Category: Money tips Release Date: 2006-12-19
To determine the future evolution trend Quotes are various ways, in some cases investors can be applied to look at the opposite theory.
The main point is that the opposite theory, in practice, we should focus the majority of investors in the market to determine, and in extreme cases, with an absolute majority to take the opposite view. The theory suggests that when the When everyone is optimistic and most likely is at the top of the beginning, should be considered sold; when everyone is pessimistic about the panic will mean a Trend has been nearly depleted, this time prepared to do well at any time in the approach
.
Theory of market analysis in fact the opposite argument is very simple. If the market for every one investors are optimistic and we all have this common understanding will be taken when buying strategy, in this case, the buyer power will be depleted, because anyone who would like to purchase has been completed of the buying operation, then continue to do more capital will be faced with the situation was untenable, the bull market and therefore will be in the vast majority of people optimistic atmosphere toward the end, market conditions began to change from cattle Bear. Similarly, if the market is in a recession, if investors believe that each and every afternoon there is room to fall, then all the people to see the empty action will be taken to sell. In the vast majority of investors that a pessimistic market outlook, the bearish virtually all those who have sold their shares, while the inside is very low at this time though, but it may have been, there were no sell-off. In the absence of short power case, the stock essentially reached its lowest position. Then not only should not follow the trend of selling, but should consider buying.
From the above analysis we can see, using the opposite theory, a prerequisite is to know that the vast majority of investors in view of the market. In actual application, the general difficulties are concentrated in the collection of information. Of course, rely on intuition to judge the subjective impressions and imagination to see how many people have more or to see space is not enough. Because investors can not get all the statistical data, and effective way is to collect as many newspapers and magazines published remarks to summarize analysis of long-short investment ratio, as a trading decision-making. From past experience, when the media was optimistic point of view or to see an empty afternoon filled pages, the majority of cases have been away from the big city, peaked or bottomed out close. This is because the mass media have taken the mass line, everyone has great enthusiasm when in fact it is the harbinger of a trend reversal. When the mass media focus has been a long time did not go to ignore the news of the market downturn, perhaps, just before dawn. Therefore, the mass media is actually the opposite theory, a good reference for information, the media, if one-sided point of view may show a bull or a bear market has come to an end. If the overall good, we should note that risk; the mass media, the general bearish if the contrary should be the timing.
In general, on the contrary theory, the state of the market in extreme cases, will yield better results. Because each investor sentiment may be subject to the surrounding environment, so the contrary in the application of the theory, it is important for investors to be able to judge for yourself, try to avoid being influenced by others, and left. Others competing to chase a time when they should be calm and to consider whether the price will soon peak and switch to bear; when other people fear the clearance, he could come to consider whether the opportunity. In addition, the need to note that the opposite theory does not deny the impact of the majority of investors Quotes, sometimes because the majority of investors share the views of the same high or low in the long run, the trend reversal may be unknowingly to complete The.
Therefore, this case needs to maintain a certain degree of patience will pay off. (Chen Zhiguo Jiangnan Securities)
Edited in the gold-line
