What is Pankou language? In short, it refers to the movement of funds during trading. Disorderly flow of small funds cannot determine the fate of stock prices, they usually have to go with the flow. Only stocks that frequently experience large capital movements during trading will reveal market language in their trends, which is what we should truly focus on.
If the strength of the main force is solely determined by funds, then the main force's way of speaking is through insider language. A stock, whether it has stocks or not, big stocks or small stocks, good stocks or bad stocks, will all be reflected through market language. Every transaction during the trading session is telling us the true intentions of the main funds. At different times, at different prices, in different market patterns, even the same market language has different meanings. Similarly, the trading language varies for different individual stocks. In other words, different main market makers have different trading styles. It is necessary to track the stocks that one is concerned about for a long time and closely monitor the market opening in order to gain a deeper understanding of the market maker's language and understand their way of speaking. Understanding colloquial language is a fundamental skill for becoming a successful person.
1、 A Simple Classification of Pankou Language
Just like human language, Pankou language is also extremely rich and colorful. No Chinese language expert can say that they have a profound understanding of the mysteries of the Chinese language. Similarly, in the stock market, no investor dares to say that they have fully understood the trading techniques of the market makers. As an investor, it is necessary to focus on the basic grammar of market language and constantly explore and improve one's knowledge in practice. The following content is a simple classification of some colloquial language, which is also my experience in the market trading process. Of course, colloquial language is far more than just these. The author intends to inspire and seek advice generously.
1. Cheng.
'Cheng' is one of the basic grammars of Pankou language. Simply put, it means that the main players of the market makers or institutions are buying from below. Undertaking and protection are two different grammars, although they look the same in some cases; The commonality between the two is that "taking over" and "protecting the market" often occur during times of poor market conditions. Undertaking is the initiative of the main force, and the market makers often place a large number of buy orders on buy one, buy two, and buy three, and are not afraid of being suppressed by large orders. However, market protection is passive, often resulting in fewer opportunities for buying at lower levels. If the market experiences a sharp decline, the stock price tends to plummet, usually relying on surprise attacks at the end of the day to maintain the stock price from falling too sharply. 'Cheng' may experience a downward trend, but 'Hu' generally does not decline, or the decline is relatively small, and the trend should be significantly stronger than the overall market. In September 1999, there was a continuous decline in the stock market. Due to the fact that Hualin Tire had just been listed, the market makers did not build sufficient positions. Suddenly, the market reversed and many sell offs came. Hualin Tire's market makers continued to build positions using the "take on" technique. At that time, Hualin Tire almost had a spectacular situation of "selling only a few hundred lots and receiving several thousand lots below" during daily trading, with a commission value of over 90% from morning till night. After the trend warmed up in 2000, Hualin Tire experienced a strong market trend. The funds at the time of 'commitment' are actual positions, which are the position building positions of the market maker. According to the trend, "cheng" can be divided into three types: downward, sideways, and upward; Divided by the intensity, there are large order acceptance type and small order acceptance type; Divided by time, there are continuous, intermittent, and so on.
2. Protect.
'Protecting' means protecting the stock market, which means the main capital supports the stock price to prevent it from falling too much. The language of protecting the market often appears when the market maker is just about to rise, but suddenly encounters a bad overall trend, or when a stock is suddenly suppressed by negative news; It is also seen that market makers, due to various factors, suppress the stock price to near their cost price, preventing off exchange investors from buying cheaper chips to protect the market. There are many ways to protect the market, such as: when a company suddenly issues a pre loss announcement, the market makers are caught off guard, the stock price opens lower, and then gradually rises to attract buying and reduce pressure on the market makers. This method of protecting the market is also commonly used during the period when the market maker is selling. For example, the market maker secretly sells every day, gradually falling at the beginning of the morning market and pulling up in the end to maintain the stock price from falling too quickly, so that it can be distributed again in the future. Since the listing of Shenergy Corporation through a rights issue, this trading language has been consistently present during trading. The purpose of the banker is different, and the way of protecting the market is also different. Divided by trend, there are resistance to decline and sideways trend; Divided by time, there are two types: late session and early session; Divided by function, there are real disk and virtual disk types; wait.
3. Suck.
The use of "suction" as a colloquial language is more common during the suction stage. There are many ways to 'suck', such as suppressing suction chips, raising suction chips, etc. If there is a stock, every time it sells at a certain level during the trading session, several or more individual orders accumulate to a certain amount, and suddenly one or several consecutive large orders consume all the retail investors' selling orders on the selling table, combined with the price of this stock, you can quickly determine whether there is a Zhuang family attracting funds. The tongue of 'suction' is difficult to master. Especially when it comes to pressure suction and pull up suction, it is difficult to distinguish between them and 'shipment'. According to the trend, "suction" can be divided into horizontal suction, pressure suction, and pull up suction; According to the opening method, there are two types: low opening and high moving, high opening and low moving (similar to a downtrend); Divided by strength, there are strong suction, slow suction, and so on. The trend of Shanghai Automotive in the first half of 2000 is a classic work of daily high opening low running and strong suction, which is rare in recent years.
