The capital flow index (MFI) is a technical index to measure the speed of capital investment and recovery from the market. The construction and interpretation of this index is similar to the relative strength index, but the only difference is that the transaction volume is very important to the capital flow index.

When we analyze the capital flow index, we must consider the following points:

1. Deviation between indicators and price changes. If the price goes up and the indicator goes down (and vice versa), the price is likely to change.

2. If the capital flow index value exceeds 80 or is lower than 20, it can indicate the potential upward or downward trend of the market respectively.

Moving average summary/separation indicator (MACD)

The moving average summary/separation indicator is the second market trend that the moving average of two prices follows the dynamic indicator. Correlation of lines.

The technical index of moving average aggregation/separation is the difference (EMA) between 26 segments and 12 segments. The so-called signal curve (the 9-segment moving average of the indicator) will make a trajectory movement on the technical indicator chart of the moving average summary/separation in order to clearly show the trading opportunity.

In the turbulent market, the index chart has proved to be very effective. There are three common ways to use this indicator: crossing, overbought and oversold conditions and separation.

Intersection: The most basic MACD trading rule is to sell when the index is lower than the signal curve. Similarly, when the index is higher than the signal curve, a buy signal is generated. When the MACD index fluctuates around zero, it is recommended to buy or sell.

Overbought and oversold conditions: MACD chart is very useful as an indicator of overbought and oversold. When the short-term moving average deviates greatly from the long-term moving average (MACD indicator rises), the market price may be excessively inflated and may return to a more practical level soon.

Separation: when the MACD index is separated from the market, it means that the moment when the current trend is coming to an end is coming. When the EMA summary/separation index reaches a new high, the separation of cattle will occur, and the price has not yet reached a new high. When the EMA summary/separation index hit a new low, the separation of short-selling power occurred, and the price did not hit a new low at this time. When these two kinds of separation occur in the case of overbought and oversold, their significance is very significant.

Relative strength index

The technical index of relative strength index (RSI) is to pursue the price of shock index, and the range of this shock index is 0- 100. When Wilder introduced this index, he suggested using the RSI index of 14 days. Since he put forward this suggestion, it has become very common for people to use RSI indicators of 9 days and 25 days.

The most common way to analyze RSI index is: we should look for such separation. At that point, the market price was a new high, but the RSI index did not exceed its previous height. This separation means an upcoming opposite trend. When the RSI index began to reverse at that time and fell to a recent low, people called it "failure swing", which was regarded as the confirmation of the upcoming opposite trend.

The method of chart analysis using RSI index

Top and bottom: RSI usually rises above 70 or falls below 30. Before the price chart is formed, this indicator will generally form such a top and bottom trend.

Chart formation: RSI indicators generally form chart forms such as head, shoulder and triangle, which may not be seen on the price chart.

Failure swing (support or resistance, explosion and penetration): At this time, RSI indicators will generally exceed the previous high point (peak) or fall to the next low point (trough).

Support level or resistance level: RSI indicator is more clear than the price itself when expressing support level or resistance level.

Separation: As mentioned above, when the price level reaches a new high (low), but the trend of this new high (low) is not confirmed by RSI indicators, separation will occur. Prices are usually revised and moved in the direction of RSI indicators.

Random oscillation index

The technical index of random shock compares the correlation between the price range and market value of securities prices in a certain period. The oscillation index is displayed by double lines. The main line is called %K line, and the second line is called %D line, whose value is the moving average of the main line %K, which is usually shown as a fixed curve, while the %D line is shown as a point curve.

There are many ways to explain this shock index, and three of them are common:

When the volatility index (%K or %D) falls below a certain level (such as 20) and then rises above that level, we can buy. When the index rises above a certain level (such as 80) and then falls below that level, we can sell it.

We can buy when the %K curve is higher than the %D curve, or sell when the %K curve is lower than the %D curve.

Find the separation point. For example, when the price keeps hitting new highs and the stochastic volatility index fails to break through the previous high.