Gann's theoretical basis
According to Gann's theory, there are universal natural laws in stock and futures markets, and the price trend of the market is not chaotic, but can be predicted by mathematical methods. Its essence is to establish a strict trading order in a seemingly disorderly market, which can be used to find out when the price will be adjusted back and to what price.
Capital loss coefficient
Factor one
1, excessive trading on limited capital. That is to say, the operation is too frequent, and the short-term and ultra-short-term in the market require high operating skills. Before investors have mastered these operating skills, too much emphasis on short-term will often lead to no small loss.
Factor 2
2. Investors did not set a stop loss point to control losses. Many investors have suffered huge losses because they have not set a suitable stop loss point. The result is that their mistakes are allowed to develop indefinitely and their losses are getting bigger and bigger. Therefore, learning to set a stop-loss point to control risks is one of the basic skills that investors must learn. There are also some investors, even some market veterans, who have set a stop loss point, but they have not resolutely implemented it in actual operation, resulting in huge losses due to ideological differences.
Factor three
Lack of market knowledge is the most important reason for losses in market transactions. Some investors do not pay attention to learning market knowledge, but take it for granted or subjectively imagine the market, and can't tell the truth from the false. As a result, he was misled by mistakes and suffered huge losses. There are also some investors who just use the knowledge they have learned from some books to guide practice and apply it indiscriminately, resulting in huge losses. Gann emphasized market knowledge and practical experience. And this kind of market knowledge often takes a long time to really understand in the market.
Gann's theory has the following points:
(1) As long as you follow the fixed trading rules, you will definitely make a profit. But there are five prerequisites for profit, namely: knowledge, patience, courage, health and capital. (Knowledge is what retail investors in China lack most now)
(2) Be good at summarizing your own trading behavior. After trading every day, we should sum up our own gains and losses into lessons, so that we can constantly revise and improve ourselves, stay innovative and cautious, and keep a clear head in the market. Without a knowledge base, only by summing up on this basis can you have a faster understanding and systematization of actual combat experience, which is one-dimensional learning and hard training. ).
(3) Pay attention to chart analysis.
In the stock market, the change of stock price often presents a trend change, the essence of which is to grasp its trend change, so our judgment of stock price is often influenced by the trend change, so another rule in the trading law is to trade according to the trend change.
Gann believes that the reversal of the stock market trend often happens before and after the festival. Before the trend is reversed, it can be tracked in history and time period. This method may be difficult, and investors can choose and use it reasonably according to their actual needs and interests. Let's take a look at its specific content.
No matter from the K-line or the stock price form, Gann suggested paying attention to the following two points.
(1) When the market is in a bull market, you can refer to Gann's nine-point chart and three-day chart. If the 9 o'clock chart or the 3-day chart falls below the previous low, it represents the first signal that the market trend will reverse.
(2) In a bear market, when the market is in a downward trend, if the 9 o'clock chart or the 3-day chart breaks through the previous high point, it means that the probability of the market trend bottoming out is very high.
From the time point of view, investors need to pay attention to these time points.
(1) When the market is on holiday, usually around the holiday, the trend of the market wants to reverse.
(2) On the anniversary day, investors need to pay attention to the days after the anniversary of 1, 2, 3, 4 or 5 is at the important top and bottom of the market. Usually, the market will turn around these days.
(3) During the running time of the stock market trend, investors need to carefully observe and pay attention to the market to see if it is near any extreme high price or extreme low price that is separated by 1, 2, 3, 4 or 5 years. In addition, we should also observe the past trend and see whether the time span between the market and any daily limit and lowest price is 15, 22, 34, 42, 48 or 49 months, because these are all important time periods for observing the trend changes, and it is also convenient for investors to make timely investment adjustments.
The above are some introductions of Gann's stock operation theory, hoping to help everyone. Many mysteries are one of the tools to predict the future trend of the investment market, which are applied in many aspects of Hong Kong stocks, Shenzhen stocks and Shanghai stocks.