4. Turn around.
Also known as reversal or knocking, it is more common in the lifting stage and distribution stage. Don't see the buying trend rising one after another in the market, but the main players' chips haven't increased. They just buy and sell, sometimes even decreasing. The typical form of inversion is a cat fishing style trend. According to the different purposes of the main force, there are different ways of transferring, such as non increasing positions, moderately increasing positions, and distributing chips.
5. Stop.
That is, limit up or limit down. The 'pause' has significant implications for the trend of stock prices. Some investors like to chase after the rise and kill the fall, such as Ye Shan's "Dragon Rule", which only focuses on stocks that hit the limit up. Of course, for short-term experts, this is also a good way to follow the market, but overall, the risk is too high in balancing the market. 'Stop' is divided by time, including limit up or limit down at the opening, morning stop, afternoon stop, and closing stop. It is also divided by the number of pending orders, including large limit stop and small limit stop. The research on stopping has great practical significance. For example, if there is a huge limit up at the opening, it can be appropriately chased up the next day; Massive limit down, never buy. In June of this year, both the Shanghai and Shenzhen stock markets experienced unlimited limit up trading, or the limit up board repeatedly blocked individual stocks that had opened multiple times and had small orders with limit up trading at the end of the day. There is a high possibility of these individual stocks selling. In the first half of this year, there were also many stocks that sold in a limit down pattern. These stocks have been operated by market makers for many years, with a large number of chips. Often, after two or three limit downs, a huge amount of stocks will reverse and open the limit to attract buying. After selling out most of the stocks, they will sell them in a limit down style the next day. Many investors, such as Dalian International, have been deceived.
6. Shock.
As the name suggests, it means a significant oscillation. The purpose of 'shaking' is twofold: firstly, to shake the warehouse, and secondly, to shake the shipment. They look almost identical on the platter, but because of their different purposes, the platter language is still different. To distinguish between the two, one is to see how much their stock price has increased since its launch. Generally speaking, if the increase is less than 50% (adjusted according to the strength of the market), it is mostly a shock; If there is an increase of 70% or more, or even 100% or more, it is mostly due to fluctuating shipments; The second is to look at the market position. When there is a shake up, the chips are more in than out, at least not in or out. When there is a shake up in shipments, large orders are frequent, and selling is heavy, resulting in virtual in but actual out.
7. Different.
'Yi' refers to a trend that is different from the usual. If opened significantly lower, quickly pulled to the normal price range; Or when a large order suddenly drops below -7% during normal trading, and then immediately resumes normal trading; Or open high, then trade normally, and so on. Stocks with abnormal trading situations, except for a few occasional mistakes by investors, should be intentionally caused by the main force. Based on its price and market conditions, it is possible to largely guess the purpose of the main force. For example, stocks that receive "red envelopes" or stocks that suddenly liquidate at the end of the trading session, and so on.
2、 The Practical Significance of Pankou Language
1. The market maker, relying on their financial strength, can cheat lines, charts, volumes, and technical indicators, but it cannot cheat the inflow and outflow of funds (also known as the inflow and outflow of chips). To understand the market language of the market maker, it is necessary to understand whether large funds are entering and exiting the market in real terms or in real terms. This is the key to monitoring the market and analyzing the behavior of the market maker. The purpose of learning stock market language is to determine the authenticity of the flow of funds.
2. Real time monitoring of the stock market should not exceed three stocks at most. No matter how much you do, you won't be able to understand the actions of the banker. For example, in the case of a large selling order by a banker, whether it is a real or virtual one depends on whether there is a sudden large hanging order in the lower range at that time. If there is, it is a virtual one, meaning that the banker did not sell, but intentionally did it for a certain target; If not, it is actual. Like Shanghai Automotive, on a certain afternoon in early July, there were 5 large sell orders for more than 200000 shares within one minute. At that time, there were few pending orders below, so it was obvious that there would not be so many retail investors taking over, but rather the main force shaking their positions.
3. The observation of the operation of the main capital is emotional, and sometimes we are easily deceived by our own emotions. The analysis of market language must be combined with other effective analysis methods such as candlestick combinations and the number of shares traded in a single transaction in order to more effectively analyze the main force's action objectives.
