Generally speaking, the Brin channel line consists of three track lines, namely, the upper track line, the middle track line and the lower track line. However, if the switching parameter is set to 1, the graph will be represented by four lines, in which the upper rail line and the lower rail line are located at the outermost side of the channel, which are the pressure line (rising line) and the support line (falling line) of this trend respectively. The middle one, the middle rail, is the average price line. In most cases, the price always runs in a belt-shaped interval composed of upper and lower tracks, and the position of the track is automatically adjusted with the change of the price. The range of price change can be seen from the width of the band. The wider the band, the greater the price change.
Similar to RSI and other technical indicators, bollinger bands evaluate the strength of trends according to the position of prices in bollinger bands. When the price line is above the middle rail of the bollinger band, the trend is strong; When it is below the middle of the bollinger band, the trend is bearish. The two poles of the Brin channel are the upper rail and the lower rail, which means extremely strong and extremely weak.
1, when the stock price crosses the upper pressure line, it is a selling point signal;
2. When the stock price crosses the support line below, it is a buy signal;
3. When the stock price crosses the midline from bottom to top, it is an overweight signal;
4. When the stock price crosses the midline from top to bottom, it is a selling signal;
5. When the stock price crosses the "upper limit", it will form a short-term retracement, which is a short-term selling opportunity;
6. When the stock price crosses the "lower limit", it will form a short-term rebound, which is a short-term buying opportunity;
7. When the band-shaped area of the bollinger Band moves horizontally, it can be regarded as being in the "normal range". At this time, with the method of 5 and 6, the reliability is quite high. If the banded area moves to the upper right or lower right, it is abnormal and has special significance;
8. When the band narrows, fierce price fluctuations may occur at any time. After a period of violent fluctuations, the stock price will gradually tend to be flat, and the strength of both long and short sides needs to be reconsidered, sorted out and wrestled. When both sides are hesitant, the fluctuation of stock price becomes more and more dull, which makes the "upper limit" and "lower limit" of Bollinger Band closer and narrower. This situation is "the calm before the storm", so be careful.
The main theoretical principles of Bollinger Bands are as follows:
1, when the price crosses the downward line from bottom to top, it can be regarded as a buy signal;
2. When the price crosses the midline from bottom to top, it may accelerate upward, which is a signal to increase the position and buy;
3. When the price fluctuates between the middle line and the upward line, it is a bull market and can be held or increased;
4. After the price runs between the midline and the uplink for a long time, it falls below the midline from top to bottom, which is a selling signal;
5. When the price fluctuates downward between the midline and the downtrend, it is a short market and can be thrown out.
In actual combat, investors need to master some operational skills:
1, when the price has been rising steadily along the upper rail of the Brin channel, the strong feature is particularly obvious. It is suggested that the middle rail should be taken as the low absorption point, the middle rail should be taken as the important stop loss line, and the 4, 9 and 18 moving average system should be used as a reference.
2. If the price breaks through the upper rail of Brin for 3 days or rushes out of the upper rail too much, the volume and position cannot be continuously enlarged, so be alert to the callback to confirm the risk. On the contrary, when the price falls out of the lower rail of Brin, it is more active to change hands. With the continuous enlargement of trading volume and positions, prices are always hovering, which is likely to form a staged bottom.
2-day rule: Jobling middle rail flattens after a long-term sharp decline, or flattens after a callback in the rebound, and there is an upward inflection point, and the price is stable above the middle rail within 2 days, so multiple single interventions can be considered.
10% principle: if the price runs above the middle rail, the opening of the bollinger band will gradually narrow, that is, the upper rail, the middle rail and the lower rail will gradually approach. When the numerical difference between the upper rail and the lower rail is close to 10% (daily line), it is the best buying opportunity. If the volume and positions are obviously enlarged at this time, the signal of price breakthrough is more clear. Narrowing the bollinger band is a signal to start the market, and enlarging the opening again is the best time to overweight.