With the end of the literacy campaign on technical indicators, it seems that both retail and professional investors, institutional traders, and even industry researchers are now interested in technical analysis indicators.

Technical indicators are often results calculated through mathematical formulas, and the sample data used is mostly market trading data such as opening price, highest price, lowest price, closing price, and trading volume. After verification, the original creators of these formulas tell investors when to buy or sell, and so on.

The author once said that due to the intervention of the main force, there has been a phenomenon of not falling or not rising, resulting in false trading prices and volumes, which indicates that the sample for calculating technical indicators may be false.

But the problem is far from simple, because these trading prices and volumes may still be manipulated by the main players. In this way, the main force can make the technical indicators obedient.

Now let's take a look at the RSI indicator (Relative Strength Index).

The basic meaning of the RSI indicator is the proportion of the cumulative increase in the recent closing price to the entire volatility, with a parameter of 5 indicating a time of 5 days. If the closing price of a certain stock is 5 yuan, 5.2 yuan, 5.1 yuan, 5.5 yuan, 5.8 yuan, and 5.6 yuan for 6 consecutive days, the cumulative increase over 5 days is 0.9 ((5.2-5)+(5.5-5.1)+(5.8-5.5)) yuan, and the cumulative decrease is 0.3 (absolute value of (5.1-5.2)+absolute value of (5.6-5.8)) yuan. The overall volatility is 1.2 (0.9+0.3) yuan, so its 5-day RSI index is 75 (0.9/1.2 × 100). Since the 5-day RSI indicator only involves the closing price of 6 days, allowing the stock price to rise or fall continuously for 5 days can make the RSI indicator equal to 100 or zero!

Assuming a stock has risen for 5 consecutive days, with a total increase of 5 yuan, the RSI indicator is 100 because the cumulative decline is zero. In order to cause a decline in RSI, if the RSI drops by 0.01 yuan per day for the next 5 days, the RSI indicator for the 5th day must be zero because the cumulative increase is zero. In theory, if the indicator is adjusted properly, the stock price should be bullish, but in reality, the stock price has fallen by a total of 0.05 yuan, accounting for 1% of the 5 yuan increase, which can be said to have almost no adjustment.

In this example, changing the increase of 5 yuan to a decrease of 5 yuan, and changing the daily decrease of 0.01 yuan to an increase of 0.01 yuan for the next 5 days, we obtain the above counterexample.

In fact, as long as one understands the calculation formula of technical indicators, the main force can definitely make the technical indicators obedient.

For some common technical indicators such as BIAS, MTM, KD, etc., they can be easily manipulated, depending on the skill of the trader. It is also easy to increase trading volume, the only difficult thing is to reduce volume, which requires the experience of the trader. If investors focus on real-time trading trends, it can be seen whether the main force is intentionally manipulating technical indicators. According to the author's observation, there are currently not many main players intentionally manipulating technical indicators.

Although technical indicators can be manipulated, they are still very useful in market analysis, but their role is not to tell us buying and selling timing, but to tell us some statistical results of market transactions.