[Summary]
A three-day peak and a 100-day bottom is a rule of thumb that the top is short and the bottom tends to be long.
If you replace the three days at the top and the one hundred days at the bottom with actual examples, it will be easier to see the difference between situations where it can be used and situations where it is difficult to use.
In actual investing, we start by observing the period of bottoming out, without rushing for a reversal. However, we cannot overlook the fact that it is easy to let go of a product because it cannot bear the boredom of the bottom price range.
In this article, I will explain the three-day ceiling and the one-hundred-day bottom not as "knowledge" but as steps to check before buying or selling. Don't rush to conclusions, read according to your financial amount and time horizon.
First, divide it into three days at the top and 100 days at the bottom.
When looking at the top three days and the bottom hundred days, first determine what you want to judge. The information you need will change depending on whether you want to know the meaning, confirm before buying or selling, or review your current holdings.
Especially for beginners in investing, the easier the words are, the more they tend to take them as a conclusion. Three days at the top and 100 days at the bottom are not enough to make a decision. If you want to check it, it is more realistic to look at it in conjunction with fund management, holding period, and opposing materials.
Consider the example of three days at the top and 100 days at the bottom.
If we look at the ceiling of three days and the bottom of 100 days as an example, first of all we have a narrow premise. It is important not to mix up whether you are talking about the market as a whole, individual stocks, NISA or long-term funds.
Checking the following points will make things a lot easier.
| Axis to check | What to see in 3 days at the top and 100 days at the bottom |
|---|---|
| purpose | What do you use to judge? |
| Time axis | Which is closer to short-term trading, long-term holding, or NISA? |
| basis | Which one is more important: price, business performance, interest rates, exchange rates, or psychology? |
| risk | When things go the other way, where should you look again? |
| action | Will it lead to buying, selling, or doing nothing? |
Points that can easily cause trouble in making decisions
It's not only when you don't have enough knowledge that you stumble at the top of three days and the bottom of 100 days. In fact, there are situations where we interpret something conveniently because we know a little bit about it.
- Focus on one scene where the top 3 days and bottom 100 days work well.
- Even if the price movements are similar, if the background is different, they are treated as different things.
- View not only successes but also failures using the same criteria.
- Check if you can reproduce it with your own amount of funds
The important thing here is not to settle on a single correct answer based on the three days at the top and the one hundred days at the bottom. In investment, the meaning of the same material changes depending on the market, holding period, and amount of funds. When in doubt, prioritize confirmation over conclusion.
Checklist before buying and selling
Before using the top three days and bottom 100 days as the basis for your actual judgment, check at least these five things.
- Can you explain in one sentence the purpose of looking at the top three days and the bottom hundred days?
- Have you confirmed one or more countermeasures or failure conditions?
- Are you investing your living funds or money that will be used soon?
- Have you decided in advance the criteria for cutting losses, taking profits, and continuing to hold stocks?
- Are you making judgments based only on social media or short headlines?
Checklists are simple, but they prevent you from adding reasons after making a decision. The purpose of checking the ceiling of 3 days and the bottom of 100 days is not to speed up action, but to reduce unnecessary judgment errors.
Summary
The three-day ceiling and the one-hundred-day bottom are materials for organizing your investment decisions. Even if you read it as an example, your judgment will be inaccurate if you treat it as a standalone buy/sell signal.
The points to keep in mind are as follows.
- Decide in advance the purpose of looking at the top three days and the bottom hundred days.
- Do not mix time axis and amount of funds
- Check not only good materials but also negative materials
- When using NISA and long-term funds, consider how to handle losses
- When in doubt, reduce your position or postpone it.
The more knowledge you have, the safer it seems, but in the market it can become dangerous if you use it incorrectly. It is realistic to treat the terms 3 days at the top and 100 days at the bottom not as words that force you to make a hasty decision, but as a tool to pause before buying or selling.