Orson Merrick: The most perfect 2560 strategy in history, stable and safe!

Most investors only go long, so when the stock market rises, most can make money. But to become a winner, one must also hold onto making money. Profit is difficult, storage is not easy! When there is a long short transition, many people will spit out most of their profits during the decline, and there are even many who turn from winning to losing. Sadly, those who lack basic skills and a sense of long and short direction will not even have the capital to continue trading once a huge loss occurs.

Therefore, the winner of the stock market is not how much profit there is when the stock market rises, but what truly determines the winner or loser is when the stock market falls. Over the past decade, I have seen too many cruel facts of long and short alternations in the stock market, where there are only a few profitable stocks when the stock market rises by 2000 points, and everyone lives in a house when it falls by 500 points. Therefore, who can avoid a decline, achieve profits, and retain most of the funds is the winner. Even in a downturn, those who can see the trend accurately, dare to short the market, and profit from the decline will eventually be the masters and the big winners.

Recently, some investor friends often ask what the 2560 strategy is. Today, we have specially set aside some time to study it. This strategy is inspired by the Swiss American short-term investment guru Andrew Bush, who has won the world's top Wall Street Trading Championship four times. He mainly used what we now call the 2560 tactics.

Instructions for using the 2560 strategy:

The 2560 strategy used is very simple: the 25 day moving average is firmly upward, and when the 5-day moving average crosses or steps back on the 25 day moving average, a trading volume of 5 is greater than the 60 average, which is an opportunity for intervention. It is best to have a small star line transition at this time:

1. Whenever the K-line starts and the 5-level average falls below the 60 level average, it is a tempting opportunity and we must give up resolutely.

2 When the K-line starts moving on the 25 day moving average, crossing the 5-day moving average above the 60 day moving average is called momentum, which is a short-term opportunity with an unstable pattern.

3 When the K-line starts moving on the 25 day moving average, the front wave's 5-day moving average rubbing against the 60 day moving average is called trading volume. The band opportunity and pattern have already formed.

4 When the K-line starts moving on the 25 day moving average, the 5-day moving average has already been above the 60 day moving average for a period of time, but in the past one or two days, there has been the lowest volume of the pit volume line, known as a contraction, a black horse opportunity for bull stocks.

Buying conditions for "2560 Tactics":

The 2560 strategy requires two basic conditions: firstly, the 25 day moving average must be upward; The second requirement is that the 5-day moving average must be above the 60 day moving average. Only stocks that meet both of these conditions can meet the requirements of the 2560 strategy and be bought based on the following conditions.

1. When stepping back on the 25 day moving average, the trading volume continuously decreases, and it is best to see land volume below the 60 day moving average;

2. Close a small star line near the 25 day moving average to stop the decline, preferably with multiple small star lines not hitting new lows;

Due to the large number of stocks that meet the above conditions, the following conditions can be added for further screening and filtering to enhance the safety of the stocks.

1. The 5-day moving average is generally flat, and it is best to tilt upwards;

2 It is best to have a golden cross for the J value of KDJ to go up;

3 The MACD green column is shortened or the red column is lengthened.

Selling conditions for "2560 Tactics":

If one of the following conditions is met, it is necessary to consider reducing positions. The more conditions are met, the more you need to sell:

1. When the stock price is far away from the 25 day moving average or there is a "runner" phenomenon.

2 When the J value is above 100 or when J is downward or KDJ is deviated from the top.

3 When the K-line is near the high point of the previous wave.

4. When the stock price does not reach a new high after a strong pull up.

5 When the K-line is near an important moving average.

6 When the K-line is in a chip intensive area or platform position.

7. When the 5-day moving average crosses with the 60 or 120 day moving average.

Practical cases:

The white line in the above figure represents the 5-day moving average, the pink line represents the 25-day moving average, and the yellow bar represents the 5-day moving average crossing the 60 day moving average. The white line represents the 5-day moving average, and the yellow line represents the 60 day moving average.

Two buying points:

The first buying point is to cross the 25 day line above the 5-day line, where the 5-day average is greater than the 60 day average

The second buying point is for the stock price to retrace the 25 day line, with trading volume greater than the 5-day average line

In the above figure, before crossing the 60 day average on the 5-day average, although there were also two small and ultra short opportunities, these opportunities did not meet the requirements of the 2560 Tactics, so we must resolutely give up because "whenever the K-line starts and the 5-day average is below the 60 day average, it is a tempting opportunity.". So, we must wait for the 5-day average to surpass the 60 day average before finding an opportunity to enter.

