When the short position of the moving average changes and the stock price is at a low level, there is a heavy volume; When the stock price falls, a moving average plays a strong supporting role, and the shape of the moving average gradually changes into a bullish shape.
Exit point: whether it is EMA trading system or not, as long as the market deviates greatly from its own expectations, it can be out.
Investors often need to rely on various technical indicators, technical forms and investment theories to judge the short-term trend and medium-and long-term trend of stock prices, so as to make operational decisions of buying, selling or continuing to wait and see. As an auxiliary tool for stock operation and decision-making, these technical indicators are absolutely indispensable for everyone to win the stock market.
In all technical indicators and technical forms, the moving average system plays the most important role in guiding stock operation. And its biggest function is to judge the trend of stock price rise and fall. This trend includes short-term, medium-term and medium-term, and the longer the cycle, the higher the accuracy.
With it, we can completely ignore the temporary ups and downs of the stock price, including daily, weekly, monthly, quarterly or even half a year, because it can tell us the long-term ups and downs of the stock price, no matter how the stock price fluctuates in the short term, it can't change the long-term trend! It is no exaggeration to say that as long as the moving average system is used well, the return on investment will be guaranteed.
Average system is generally composed of short-term average, medium-term average and long-term average. Different stock trading software gives different moving average cycles. As shown in the figure, the default moving averages provided by stock trading software are 5-day moving averages, 10 moving averages and 30-day moving averages. According to the length of periodic parameters, EMAs can be divided into short-term EMAs, medium-term EMAs and long-term EMAs.
The most commonly used short-term moving averages are the 5-day moving average and the 10 moving average, which represent the average price of one week or two weeks respectively. The short-term moving average reveals the short-term shock of the market, and investors can use it as a basis for short-term trading.
20th, 30th and 60th are the most commonly used calculation cycles in the medium-term moving average, and the 20th moving average represents the average stock price of one month (4 weeks), which is often used for short-term operation. The fluctuation of 30-day moving average and 60-day moving average (seasonal line) is more stable, which can point out the medium-term fluctuation direction of the market and is an important basis for investors' mid-line operation.