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On the operating principle of stock market

The stock market is the place where issued stocks are transferred, traded and circulated, including exchange market and OTC market. Because it is based on the distribution market, it is also called the secondary market. The structure and trading activities of the stock market are more complicated than the issuance market (primary market), and its role and influence are also greater.

There are three main methods to analyze the stock market: basic analysis, technical analysis and evolution analysis, in which the basic analysis is mainly applied to the selection of investment objects, while the technical analysis and evolution analysis are mainly applied to the temporal and spatial judgment of specific investment operations as a useful supplement to improve the effectiveness and reliability of securities investment analysis.

(1) Basic analysis: The basic analysis method is based on the traditional economic theory, with the enterprise value as the main research object, and makes a detailed analysis of the macroeconomic situation, industry development prospects and enterprise operation conditions that determine the internal value of the enterprise and affect the stock price, so as to roughly calculate the long-term investment value and safety margin of listed companies, and compare them with the current stock price to form corresponding investment suggestions. According to the basic analysis, the fluctuation of stock price cannot be accurately predicted, and only when there is enough safety margin can we buy stocks and hold them for a long time. Main textbooks: securities analysis, etc.

(2) Technical analysis: Technical analysis is based on the traditional securities theory, with stock price as the main research object, with the main purpose of predicting the fluctuation trend of stock price, and starting with the historical chart of stock price changes, it is the sum of methods to analyze the fluctuation law of stock market. Technical analysis holds that market behavior is all-encompassing, and stock price fluctuations can be quantitatively analyzed and predicted, such as Dow theory, wave theory, Gann theory and so on. Main teaching materials: Technical Analysis of Securities Investment, etc.

(3) Evolutionary analysis: Evolutionary analysis is based on evolutionary securities theory, taking the life movement characteristics of stock market fluctuation as the main research object, starting from the aspects of metabolism, profit-seeking, adaptability, plasticity, stress, variability and rhythm of the stock market, dynamically tracking the direction and space of market fluctuation, and providing opportunities and risk assessment methods for stock trading decisions. Evolutionary analysis holds that stock price fluctuation cannot be accurately predicted, so it belongs to the category of fuzzy analysis. It does not attempt to provide quantitative description and prediction for the trajectory of stock price fluctuations, but focuses on establishing a brand-new analytical framework for investors to scientifically observe and understand the logic of stock market fluctuations.