Category: Money tips Release Date: 2007-02-26
"If the city rose and then adjust the rate of increase of more than 50% of the selling pressure is more than buying, the overall increase would be all the colors; on the contrary, if the fall after the rebound, rebound fell more than half the buying power of large, the overall decrease will be fully recovered. If the adjustment is less than 50% increase, buying power of the weak, the market will continue to drop. "
After long years of study of investors found that 50% of the principle has its merits, it has its shortcomings, not in every type of market are not be accurate. Its value, in short, the following points:
1. This target by the bear market into a bull market, the most reliable signal. Among the big city, a long-term bear market decline, the index rebounded strength gradually become weaker, until the end of the panic selling, under the third phase of a bear market. If, after a long bear market increased by 50%, it marked the return to a bull market, but the criteria must bear market has been quite a long time, an endless stream of bad news, bad news already reflected in stock numb.
2. In the stock market by the bull into a bear market, the initial investors are still reluctant to believe that the stock market will be a wave is less than one wave of the bull market still love hanging scenery, it is still a good chance to rebound in the stock market more than 50%, this is just a bear market Early rebound trap, do not apply the principle of 50%. Will continue to plunge in the stock market after the rally until the end of a long bear market, the theory formally begun to play its effectiveness.
3. The stock market can occur very long bull or bear market. For example, starting from the 60's, the world's mega-bull market until 1989, 30 years to keep the stock market is still good. Between the three years of bear market for several decades-old trend of little effect. For this giant bull or bear market, 50% of the theory can not be applied.
4. For the short-term speculation, such as three-month trend, 50% of the theoretical accuracy is higher than half, but it is not perfect, there are still many opportunities for mistakes.
50% of the theory is a well-established methods, the greatest usefulness is still in a bear market when the probe into a bull market, so that we take a step into the market as early as pre-clinical and gained huge profits. But investment experts found that the short-term fluctuations in the wave inside, adjusting the rate of increase can be 1 / 3, 1 / 2, 2 / 3 and 0.168 can not be rigid attachment largest city, rose and then adjusted the 2 / 3, or more than 50% of , big city will not fall any further. The short-term ups and downs in the wave inside, the best is still to make reference to the golden section law, charts, moving average line, lifting index and analysis of indicators, not alone a 50% theory, but if the big city has been going down for a long time, for example, two years, the stock market turnover also extremely low, but rebounded after the decline by more than half the investment will have to improve watching the stock market, because the cutting of the Ho moments again and again. A bear market rally, after 50% drop, that is, the stock market when the weather arrived.
