Many people speculate on coins, always staring at the comparison between long and short, and feel that the main force is buying when it rises, and the main force is smashing when it falls. But if you dig a little deeper, you'll see that the essence of the market is not like that at all.

Sometimes, the market goes up and down, is it really because you draw a trend line? When reviewing, you can always draw a direction that you are satisfied with, so if it doesn't work, just like that, anyway, you can always find an explanation for yourself.

Is the market going wrong? The teacher tells you that this is a parallelogram structure. Wrong again? Explain it in a prismatic way. Wrong again? Change to a rectangle. Why is this a drawing? Does the rise and fall of the market really depend on the squares you draw? Those who make deals do trades, and those who draw draw draw.

The essence of the currency circle has always been a game of funds, not that if you draw a few lines, the price will really go as you think. What era, don't take your millet plus rifle to jerk off, capital is the only driving force of the market

The structure of the market is simple, there are two types of people: liquidity providers (market makers) and retail traders. The role of a market maker is to provide buying and selling depth and make the market liquid, while retail traders are nomads in the market, running around with price fluctuations.

Once a liquidity provider cancels an order, there will be a "liquidity vacuum" in the market. At this time, the seller wants to sell, and the buyer wants to buy, but there is no counterparty, and the market will fluctuate violently. Many people think that the breakthrough is a wave of large funds actively buying, but in fact it is not, what really drives the market is often the passive "stop-loss order" and "liquidation order".

LC can't predict whether there will be enough liquidity or active orders at any one level, but there is one position that is very clear, and that is your stop loss

For example, this bearish pattern, no matter where you open a short position, but the stop loss will be placed there, and most of the risk control points for all traders are usually relatively concentrated. As soon as the market hits the stop-loss zone, it triggers a forced liquidation, further pushing the price to accelerate in a certain direction.

That's why the market tends to "hit your stop loss first and then go in your direction". Maybe you're right, but after the market hits, your stop-loss market is even more right.

Each price range of the market is essentially a long-short balance. But once the key point is broken, a large number of stop losses will be triggered, such as the short stop loss order is eaten, forming a forced buy, and the price will rush up instantly. At this time, the market is not the main force sweeping the goods, but because a large number of people who originally sold were forced to close their positions, forming a "passive buying order".

What's more, this liquidity imbalance can have a ripple effect.

If the market maker cancels orders further, the market depth becomes shallower, and the remaining orders are more likely to be eaten, resulting in more stop-loss triggers. Then, those programmatic trades and quantitative strategies that do breakout trades will be bought again, which becomes a trend accelerator. The market is launched, and then it is launched, and finally it becomes a stampede.

The market is not the main force that pulls and smashes if it wants, but because of the combined effect of liquidity imbalance, stop-loss liquidation, and quantitative follow-up trading, a trend market has been formed.

The market is rising, not entirely because the main force wants it to rise, but because of the short liquidation, stop loss, and lack of liquidity leading to passive buying to push the price up.

On the contrary, when the market plummets, it is not necessarily the main force that is smashing, but the market maker cancels orders and liquidity collapses, so that the longs' stop-loss orders and liquidation orders are detonated one after another, forming a stampede.

If you've been stuck in the question "Is the market long long and short long?" You will never understand the real driving force of the market. The rules of the game in the market are not a long and short duel, but a game of unbalanced liquidity.