In the market, there’s no shortage of people who use indicators to draw lines and predict price movements—but truly living off trading is rare.
Most people go off track from step one, treating technical analysis like a crystal ball for predicting the future. The truth is: technical analysis is never meant to predict the future. It’s meant to build your probabilistic edge and a framework for risk.
If you really want to understand trading logic, John Murphy’s Technical Analysis of the Futures Markets is the foundation you can’t get around.
The core of this book is to explain, in depth, that “market behavior encompasses all information.” The real flow of funds is more honest than any piece of news. When large money enters or distributes, its path will inevitably show up in price and volume. The essence of technical analysis is a quantified record of the psychological battle among participants and the resulting outcome of the funds’ game.
For example, support and resistance are essentially a contest between areas of concentrated positions (chips) and points where liquidity faces pressure. A breakout of key levels must rely on large capital absorbing the selling pressure wall and breaking the existing balance.
But most people who still end up losing money after finishing the book fail because they treat patterns as rigid, mechanical setups. Seeing a head-and-shoulders bottom and assuming it must rise, while ignoring that widely visible chart patterns are easily targeted by market makers. A “perfect” breakout on a chart may well be a liquidity trap designed for retail traders.
The real benefit from technical analysis is not improving your win rate; it’s giving you a clear logic and a rationale for placing stops.
It tells you when your assumptions have failed. Even if your win rate is only 40%, by controlling losses and amplifying the reward-to-risk ratio, you can still survive by relying on positive expected value. Clear out the flashy indicators and return to the most original K-line (candlesticks) and volume. Trading has never been about who can predict more accurately—it’s about who can hold on when they’re right, and who can run fast when they’re wrong.$BTC #交易
Most people go off track from step one, treating technical analysis like a crystal ball for predicting the future. The truth is: technical analysis is never meant to predict the future. It’s meant to build your probabilistic edge and a framework for risk.
If you really want to understand trading logic, John Murphy’s Technical Analysis of the Futures Markets is the foundation you can’t get around.
The core of this book is to explain, in depth, that “market behavior encompasses all information.” The real flow of funds is more honest than any piece of news. When large money enters or distributes, its path will inevitably show up in price and volume. The essence of technical analysis is a quantified record of the psychological battle among participants and the resulting outcome of the funds’ game.
For example, support and resistance are essentially a contest between areas of concentrated positions (chips) and points where liquidity faces pressure. A breakout of key levels must rely on large capital absorbing the selling pressure wall and breaking the existing balance.
But most people who still end up losing money after finishing the book fail because they treat patterns as rigid, mechanical setups. Seeing a head-and-shoulders bottom and assuming it must rise, while ignoring that widely visible chart patterns are easily targeted by market makers. A “perfect” breakout on a chart may well be a liquidity trap designed for retail traders.
The real benefit from technical analysis is not improving your win rate; it’s giving you a clear logic and a rationale for placing stops.
It tells you when your assumptions have failed. Even if your win rate is only 40%, by controlling losses and amplifying the reward-to-risk ratio, you can still survive by relying on positive expected value. Clear out the flashy indicators and return to the most original K-line (candlesticks) and volume. Trading has never been about who can predict more accurately—it’s about who can hold on when they’re right, and who can run fast when they’re wrong.$BTC #交易