Why do I always say that only looking at technical analysis is garbage? | Interpretation of "Explaining K-line Technical Analysis in One Step, Avoiding Ten Years of Mistakes After Reading" The sharing about K-line by Mr. Brain on Youtube is great and more thorough. I recommend it to everyone. There is a video link at the end of the article: His core idea of sharing is quite agreeable: The simple interpretation is: Don't treat technical analysis as a "secret to predicting the future". Prediction is all rogue, and those things are no different from mysticism, In the era of computer/quantification and the current AI era, fancy indicators and forms are prehistoric products that have been basically exploited by arbitrage; Does technical analysis have no value? No, he still has his value, which is what he called "positioning/tracking/risk control", and must obey the fundamentals. one ️⃣ First, dismantle the 'witchcraft' He believes that the things that most retail investors are obsessed with - candlestick patterns (Morning Star, Head and Shoulder Top), indicators (MACD/KDJ/RSI), and more mysterious waves/Gann/entanglements - are essentially: Manual quantification in the pre computer era You use the naked eye and simple formulas to find "repeatable patterns", but today Wall Street/quantitative funds use supercomputers to backtest millions of patterns to the extreme. If a pattern is really stable and profitable, it has long been wiped out by algorithms. So he concluded that what you learn and can openly teach you is often 'already ineffective'. two ️⃣ Is technical analysis still useful? It's not that K-line moving averages are completely useless, but rather that technical analysis is repositioned as not a forecasting tool, but a 'dashboard'. He proposed two 'postulates' (underlying worldview): Assumption 1: Prices fluctuate around value (people leading dogs) Value=People, Price=Dogs Dogs may run around (overestimating/underestimating), but when tied to a rope (according to the law of value), they will eventually return to the vicinity of humans How is it reflected in the picture? He uses long-term moving averages (such as annual/250 day moving averages) ≈ value centers; Assumption 2: Prices are pendulum like 'excessive fluctuations' The price will not just follow the value, but will go too far due to greed/fear/herd behavior; The greater the deviation, the stronger the force of return (the more 'tense'). Combine the two: The significance of technical analysis is not to predict fluctuations, but to measure "deviation and emotion". three ️⃣ Technical analysis "only answers 3 questions" A very practical framework: Technical analysis only does three things—— Location: How far is the price from the "value center/moving average"? (Deviation degree) Direction: Current trend up/down/oscillating? (Trend) Emotions: Have they reached an extreme? (Overbought/oversold) four ️⃣ What is the 'Xuantie Sword Technique'? (Core Method) Delete all complex indicators and leave only one sentence: trend+moving average; And it should be accompanied by the most important principle: following the trend and going against the trend; General trend: monthly/annual trend (long-term determines direction); Small trend: daily/weekly fluctuations (short cycle is noise+emotion). In terms of operation: Only focus on long-term upward trend targets; When the short-term pullback (small pendulum downward) approaches the long-term pivot point (moving average/value center), it will enter the market in batches; Don't chase the daily emotional climax. Also, avoid trading in volatile trends (repeatedly crossing moving averages, not hitting new highs or lows). five ️⃣ Complete investment process Clarify the division of labor between "moves" and "internal skills": Technical screening: Use trends/moving averages to quickly screen out candidates from thousands of individuals with "monthly upward trend+daily downward trend" (telescope); Fundamental research: understand why the moving average is moving upwards, whether it is a real improvement in performance/industry or speculation (microscope); Forward looking judgment: How long can this round of value improvement last? Valuation cap/cycle stage? Trading decision: Fundamentals tell you what to buy, technical analysis tells you when to buy; Only technology: may buy cheap but buy wrong (treading thunder) Only fundamentals: may buy right but expensive (chasing after the top) Combining: buying the right thing at the right time six ️⃣ How can you "simply use it" (one sentence version) 1) First, check if the monthly/annual chart is upward (only showing an upward trend); 2) Wait for the daily correction to approach the key moving average/pivot point and stabilize before buying (don't rush for the first cut). 3) If the fundamentals cannot explain why people are moving forward, then don't bet just because the picture looks good. seven ️⃣ For example, the current BTC price: According to his theoretical framework: BTC is in a "mid-term swing/clearance period in a long-term upward trend": the general trend (monthly value center) is still moving upwards, the small trend (weekly line) is still weak, and the price is above the long-term pivot point but has not yet recovered from the medium-term moving average; If you are in the long-term (>6-12 months) under his framework, you can consider "exploratory warehouse building/phased layout"; If you are leaning towards the medium to short term (a few weeks to a few months), his framework is more like an observation period/waiting for confirmation. At this time, you should not make a move. The weekly line should at least stand back and stabilize at EMA9 (≈ 92.9k) (representing the beginning of a small pendulum swing). A stronger confirmation is to return to the medium-term moving average area around 99-100k (representing the repair of the medium-term trend); Original video link: https://www. (youtube.com)/watch? v=eV2YqJYfjUQ