The only way for small funds in the stock market to grow is to teach you the most "stupid" methods, memorize them frequently, and know how to buy and sell

1. Low lock of chips

In the process of a stock's rise, in general, a strong rise in the stock price will lead to upward divergence of chips, but in some cases, chips will not transfer to the top, and the vast majority of chips

Still settling at a low position without moving, this distribution state of chips is called "low lock" of chips. In terms of the distribution of chips alone, the low density and low locking of chips appear to be almost the same. The difference lies in the stock price trend of the chip distribution: the low density of chips presents a horizontal trend after a deep decline in the stock price, or a low fluctuation after a deep decline in the stock price; The trend of the low locked chip's stock price should be an upward trend, which means that the low locked stock price should generally be in the process of being pulled up by the main force.

To explain this issue, it is necessary to explore what caused so many chips to be locked low.

Once the profit of a stock exceeds 10%, one's mentality is very excited, nervous, and even fearful - this 10% is not easy, especially afraid that the money obtained will be taken by others. For small and medium-sized investors, if the floating profit reaches 10% and they are just restless, then once the floating profit reaches 20%, it is almost impossible to hold it. On the other hand, a large number of chips have made a profit of up to 30%, but no one has thrown them. Who has such good composure? There is only one answer: it is the banker. 30% is a big number for both you and me, but it's too little for the banker. A 30% price space may not be the target level for the main players to profit from. So, the low lock of chips indicates an important piece of information about this stock - the banker's high position. Since it is a high position of the main force, a 30% increase in price is not enough to satisfy their appetite. It is obvious that if an investor held the stock before it rose, and now they have a 30% floating profit, should they sell or not? Of course, it's better not to sell.

2. The high density of chips

Contrary to the low density of chips, the high density of chips is likely a sign of main shipments. These high-level chips are the form of upward transfer of low-level chips, indicating that a large amount of profit taking behavior has occurred or is occurring in the market.

The high density of chip distribution is a quite dangerous technical characteristic of individual stocks. The market meaning of high concentration refers to the large-scale profit taking of low profit positions at high levels. The rapid rise in stock prices must be the result of the main force pulling up; The reason why the main force is willing to lift these stocks must be because they have a large number of low priced chips; At this point, the disappearance of these low priced chips at high positions indicates that the main force is shipping on a large scale. It can be said that the high density of chips in most cases means the departure of the main players in the early stage.

The old family is selling stocks, and the recipients of these stocks may be retail investors or new family members. Anyway, if there is something to sell, there is something to buy. This is an unchanging market rule, and it is difficult to determine who the buyer is. The subsequent trend of most high concentration stocks was a sharp decline, but there are indeed some stocks that formed a new round of rise after showing high concentration, which may be due to the entry of new stocks and doing a relay speculation. However, from the perspective of investment safety, it is recommended not to buy stocks with high concentration, as once entering the market during the main shipment, the opportunity to unwind in the future is often very slim.

3. The low density of chips

If the chips are dense in the low price range, they are called the low density of the chips, while if the chips are dense in the high price range, they should be called the high density of the chips. Of course, high and low here are relative concepts. The high and low prices of stock prices do not necessarily refer to the absolute value of stock prices. A few yuan is not necessarily low, and a few tens of yuan is not necessarily high. Therefore, the low density of chips refers to the new concentration formed in a relatively low price area after a deep decline in stock prices from a certain price point. A more precise definition can be given to the low density of chips: when chips flow from high to low and aggregate in a relatively low narrow price space, it is called "low density of chips".

After the chips formed a low density, investors in this stock underwent a large-scale shift: the previous high level held up positions were recognized as losses and eliminated. So, who exactly cut the meat and left the field? It's hard to imagine investment institutions in the stock market, such as securities firms and foundations, taking on huge losses and leaving. They are the main investors in the market, and because they have sufficient funds, there is no need for them to surrender. In fact, these meat cutting plates are almost all done by retail investors. It can be concluded that once there is a low level of density in the distribution of chips, the party that cuts the meat must be a retail investor

Finally, investors should adhere to the following elements when operating stocks to increase the likelihood of profitability:

(1) Only do familiar stocks. Stock risks are high. If you are not familiar with them, it is best not to involve them, otherwise you may accidentally step into a minefield. Only by becoming familiar with stocks can one better understand their upward and downward trends, accurately grasp the pulse of stock prices, and thus reduce investment risks.

