Studying this brewing period and its forecasting significance is the problem to be solved in the price pattern. So, what is the price model? Price form is a specific form or pattern on the stock or futures price chart, which has predictive value and can be classified.

② There are two types of morphology: reverse transformation type and persistent type.

There are two main price forms-anti-transformation form and sustainable form. The reversal pattern is worthy of the name, which means that the trend is undergoing an important reversal; On the contrary, the continuous pattern indicates that the market is likely to take a break and adjust the recent overbought or oversold situation, and then the existing trend will continue to develop. The key is to identify the types as early as possible in the process of morphological formation.

Trading volume plays an important role in verifying all price patterns. When the situation is unknown, it is a decisive method to judge whether the current price model is reliable to study the transaction volume model associated with price data. Most price forms have their own specific calculation skills, which can determine the lowest price target. Although these targets are only approximate estimates of the next market trend, they still help investors to determine their return-risk ratio.

③ Persistent form

Persistent forms include triangles, flags and pennants, wedges and rectangles. This pattern usually reflects that emerging trends are in a state of rest, rather than the reversal of trends. Therefore, it is usually classified as medium or secondary form, rather than the main form.

(4), the reverse form

The reversal forms include one-day (two-day) reversal, compound head-shoulder top type, triple top (bottom), double top (bottom), head-shoulder bottom, head-shoulder top and dome. This pattern usually indicates the end of old trends and the formation of new trends. It is very important for trend traders to identify the reversal pattern. Once there is a reversal pattern, the trend trader should immediately make a decision to reverse the transaction.

(5) Basic elements shared by reverse forms.

I. Necessity of the original trend

The existence of market trends is the premise of the existence of all reverse forms. The market must have a clear trend to reverse. Occasionally, there are some numbers that are similar to reverse patterns on the chart, but if there is no trend in advance, then there is nothing to reverse it, so its significance is limited. In the process of pattern recognition, it is the key to success to correctly grasp the overall structure of the trend and be alert to the most likely stage of some patterns. It is precisely because the reversal pattern must have a trend that it can be reversed in advance, and it is meaningful to measure it. Most measurement techniques only give the lowest price target. So, what is the biggest goal of reversal? It is the starting point of transcendental trend and its end point is to return to its starting point. If there has been a big bull market in the market and the main reversal pattern has been completed, it shows that the biggest space for price downward is to withdraw the whole bull market 100%.

Two. Breakthrough of important trend lines

The upcoming reversal process is usually before breaking through the important trend line. However, my friends, please remember that the breakthrough of the main trend line does not necessarily mean the reversal of the trend. The significance of this signal itself is that the original trend is changing. After the main uptrend line is broken, it may mean that a horizontally extending price pattern begins to appear. Later, with the further development of the situation, it can be confirmed whether this pattern is anti-transformation or continuous. In some cases, the main trend line is broken and the price model is completed synchronously.

Three. The bigger the form, the greater the market action that follows.

The so-called scale here is in terms of the height and width of the price form. Height indicates the intensity of morphological fluctuation, while width indicates the time required for morphological development and completion. The larger the scale of the form-that is, the greater the amplitude (height) of price fluctuation and the longer the time (width)-the more important the form is, and the greater the space for price change will follow.

Four. The difference between top and bottom

Compared with the bottom shape, the "top" lasts shorter, but fluctuates more. In the top form, the price fluctuation is not only greater, but also more intense, and its formation time is shorter. The bottom shape usually has a small price fluctuation, but it takes a long time. Therefore, it is usually easier to identify and capture the bottom of the market than the top. Losses are also reduced accordingly. However, for friends who like "top", there is still a little comfort, that is, prices usually tend to fall fast and rise slowly, so the top shape, although difficult to deal with, has its own attraction. Usually, investors can make a quick profit by seizing the selling opportunity in a bear market than by seizing the buying opportunity in a bull market. In fact, everything is a balance between risk and reward. Higher risks are compensated by higher returns, and vice versa. Although the top shape is difficult to capture, it also has more profit potential.

Verb (abbreviation of verb) volume is more important in verifying the upward breakthrough signal.

Generally speaking, the trading volume should increase along the direction of market trend, which is an important clue to verify whether all price patterns are completed. When any form is completed, it should be accompanied by a sharp increase in trading volume. However, in the early days of the top reversal of the trend, the volume of transactions is not so important. Once the bear market sneaked in, the market became accustomed to "falling because of its own weight". Chart analysts certainly want to see more active trading activities when prices fall, but this is not the key in the process of top reversal. However, in the process of bottom reversal, the corresponding expansion of trading volume is absolutely necessary. If there is no obvious growth trend in the volume pattern when the price breaks upward, then the reliability of the whole price pattern is questionable.