In the real operation, we can analyze the price trend in the later period and predict the trend development direction of the stock market by combining the operation form of the price trend ADX indicator line +DI and the operation form of the -DI indicator line.
When there is a wave of rapid rise of individual stocks in a relatively low-level area, at this time, if the ADX indicator line hits a new high in stages and the +DI indicator line shows a rapid rise pattern, it indicates that the market bulls have sufficient kinetic energy and individual stocks have a strong upward momentum, which is a signal that prices will continue to rise in the later period, and it is also a sign that the upward trend will appear or continue to run.
In fact, it is very simple to use ADX index, that is, to observe the changes of +DI, -DI and ADX lines, and the signals are clear and reliable. It is an important index to judge the top and bottom, with high accuracy, and is suitable for friends in the medium and long term. ADX medium and long-term forecast is more accurate.
ADX index principle
ADX index is a technical index to analyze the change of equilibrium point between buyers and sellers in the process of market ups and downs, that is, the change of strength between long and short sides is affected by price fluctuations and goes through a cyclical process from equilibrium to imbalance, thus providing a basis for judging the trend.
How to use ADX index in practice?
First, when the value of ADX in the ADX indicator is lower than the value of +DI, especially lower than 20, the buy and sell signals displayed by all indicators are invalid signals. In addition, when the value of ADXR is between 20 and 25, any indicator should also be disabled. Therefore, before using various indicators, it is very necessary to use ADX trend indicators to judge the running trend of stock prices. The real significance of defining the failure zone of technical indicators in this way is that the stock price has entered a meager profit consolidation with unknown trend at this time. Because the direction of the breakthrough in the market outlook is unclear, the strategy adopted is: non-shareholders should not intervene; Those who make profits by holding shares can withdraw from the wait-and-see first; If the shareholding is locked, it is necessary to set a stop loss position. Once the stock price falls below, short it immediately and cover it after the stock price stabilizes.
Second, the typical characteristics of ADX trend indicators are the turning point that indicates the trend market. ADX in the ADX indicator turns downward when it is above 50, which generally means that the trend of stock price's continuous operation turns. At this point, such as+di > -DI, the stock price peaked and fell back; Such as+di >; -DI indicates that the stock price shows signs of stopping falling and stabilizing (note: there may not be a big rebound). Usually, when ADX falls from a height, it will drop to about 20, but in special cases, ADX only drops to 40-60, and then rises again. This situation is called mid-air flip, which is often a precursor to the big market. This kind of situation often appears in some big dark horse shares, which rises sharply, in the dish washing stage before rising. At this time, it is difficult to judge only by ADX index, and it must be judged by combining the moving average system and the moving average. Such as+di > -DI and ADX sell stocks at the turning point above 50. After flipping in the air, they can be a reflective chase in ADX & gtADXR. So as not to miss the subsequent big market.
Thirdly, ADX indicators are usually not used to directly guide transactions, but only as a tool to judge trends. If you must use it to guide trading, you can buy when you wear -DI on +D and sell when you wear -DI on +DI. If you miss this trading point, you can go to ADX> to check it out; ADXR point provides the last chance.
Fourthly, when the ADX trend indicator shows that the stock price peaks periodically, it is superior to any other indicator. The specific operation principle is: using the 60-minute K-line chart, when the ADX of the ADX indicator turns 65, the stock is sold, and the stock price drops slightly at this time, which is the closest to the highest point. For example, the ADX of the K-line chart has turned above 65, and the stock price has fallen a little, but this is the last chance. Choosing the 60-minute K-line indicator as the basis for selling is in line with the principle of selling quickly and not escaping from the top.
The above content is compiled by the wealth manager. What is the relationship between the market ups and downs analyzed by ADX-ray? For the above content, I believe that everyone should have a certain understanding of the rise and fall of the ADX-ray analysis market. There are risks in the stock market, so we must be cautious in stock selection, especially for beginners, and we must know more about the technical analysis indicators of stocks.