(2) Seize the opportunity and make a decisive move. When making investments, the most taboo is indecisiveness and indecisiveness. During your hesitation, you may miss the best opportunity to make a move. When trading stocks, it will be interrupted; otherwise, it will be disrupted.

(3) Stable, accurate, and ruthless. Stability refers to having a detailed understanding of various aspects of a stock and having a clear understanding of its trends, in order to achieve stability in stock trading; Accurate, refers to entering the market and taking a long position once the market price is accurate and meets the expected level; Cruelty refers to having the courage of a warrior to break their wrist and sell stocks when the trend judgment is wrong or when buying stocks with poor market conditions. Of course, there is another meaning, which is accurate trend judgment. If you buy stocks with good market conditions, you can increase your investment appropriately and seize the opportunity to win.

(4) If you win, fight; if you don't win, run. Treat stocks as competitors and invest if you have confidence in them; If you are unsure about it, make more preparations to reinvest or give up investing.

(5) The trend is not clear, enter the game with caution. There are many opportunities for profit in the stock market every day. When we cannot understand the trend, we should be cautious when entering the market. Only by seizing stocks with clear trends can we help us achieve ideal returns. There is no need to take high risks to invest in stocks with unclear trends.

Speculative markets are like a mirror, reflecting not only the level of your skills, but also the strengths and weaknesses of your humanity. You can speak lies to your heart's content, but your behavior always honestly reflects your true thoughts. Whether it's stop loss or stop loss, what you say is not important, what you can do is fundamental. This does not require any fancy packaging. If you do it, you will do it. If you don't do it, you will not do it. All excuses may be the reason why you can't make money. Therefore, it is important to find out why you always can't make money and why you can't execute even the simplest strategy every time.

Trading is about managing risk, not profit. This is the difference between novice traders and experienced traders. The former tends to worship profit more in their eyes, while the latter tends to be more respectful of risk. Indeed, in a bull market where fools can make money, there is no one who swims naked. When the tide recedes and the high and low stand out, we cannot change the market, we can only change ourselves. Changing ourselves means adjusting our mentality.

Risk means potential losses, and no matter what trading methods everyone adopts, they must always face risks. The most important prerequisite for staying in the market is the controllability of losses. Everyone is pursuing windfall profits, and who can bear the risk of explosive losses? A prerequisite that must be acknowledged is that everyone's level of risk tolerance is absolutely different. When you want what kind of profit, first think about what kind of losses you can bear. Since you can't afford to sell out, don't think about doubling every day.

What is the most important thing in a transaction? In fact, everyone's answer is definitely different. Why? Because everyone has different levels of transaction cognition.

When I first started trading, the first impression I had was that mindset was the most important, because during trading, I was always nervous and hesitant. I feel that I need to remain calm, so I pay special attention to my mindset.

But after trading for a period of time, I realized that stop loss was more important because at this stage, I often suffered big losses and did very poorly in stop loss.

After I was able to handle stop losses with familiarity, I suddenly realized that trends were more important because even if stop losses were good, I still couldn't make money. Only when I could make a profit in a trend can I do so.

After doing it for a while and getting used to stop losses and trends, I realized that trading systems seem to be more important because if we can't systematize them, there is too much subjective uncertainty in our trading process, and the system can stably output its own trading logic.

After running the trading system for a period of time, I suddenly realized that execution seemed to be more important because even if you have a trading system, if you cannot consistently execute it, it is no different from not actually executing it. Therefore, at this stage, execution has become the focus of my attention.

After a period of time when there is no problem with execution, one may realize that luck is important. Because even if your system is complete and without vulnerabilities, your execution power is decisive and direct, and the variety you trade does not show market trends, it will still affect your trading results.

In the future, we may find that, after speaking a thousand words, risk control is still the most important and survival is the most important. Because as long as you live, no matter how lucky you are, you will eventually wait for your market, as long as your risk control can ensure that you maintain complete combat effectiveness in any unfavorable situation. You can achieve the profit you want.

If you discover your weakness, you will feel that it is the most important thing in your trading. In fact, for you, that is indeed the most important thing because only by solving this problem can you go further. So, for all traders, the most important thing, there is no fixed saying, is the challenge you face in front of you.

So, for every trader, the best trading opportunity is not being able to see how far profit potential is, but rather being able to control and accept risks, with predictable profits.