time
Summary:
1. Do not rely solely on K-line technical analysis, such as the so-called "naked K tactics", these are all witchcraft🧙
2. Do not say that "dog dealers smash the market" as soon as the market plummets, most of the time you are wrongly accusing the dealer
3. Many sudden surges and plunges are caused by makeshift teams
4. When analyzing the overall market, it is necessary to "delete noise" for these rises and falls to prevent interference with our analysis of the market-making range
5. In a very short period of time, the market behavior of a very small number of individuals can only make you fall into the positive feedback trap of dopamine when trading
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