Aggregate price movements
In the nostalgic Showa era, at home there was a husband who used only a few nouns.
To his wife, he would simply say nouns like "meals," "bath," "newspaper," and "tea," and when he wanted to watch the news he would just say "hey" and point his chin at the TV.
It was the ultimate form of communication that was the most efficient across police, fire, aviation—and in any field of wireless communication, nothing wasted!
In modern times, where courteous behavior is often demanded, people might say it looks “cool.” If you want to test that possibility, please do so at your own risk.
In the Zhonggensen (Jungensent) line trading method, we use daily charts to observe several months of movement.
But not the most commonly used candlesticks in Japan; it is a “line chart” that only connects daily closing prices with lines.
By the way, because candlesticks are common, there is a perception that “daily price equal to daily candlestick,” but that is not the case. “Day” indicates the period, and “stick” simply means chart. There are various types of daily charts as well.
Regarding the closing-price line chart, you might wonder: is it only closing prices? Is there not enough to judge by shapes… etc., many will have questions, but there is meaning in what is stripped away.
For example, the drawbacks of modern network society are confusion caused by “information overload.”
Having a lot of information isn’t bad, but when there are too many choices, people get lost, cannot act, cannot decide, and end up in a thinking stop.
Think back to the U.S. presidential election before and after the event.
People thought Clinton would win, Trump would bring a shock decline if he won... but after Trump’s win, the market brightened as if after rain.
This time, expressions like “Trump market” emerged, and many investors are anxious about whether the Trump market will continue, collecting information and slowing their decisiveness.
The same is true in daily work and housework.
Even while embracing a lot of information, we decide our actions by narrowing down options. In fact, we often discard many options with fairly simple criteria because we cannot spend an hour to decide a day's work schedule or two hours shopping for dinner.
Gathering材料 to anticipate the future… this is the common image many have of stock investing.
But investing is not about making up your mind and waiting months for a result. It’s okay to overturn today’s decision tomorrow. Whether you do it all at once or gradually, everything is free.
Therefore, rather than focusing on daily ups and downs, you should relax and look at the overall trend of stock prices in a rough sense.
At the very least, you should stop thinking about a future you can never know.
In candlestick charts, we observe a “line arrangement” formed by two or three adjacent candles.
There is a certain probability backed by statistics, and it leads to identifying the trend changes, which is our greatest concern. But in the end, we cannot completely avoid being right or wrong.
Using candlesticks, which have a lot of information in a single line, often leads to looking only at short-term movement and discarding truly necessary information.
Information should not be gathered, but selected and discarded to fit your own style of action.
Please take a look at the effectiveness of the closing-price line chart, which professionals favor.
The following are quotes from a book on Zhonggensen.
To aggregate price movement, record only one value per day (a single value). That value uses the final price of the day. Then, draw that daily value as a point on graph paper and connect the points with a line.
(From “New Edition Zhonggensen Construction Trading Method” Part II, main text)
There is no verbose explanation.
The expression “to aggregate” reveals the pragmatist’s commitment.
