Many people don't understand what the market is, and they don't understand the type, trend, and combination status of the market. In fact, there is no overall market. The overall market is a whole made up of very specialized small markets, and each small market affects the overall market.
We can see the overall behavior of the market on a daily basis by looking at the various ** indices. For the purpose of trend trading, we only need to look at a few basic indices: the Shanghai Composite Index, the Shenzhen Component Index, the SME Index, the ChiNext Index, the STAR Market Index, the CSI 300 Index and the CSI 1000 Index. To keep things as simple as possible, I like to look at the Development Index** (ETF), which is the SSE 50 ETF which corresponds to the 50 representative companies of the SSE. and 510500 represents the CSI 500 ETF**.
You can also refer to the CSI 300 Index, which corresponds to the ETF** 510300), which is a good benchmark, it contains 300 representative companies in Shanghai and Shenzhen, and it is also the most productive company in the country, it is very similar to the CSI 500, except that the latter has a larger number of listed companies. We don't necessarily need it when we do an analysis of the overall market.
More experienced traders can also analyze specific market indices and sector indices. If you want to do the same, I suggest you add the following chart index to your observations.
510050 (corresponding to the 50 companies on the Shanghai Stock Exchange) - tracking the 50 largest listed companies.
159633 (corresponding to the CSI 1000 Index) - tracking the 1000 most representative listed companies in Shanghai and Shenzhen.
588080 (corresponding to 50 companies on the Science and Technology Innovation Board**) 1 Track 50 large-capitalization medium-sized companies on the Science and Technology Innovation Board.
159915 (corresponding to the GEM Index) – Tracks a representative number of small companies on the GEM.
159901 corresponds to 100 companies in Shenzhen** - Track the entrepreneurship of 100 representative medium-sized companies in Shenzhen.
Below is the sector sector index.
562510 a tourism sector company.
562600 A biomedical company.
562590A Semiconductor Materials Corporation.
562350 - Electric power listed companies.
588200 a science and technology chip company.
159768 a real estate company.
512000 - Listed companies of securities firms.
513010 a telecommunications company.
159880 - Non-ferrous companies.
159805 1. Media companies.
515220 Room 1 Coal Resources Company.
In the end, we found 5 different market conditions. They are:
Strong** trend.
Weak** trend.
Strong** trend.
Weak** trend.
Oscillation (or no trend).
Usually we only go long in the first two types of markets; Traders who like to go short will choose the latter two types of markets; The last type of market is filled with both bulls and bears.
Once we have figured out the overall pattern of the market, we can naturally define the trend and work out the right mode of operation.