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Many people enjoy predicting market trends in advance.

From a practical standpoint, if one does not make predictions in advance and simply follows the market's fluctuations for trading, it is definitely not profitable.

Following implies being a step behind, and being a step behind often leads to missing opportunities or making incorrect judgments.

Thus, "not judging, just following" has become a useless platitude.

The core of the issue lies in what is being followed and what is predicted in advance.

The standard answer is actually quite simple.

Utilize a trading system to emit signals, and what is followed are the signals, without subjectively judging the direction of the market trend.

The root of all problems is not the inability to make predictions in advance, but what the criteria for judgment really are.

Many friends have left me messages, saying that I have been too conservative recently, always saying that the market needs to adjust.

Most people now believe that the market will fluctuate upwards, and some even claim that the 3000-point level is unbreakable.Whether optimistic or pessimistic, these attitudes alone cannot constitute the standard for stock analysis.

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If our market is a market strictly governed by policies, then the essence of making money would be fundamental research, looking for the patterns of policy deployment.

However, the reality is that our market is not entirely a policy market.

For example, in 2023, a lot of policies were introduced, but the market still fell as it was supposed to.

It's just that many people have forgotten this history, thinking that there has been an essential change between the present and the past.

The law of the market lies in the change of chips, not in the introduction of policies.

No matter how many policies are introduced, if no new funds are brought in, the law of chips, or the structure of chips will not undergo fundamental changes, and the technical aspect will always be superior to the fundamental aspect.

Therefore, the core of most trading systems is not to follow policies like a weathercock.

Instead, it is to follow the changes in the market trend and volume, to analyze the law of chips, and to find the corresponding signals.

Policies or unexpected events are essentially just uncertain factors, and they cannot fundamentally change the direction of the market.What truly determines the direction of the market is not any policy, but the laws of capital operation.

Therefore, what decides success or failure is not subjective judgment, nor the so-called logic, but a good trading system and execution ability.

Most people do not understand what is meant by a trading system.

A trading system is, in fact, a set of standards that tells you how to select stocks, when to buy, and when to sell.

Your trades are all completed under the guidance of the system.

There is not too much subjective judgment, nor is there analysis and research on randomness.

The market will have many unexpected events that may change the direction of 1-2 trading days, but it is difficult to change the trend of a period.

It is still because of the issue of chips, unexpected events cannot make the chips undergo a qualitative change in a short period of time.

The core of the trading system is to analyze the market's chip situation, find the direction of the main force, and predict the probability of future rises and falls.The so-called signals refer to the volume-price relationship on the market surface, which emit standard signals.

Now let's talk about some core aspects.

Firstly, signals are inherent, but standards are self-defined.

Many people have been asking what the standards actually are.

In fact, everything can serve as a reference standard, depending on which indicator you want to use.

For example, a simple candlestick system where the price breaks a new high is a standard.

For example, a simple moving average system, where the price breaks through the moving average or retests the moving average, is a standard.

For example, a divergence system, where the divergence value is particularly large, indicating overbought or oversold conditions, is also a standard.

Various technical indicators can serve as standards, depending on which standard you find more practical and suitable for yourself.

Indicators are static, but people are dynamic; how to use the indicators is the core.Most signals are essentially a reflection of an indicator, and at their core, they are the results derived from a trading model based on big data.

As for how to use this model and how to set the standards, one needs to explore it on their own; it certainly isn't something that can be resolved simply by looking at golden crosses or death crosses.

Secondly, execute according to the signals, even if you find that the results are wrong.

Many retail investors are not ignorant of indicators, but they do not look at them when trading; they act completely on a whim.

If you do not trade according to the signals given by the indicators, then these signals lose their inherent value.

Although it is impossible for all signals to be correct, many signals are close to being accurate.

Moreover, if you do not execute the signals and do not follow them, how can you judge whether these signals are right or wrong?

Stocks are a matter of probability, looking for games with high probability, and signals are what remind you when this high probability has occurred.

Occasionally, a wrong result does not mean that the signal is invalid; it only means that the accuracy of the signal is not high enough.

Furthermore, only by verifying the correctness of the signals can you determine whether the signal is effective.So, don't get caught up in the details; just follow the instructions first. If you find that the signal error rate is high and the signal is incorrect, then make adjustments.

There is no standard signal that can guarantee a hundred percent accuracy. If there were, you would have become a billionaire long ago.

Failures, or trial and error, in the stock market serve as the foundation for you to climb to a higher level.

However, do not bet heavily on trial and error, otherwise, you will lose the capital to change your fate.

Thirdly, long-term signals are more effective than short-term ones.

In comparison, a signal that is long-term is definitely more accurate than a short-term signal.

The fewer times a signal appears, the higher its accuracy.

Some signals may be wrong because the capital intentionally avoids them. The main force wants to make money, not do charity.

However, when the main force creates signals, such as washing the market, there is a cycle, and they will not keep doing it forever. They will eventually raise the price.

If they can avoid daily signals, what about weekly and monthly signals?The longer the period of a signal, the higher the efficiency of the signal naturally becomes.

Therefore, those who engage in large-scale market trends have a very high probability of making money.

On the other hand, those who trade in the short term simply cannot keep up with the signals and are easily caught off guard.

Fourthly, the signals of large-cap stocks are more effective than those of small-cap stocks.

When signals are applied to indices and large-cap stocks, they are much more accurate than when applied to small-cap stocks.

The reason for this situation is quite simple.

Large-cap stocks are not easily manipulated and are the result of the collective action of capital.

Small-cap stocks, however, can be easily controlled by capital and can manipulate the rise and fall of stock prices with ease, releasing false signals to mislead.

It's not that large-cap stocks cannot be cornered, but the cost is high, the difficulty of selling is great, and they are easily subject to regulation.

But for those small-cap and micro-cap stocks, some major players are covertly manipulating them, using signals to harvest the "leeks" (a term used to describe retail investors who are often at a disadvantage in the market).The core of a trading system is how to set standards and then use the buy and sell signals released by these standards to conduct transactions.

The trading system is not very complex, but the process of practice will definitely be very long.

Moreover, there is an important point, that is, the trading system and the theory formed by others are invalid for oneself.

Because behind the theory, there is a lack of practice, which is easy to deform.

The trading system is different for every retail investor, there are no two identical leaves, just as there are no two identical people.