1. Long-cycle patterns are more important than short-cycle patterns

Short-cycle trends move in a relatively small range and are easily affected by various factors. And change at any time. Therefore, it is difficult for investors to grasp the short-term trend of crude oil prices, and it is easy for investors to get lost in the many influencing factors.

If you have a thorough understanding of the long-term trend before analyzing the short-term crude oil price trend, and be confident, then investors can overlook the short-term trend, grasp the main contradiction, and make a correct analysis. judge. Use long-term cycles to look at trends, such as using daily lines to look at big trends, and 5-minute or 15-minute short-term intraday periods.

2. Position is more important than form

If you study technical analysis in depth, you will find that technical analysis has irrefutable rules. But if these laws are not analyzed in conjunction with position and form, then these laws will become castles in the air and have no meaning.

For example, the "head and shoulders bottom" pattern is a very classic bottom reversal pattern. It usually appears in the bottom area of ??crude oil prices, but if a "head and shoulders bottom" pattern appears in the high price area of ??crude oil prices, , then mature investors would rather withdraw from the market and wait and see, rather than believe in this form.

Because "the top is most likely to appear at a high level, and the bottom is most likely to appear at a low level" is the simplest and most effective investment rule. Place an order below the resistance line and above the support line, and place the stop loss below the strong support line (long), or above the resistance line (short)

3. Market direction is more important than position

"The level of crude oil prices is not important, the trend of crude oil prices is the most important." Maybe the price of crude oil has reached a very high or very low area, but as long as investors can accurately judge the trend of crude oil prices, they can still buy or hold it.

The most important and difficult thing for investors to analyze is to analyze the market trend. For short-term investment, the timing of entry has no necessary relationship with the level of crude oil prices. Compared with the high fluctuations in crude oil prices, crude oil prices will still rise in the next cycle, and you can still go long instead of short because of high crude oil prices.

4. Market behavior contains all information

The phrase "market behavior contains all information" forms the cornerstone of technical analysis. Unless the importance of this first premise is fully understood and accepted, the other premises will have little meaning.

What all technical analysts are really arguing for is that crude oil price behavior should reflect changes in supply and demand. If demand is greater than supply, prices should rise. If supply is greater than demand, prices should fall. This behavior is the basis of all economic forecasts and fundamental forecasts.

So, technical analysts turn this sentence around and conclude that if prices are rising, then demand must exceed supply for whatever specific reason, and the fundamentals must be bullish. If the price is bearish, then the fundamentals must be bearish and the market is correct.

5. Technical analysis predictions and fundamental analysis predictions

Technical analysis mainly studies market behavior, while fundamental analysis focuses on the economic forces of supply and demand that cause prices to rise, fall, or remain flat. Fundamental analysis examines all relevant factors that affect market prices to determine the market's intrinsic value.

Intrinsic value is the actual value of something as indicated by the fundamentals of the laws of supply and demand. If this intrinsic value is lower than the current market price, then the market price is too high and it should be sold. If the market price is lower than the intrinsic value, then the market is undervalued and you should buy.

Both market forecasting methods attempt to solve the same problem, namely determining the direction in which prices are likely to move. They just attack the problem from different directions. Fundamental analysts study the causes of market movements, while technical analysts study their consequences.

6. Prices move in a trend

The concept of trend is absolutely necessary for technical analysis. The whole purpose of charting a market's price action is to identify trends in their early stages so that you can trade with them.