Tail market theory

The tail market theory is an excellent theory for short-term speculation. In the stock market and futures market, the most volatile time is nearly half an hour before the market closes. Major institutions and large investors like to make waves during this period. Sometimes it rises throughout the day, but turns into a "plunge" in the closing minutes; sometimes it falls throughout the day, but ends in a dramatic surge at the close. The tail market is the most important moment in a day, so the tail market theory is to speculate on the short-term trend of the market based on the laws of the market. Especially after the stock and futures markets abolished the "T+0" system, the practical significance of this theory has become more apparent.

The tail market theory is mainly based on the following reasons:

1. If good news suddenly comes to the futures market or stock market some time before the market closes one day, these good news will Stimulate purchase intention. But it is approaching the market close, and the buyer cannot buy much despite all his efforts. Once the market closes, he will have to wait until the market opens tomorrow before entering the market to buy again.

2. As soon as the market opens the next day, the unsatisfied buying desire at the end of yesterday's market will be reflected in an increase as soon as the market opens. Because everyone is afraid of being short, they couldn't buy it yesterday, so they want to buy some as soon as the market opens this morning. The short-term market is shrouded in good news and an optimistic atmosphere, so yesterday's late market sweeps often ended with a sweep of goods, and most of the current market opening will also open higher and continue to sweep goods.

3. On the contrary, if there is some bad news at the end of the day, so that people are panicked and everyone is scrambling, you will sell and I will sell, trampling on each other, but I will not "ring the bell" to close the market. If you can't sell, please come early tomorrow.

4. These fears will continue. When the market opens early the next morning, most of them will open low, and selling lenses will be seen as soon as the market opens. Everyone is afraid that if their positions cannot be sold, the price will fall more and more fiercely, so they strive to be the first, sell goods first, and sell at a relatively high price before others do, so as not to fall behind others and increase losses. That is to say, if there is bad news at the end of today's market, it is almost certain that the market will fall when it opens the next day. The tail market theory tells us that if there is news at the end of today's market, the effect will last until the morning of the next day. This is a very logical inference. The author has done some statistical research and found that this theory is also very accurate and is a desirable strategy for speculating in ultra-short-term stocks. If there is news at the end of today's market, theory dictates that action should be taken immediately to buy or sell futures or stocks. Take action at the end of the market today, such as buying when the good news is at the end of the market. Tomorrow, when the good news is still taking effect, take advantage of the high opening and close your position immediately to make a huge profit. Of course, things are not static. Good news at the end of the market has caused the market to surge. If it is confirmed to be a "rumor" after the market closes, the stock market may be completely different tomorrow. But as long as you persevere and apply the tail market theory for a long time, your chances of winning are certain.

But finally, I would like to say to all readers, don’t be too greedy. If you bought goods when the market rose at the end of yesterday and opened higher today, according to theory, you will take profits immediately. Don't hope that the market will continue to rise, because bad news may flow into the market by the end of today. Apply this theory only to the overnight market. No matter whether you make a profit or a loss, you must close your position. Otherwise, if you make a mistake and refuse to admit it, your mistake may become deeper and deeper. If you don't make a profit, you will suffer a loss, and the more you lose, the more disappointed you will be. Or when you have money to make and hope to make more, the market situation suddenly changes, and what was originally a profit turns into a loss, which is a waste of opportunity and time. If you want to do some medium and long-term trading, you should refer to other theories.