The slow-moving car crash, which is the Chinese stock market, may have passed unnoticed among Western traders and investors, states Ian Murphy of

All eyes appear to be focused on the Middle East, the US market’s all-time highs, and the Republican primary in New Hampshire. But luckily for you, we cast a broad gaze here at Murphy Trading, and what we see is not pleasant! When writing the Chinese version of Way of the Trader, extensive work and backtesting was carried out to create a Help Strategy for Chinese stocks, so we are not strangers to that market. The CSI300 index of stocks listed on the mainland exchanges has fallen over 42% since January 2021, and the Hong Kong market is off more than 50% over the same period.


On the weekly charts above the carnage is evident but an exit based on a close below the -1ATR line (my preferred Weekly Trend Following exit point) would have repeatedly sidestepped the decline even if an investor re-entered on reaction rallies as highlighted by the arrows.

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