Market price behavior is all-encompassing, prices evolve in a trend way, and history will repeat itself, which constitutes the theoretical basis of technical analysis. When we are caught in the maze of technical analysis, it is the best choice to return to the original. Going back to these three initial foundations (assumptions) is a new understanding and rethinking of technical analysis. After all, the reliability of a building should be the most trustworthy, or the most worthy of scrutiny. In the fundamental thinking of the three hypotheses of technical analysis, thinking will get new materials with the extension of memory, ignoring many superficial indicators or unreliable morphological skills, and more sticking to the original primitive. In the process of thinking, whether we can correctly understand the three primitive foundations is a necessary condition for technical analysis to produce correct conclusions. Three hypotheses constitute a solid foundation of technical analysis theory. If you are willing to understand technical analysis, you must first admit this foundation, and when you look back at this foundation after a little deviation in application, technical analysis may blur this foundation, and using a foundation does not conform to the explanation of specific examples. However, if it can't summarize the characteristics of the market, can it be the basis for analyzing market tools? This is a paradox. When there is an opposing debate in thinking, the supporting thinking of technical analysis holds that the defense that can be discussed only by acknowledging the theoretical basis is a powerful counterattack against the opposing debate. After all, this foundation is too primitive, and any market analysis theory may be falsified. What's more, these three original theoretical foundations bear the expectations of too many people. Even in the face of its failure, its performance in action is far from psychological regret. Thinking is not to stay on the basic issues for too long. In the thinking of the foundation, what comes from this is the speculation of tradition and primitive. In practical application, the ineffectiveness of the market will lead to price intolerance, and the formation of the trend is the fluctuation trend of the psychological endurance of specific varieties. In fact, there will not be a trend and a trend in the operation, and the trend will not be transformed into reality because of factors such as system, structure and psychology. It is still an obvious question to what extent and in what form history will repeat itself. Facing the primitive foundation, understanding and applying technical analysis with the current market viewpoint is a kind of compensation for the timeliness of technical analysis, and the resulting change of market viewpoint and more macro and comprehensive view and grasp of the market are self-evident for understanding market thinking, and the original understanding of technical analysis foundation also needs more macro thinking as a strong support to get greater development. 1 Market behavior contains and digests all information. "Market behavior contains and digests everything" constitutes the basis of technical analysis. Unless you have fully understood and accepted this premise, it is meaningless to learn technical analysis. Technical analysts believe that any factor that can affect the futures price of a commodity-fundamental, political, psychological or any other aspect-is actually reflected in its price. Therefore, what we must do is to study the price changes. This sentence may be too arbitrary at first glance, but it does take time to deliberate. The essence of this premise is that price changes must reflect the relationship between supply and demand, and if supply exceeds demand, prices will inevitably rise; If the supply exceeds the demand, the price will inevitably fall. The law of supply and demand is the starting point of all economic forecasting methods. Turn it upside down, then, as long as the price rises, no matter what the specific reasons are, the demand will definitely exceed the supply, which is optimistic from the economic basis; If the price falls, it will definitely be bearish on the economic basis. In the final analysis, technical analysts only study fundamentals indirectly through price changes. Most technical experts will also agree that it is the relationship between supply and demand of a commodity, that is, the fundamentals determine whether the commodity is bullish or bearish. The chart itself can not lead to the ups and downs of the market, but simply shows the optimistic or pessimistic mentality popular in the market. Charts usually ignore the causes of price fluctuations. In the early days of price trends or when the market is at a critical turning point, no one often knows exactly why the market behaves so strangely. It is at this critical moment that technical analysts can often find their own way and hit the nail on the head. Therefore, with your more and more rich market experience, the more you encounter this situation, the more you can't resist the saying that "market behavior is inclusive and digests everything". Naturally, since all the factors that affect the market price will eventually be reflected through the market price, it is enough to study the price. In fact, chart analysts only let the market reveal its most likely trend by studying price charts and a large number of auxiliary technical indicators, instead of analysts "conquering" the market with their own shrewdness. All technical tools discussed in the future are only auxiliary means of market analysis. Technical experts certainly know that there must be reasons for market fluctuations, but they think that these factors have nothing to do with analysis and prediction. In addition, market behavior is all-encompassing. On the one hand, it shows that the change of market price reflects the change of external information. On the other hand, whether the change of external information is fully or excessively reflected in the price change also needs to be considered. When one or more bullish information is known by the market, the price may have gone up for some time, so we need to understand and analyze whether such bullish information is completely digested by the price increase, undigested (that is, we can continue to push up the price), or overdrawn (that is, if the price goes up more, it will fall back in the opposite direction, that is, the bullish will get worse in the usual sense). 2 The market operation evolves in a trend way. The concept of "trend" is the core of technical analysis. The whole significance of studying price chart is to reveal its trend in time and accurately at the initial stage of a trend development, so as to achieve the purpose of trading along the trend. In fact, technical analysis is essentially following the trend, that is, judging and following the established trend. It can be naturally inferred from "the price evolves in a trend way" that for a given trend, the next step is often to continue to evolve in the direction of the existing trend, and the possibility of turning around and reversing is much less. This is of course the application of Newton's law of inertia. In other words: the current trend will continue until it turns around and reverses. Although this sentence is almost repeated in the same language, what I want to emphasize here is: unswervingly follow an established trend until there are signs to the contrary. At the moment when the trend will change, we may still be forecasting prices in the original trend way, which is why we won in the previous bull market and failed in the subsequent bear market! This reminds us that when studying and analyzing price changes, we can't predict the market outlook with subjective "more (less)", otherwise the analysis will lose objectivity and fall into idealism. History will repeat itself. Technical analysis and market behavior are inextricably linked with human psychology. For example, the price pattern is expressed by some specific price charts, which show people's optimism or pessimism about a certain market. In fact, these figures have been widely known and classified in the past few hundred years. Since they have been effective in the past, we might as well think that they will be equally effective in the future, because they are based on human psychology, and human psychology has always been "a leopard cannot change its spots". "History will repeat itself" means that the key to the future is hidden in history, or that the future is a copy of the past. History will repeat itself, but in different ways! There are no two identical leaves in reality. Investors often seek the "truth" of investment in similar historical changes, but in the end they are scarred, which also shows that the market is ever-changing. The two K-lines, Yin and Yang, can construct the ups and downs of Wall Street in the past century. Just because K-lines are similar but not similar, history repeats itself without repeating itself. In the financial investment market, technical analysis methods are used for research and analysis, just like fundamental analysis. Only on the basis of correct understanding can we further apply the basis of technical analysis and make correct analysis conclusions. And a good investment decision needs a correct analysis method. Therefore, when we conduct technical analysis, we need to correctly understand the three assumptions of technical analysis.