Before answering this question, let us first understand the basis and methods of profitable trading. Take the naked K trading method as an example:

The origin and basis of naked K trading: When conducting transaction analysis, naked K traders believe that all technical analysis indicators are a retelling of the market price movement that has been formed. , rather than behavioral data predicted in advance.

In the school of naked K trading, traders believe that all good or bad information has already been consumed by people or institutions who have the ability to know in advance, and is reflected in the K lines that have been formed. The K-line that has been formed is the result, not the cause. The cause is unpredictable and unimportant.

The picture and text are from Zhihu user @ Josh Rager

However, those who make profits from bare K trading alone have a mature price action (Price Action) judgment system behind them. It is not a fixed method, it is logic, the nature of the market, and the game of human nature and emotional power behind price movements.

So naked K trading, in the trading field, relies on the K line itself as the analysis theory and the price action (Price Action) as the analysis basis to make trading decisions. A trading method that does not rely on any trading indicators.

When people are in a state of stress, the predictability of human decision-making and behavior is greatly improved, and they generally behave more desperately and with a greater sense of urgency. This is precisely the research essence of the price behavior behind naked K trading - supply and demand imbalance.

The imbalance between supply and demand does not necessarily mean that one side has more and the other has less, but an imbalance of desperation and urgency.

Just imagine, on the beach, the behavior, location, and walking route of tourists are basically unpredictable. But when a red alert suddenly sounds at sea, whether it's a tsunami or an incoming shark... their walking route becomes easy to predict. This is the theoretical basis of naked K trading price behavior analysis.

Those who can make profits from naked K trading are basically based on two points.

① Anti-weakness

② Anti-trap traders

In market trading, traders on the floor clearly know your entry position and stop loss position. Weak opponent orders (hold-up orders) are the fuel for price push, and their stop-loss orders or liquidation orders will become a strong force for the reverse movement of prices in a short period of time. Naked K traders take advantage of this to counter weak trades.

Find out the weakness, identify the trapped traders, enter the market against the weakness, let your orders become part of the order flow that triggers the trap, and let the trapped traders become the fuel for price push (long exit orders, It is the fuel for shorts, and the exit order for shorts is the fuel for longs), so that there is a high probability of profiting from it.

There is still a long way to go before we can fully understand and master the seemingly simple price action logic and apply it to actual trading. When you truly understand price action, master it through training, and then look at foreign exchange, A-shares, futures, or even digital currencies... any trading chart K-line, you will slowly find that you have a completely different experience than before. angle and field of view.

Retail investors are often reverse indicators of trend movements. This is why many people think that stocks fall when they buy them and rise when they sell them. I hope everyone can walk on the path closest to the nature of the market. Avoid your own orders becoming fuel.