“This is a column published on Toyo Keizai ONLINE.” This is the easiest way to identify price movements.
Good morning, this is Matsushita.
Today I will introduce the simplest method for identifying price movements.
What is the method for identifying price movements?
It is a method to determine whether the price is currently rising or falling.
Is the price going up now,
or is it going down?
You might think, "That’s obviously easy."
If that were true, more of you would be
making larger profits,
and minimizing losses would be easier.
In a falling market, leaving a position that’s frozen at a loss as is.
In a rising market, leaving a short position that’s already sold as is.
This is why you are sustaining losses, right?
In the end, this is because you do not clearly understand whether the price is rising or falling.
Now, here is the “most simple method for identifying price movements.”
That is,
If the previous high is broken to the upside, the price is rising.
If the previous low is broken to the downside, the price is falling.
That’s all there is to it.
Let’s look at the Nikkei Stock Average!
There was a sharp drop due to the chaos of the U.S. presidential election,
but it did not break the previous lows at August 4, July 8, or June 24 lows.
On the other hand, the high on November 1 was broken upward on November 11.
The high on February 1 was broken upward on November 18.
In other words, the previous lows were not broken downward,
and the previous highs were broken upward, so
the Nikkei Average is rising.
In a rising price movement,
profit on long positions expands,
loss on short positions expands.
These facts can be observed daily, moment by moment.
Having written this much,
you might think, "But you can’t predict what will happen next, can you?"
You might hear such a question, but
Investment is not about predicting price movements,
it is about confirming the movement of the price in front of you, and
acting accordingly.
1. It’s okay to hold a long position if the price is rising.
(Because profits are increasing.)
2. If the price is rising, what should you do about holding a short position…?
(Because losses are increasing. If you’ve predetermined a stop-loss point, you should exit there.)
The two judgments above are not based on predictions.
We are trying to easily identify movements and choose our actions.
Investing can be won in theory.
However, without knowing the underlying theory,
this cannot be established.
You must look for winning ideas elsewhere.
Continuing to trade with no winning ideas is a waste of time and money, so it is strictly prohibited.
The simplest method for identifying price movements that I wrote today is also a very basic theory.
If you study it, you will find many theories to win.
As you accumulate them, you will increase your profits, so study one by one.
If you are serious about learning the theory,
Mako Investment School Online FX Investment Skills Training Course
Please join us.
I will teach you the theory to win!
