If love and hate, life and death are the eternal themes of literary novels, then ups and downs, profits and losses are the constant melody of futures trading. There is no rising market that only rises but does not fall, and there is no falling market that only falls but does not fall. Up-and-down swap and bull-bear alternation are the basic forms of futures market operation. Therefore, to analyze the trend, we must proceed from a dynamic, changing and developing standpoint, not from a static, unchanging and stagnant point of view.

As the saying goes, "extremes meet, and people make mistakes." When an upward trend is very strong, we should pay attention to the hidden downward trend, pay attention to negative factors, and be careful to prevent the trend from turning; When the downward trend is very sharp, we should pay attention to the hidden upward trend, pay attention to bullish news, and be wary of turning to the market. Sooner or later, when you turn sharply, you will be thrown out of the car and break your head.

Because, the long contracts in hand, no matter how aggressive the bull market is, are pure floating profits if they are not settled and sold for one day; The higher the bull market rushes, the greater the temptation for investors to settle and sell foreign exchange, and the selling pressure of closing positions sooner or later will make the market situation plummet. On the contrary, the short contract in hand, no matter how the bear market plummets and is not settled for one day, is the money on the book; The worse the bear market falls, the more attractive it will be for investors to buy, and the buying gas that will eventually cover the position will make the trend stop falling and pick up. This profitable technology business is inevitable. Article 58: extremes meet.

Moreover, an excessive bull market will also make people who have not entered the market and those who have closed their positions have the idea that "it has risen so much and should be close to the top". Taking advantage of high admission and shorting will undoubtedly make the selling pressure even greater; Excessive bear market will also make people who have been watching and arbitrage grow the idea that "it should be almost over after falling so much", and taking advantage of low admission to do more is naturally adding fuel to the fire. This power of seeing the new single entry of "head" and "bottom" cannot be ignored.

When the above two forces are combined, the reversal of the big market usually shows the following signals: in the climax of the bull market, the rising wave hit a new high with a large volume, and then fell sharply, pulling out the long black and closing at a price lower than the closing price of the previous day; Or at the low tide of the bear market, create a new low of falling waves with huge trading volume, and then draw back a big rise and pull out a long red, closing at a price higher than the closing price of the previous day. Recognizing these turning signals, we can see the wind turn the rudder in time, adjust our investment strategy, follow the market and improve our chances of winning.

The philosophy of the universe is embodied in "the extremes of things must be reversed, but the extremes of things must be reversed." I once compared futures trading to a "school" for learning. It seems that this "school" also includes philosophy courses, so it's really good to switch to research, isn't it?