The philosophy of Naka Source Line
In the blog on June 9th (Thursday), I introduced the idea of “restricting deployment.”
It is a very important way of thinking.
But, we cannot avoid the accuracy or inaccuracy of predictions.
“We can’t even predict tomorrow’s price accurately,” “then abandon market intuitionthe Zhongyuan lineand follow its signals” is the standard form when using the Zhongyuan line, at least for the unaccustomed (a practice-buy with limited quantities).
Even so, saying again, “we will predict the turning of the Zhongyuan line” … that’s contradictory, isn’t it?
The opportunities are relatively limited, but since we have no way to know whether now is the time or not, we should first step in, and control the results (profit/loss) with what comes after—that is, in a sense, an easy-to-implement ‘correct answer’.
Therefore, I showed it as the “standard form.”
There are many moments you may not be convinced, but by dividing Zhongyuan line into three parts and by the persistence when you can ride a move, you can achieve small losses and large profits—that’s how I think, and I intend to execute mechanical trading strictly as prescribed.
Accept that you will be right only about half the time—that is, “half will miss” and there will be stubborn losing streaks—and move forward by giving up poor alterations.
Non-discretionary trading that follows the Zhongyuan line’s judgments, i.e., “mechanical trading,” is as follows:
・Make mechanical judgments to ride the months-long fluctuations and swells.
・The timing of deployment is the so-called “breakout.”
・Aim for both up and down moves and switch positions accordingly.
・On a closing price line chart, simply try to capture the stock’s “flow.”
・Don’t chase predictions aggressively; rather, keep a “loose” feel.
・Instead, actively perform “three-part position management” to adapt to price fluctuations.
Now, contrary to our hopes, stock prices show a variety of unpredictable movements.
While working to close the gap between expectations and reality, you must also pay attention to the target of your expectations, the “settings.”
Liny Investment Research Institute’s“ Zhongyuan Line Signal Delivery”not only avoids explanations that generate excessive expectations but also emphasizes safe settings that you can actually use yourself.
Even with the same trading logic (rules), performance varies depending on the settings.
The top of the figure’s “safety” is
“There is no outstanding profit, but there is no large loss either”.
This is the setting.
The Zhongyuan Line Signal Delivery focuses on this “safe” setting.
In contrast, the bottom’s “anxiety” is
“highly volatile”
and aggressive setting.
There are periods of sharp profit, but also periods of severe loss, which means that if you actually take positions toward an unknown future, you may experience “intense fluctuations.”
Among these, those who highlight only the “floating” periods when they raked in profits as “results” are surprisingly common.
Be careful not to be deluded by the magic number of “win rate.”
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