Part I: Definition of trend.

1, the definition of the trend

Trend refers to the direction of price change (or movement) in a specific period. The direction of the trend can be divided into three types: upward trend, downward trend and horizontal consolidation (also called no trend).

1, the upward trend, in a certain period of time, the market price continued to break through the previous wave of high points and hit a new high, but in the process of callback, it did not fall below the previous wave of low points, which is the upward trend. Both the high point and the low point are rising, as shown in the figure:

2. The downward trend. In a certain period of time, the market price keeps falling below the low point of the last wave, hitting a new low, but it can't rise to the high point of the last wave during the rebound, which is the downward trend. Both the high point and the low point are falling, as shown in the figure:

Step 3 arrange horizontally

In a certain period of time, the market price can't break through the high point of the previous wave, and then it can't fall below the low point of the previous wave, so the process that has been maintained is horizontal finishing, which neither breaks the box finishing of the previous high nor the previous low. As shown in the figure:

2. Trend trading

Trend trading is to follow the trend and execute the buying plan in the rising trend; In the downward trend, execute the selling plan.

Why do you want to trade with the trend? Theoretically, it is because in the process of trend movement, the profit space ratio of homeopathic trading and contrarian trading is different. Trading is a game for profit. There are gains and losses, and it is impossible to win every battle. But to strive to make a small loss and make a big profit is to exchange a smaller (loss) space for a larger (profit) space.

Only when you trade with the trend and follow the trend will you make a big profit. China stock market, you can only do more, not short. Only by buying at the low end of the rising trend and selling at the high end of the rising wave can we make a profit. In the downward trend, the profit of rebound is limited and the risk is great. In order to protect the capital, trading is not encouraged. Trend trading method is a technical method to study the turning point of trend and participate in trading effectively.

Chapter two: the judgment of trend inflection point

Section 1 Trend Line

Trend line is one of the most effective tools to analyze trends. Drawing the uptrend line and downtrend line correctly is the key factor to decide whether you are trading with the trend or against the market.

There are many ways to draw a trend line, but there are two things that everyone agrees with:

1, the trend line should reflect the price trend as accurately as possible, that is, it must follow the essence of Dow theory-the definition of trend;

2. The trend line is of reference value to the actual transaction and can help realize profit in the transaction process.

It is found that few people can accurately draw the trend line on the chart, because the definition of the trend line is vague and arbitrary.

1, uptrend line

Correct drawing: connect the lowest point (or relative low point) in a certain period of time with any low point before the highest point, without a straight line passing through any price. As shown in the figure:

2. Downward trend line

Correct drawing: a straight line connecting the highest point (or relative high point) and any high point before the lowest point in a certain period of time without passing through any price. As shown in the figure:

Section II: Principles of Drawing Trend Line

1, the uptrend line cannot connect the points after the highest point; The downtrend line cannot connect the points after the lowest point.

2. The price cannot cross the drawn trend line.

3. There should be a certain time span between the two selected points, and the two connection points should not be biased towards the lowest point or the highest point.

4. The trend line should be as parallel as possible to the central axis of the upward or downward trend.

Section 3: inflection point and inflection point line

The concept of inflection point comes from channel theory. Any upward trend or downward trend can be assumed as small channel operation, and the price operation trend is limited to two parallel lines. To grasp the trend of the market, we should always pay attention to the turning point of the market-the inflection point.

The inflection point refers to the turning point of the trend change. The inflection point line can be understood as the upper rail and the lower rail of the channel. The inflection point line allows the preset trend to run to the position of the line, which is convenient for buying and selling. The principle of drawing inflection point line is: to find it, draw it first; To find it, draw it first.

1, inflection point line of upward trend:

In the upward trend, in order to find the downward sorting target, according to the principle of "to find it, draw it first", draw an extension line on the upper side of the upward channel, and then translate it to the lower side of the channel to get parallel lines, which is the inflection point line.

The extension line is the connecting line between the two outermost points of the trend. This line should be as parallel as possible to the trend center line, and it is not an extension line if it is not parallel. In short, the direction and angle of the trend can be seen by the eyes as a whole. The trend is a "band" with a certain width. The edge of this belt is framed by two parallel lines, which are channel lines, that is, extension lines and inflection points. Draw an extension line first, and the parallel lines pushed horizontally behind it are called inflection points.

Epitaxial line

Inflexion line inflection point

In order to find the upper selling target position of the rising trend, according to the principle of "to find it, draw it first", first draw the extension line of the lower rail of the lower channel, and then translate the parallel line to the upper position to get the inflection point line, and the trend price will move to the vicinity of the inflection point line.

Inflexion point of inflexion line (target position)

Epitaxial line

The following is an example (Shanghai Composite Index):

2. Inflexion line of downward trend

The same is true of the descending channel, so I won't give an example of the inflection point line.

Section iv: demarcation point a

In the trend judgment, the demarcation point A plays an important role. If this judgment is wrong, it will make you misjudge the trend, or go out late or enter late. So, let's learn to master the definition of demarcation point A.

The cut-off point refers to the high (low) point of the last wave of adjustment when the price breaks through the trend line and inflection point line.

After the price breaks through the trend line and inflection point line, if it can't continue to break through the demarcation point A, it will turn around and enter the adjustment, and determine that the trend is horizontal shock; If we continue to break through the demarcation point A, the trend will change. This understanding comes from a large number of statistical results.

Chapter III: Main Waves and Adjustment Waves

No matter how the wave theory defines the wave shape, it is nothing more than dividing the wave-like operation of the trend into two types: main wave and adjustment wave. The main wave is a relatively large price movement in the same direction as the trend. Adjustment wave is a price movement that is opposite to or transverse to the trend.

Section 1 Main waves and adjustment waves of downward trend

The main wave of the downward trend is called the main downward wave, and its direction is the same as the downward trend, and its angle is greater than the trend angle. The adjustment wave of the downward trend is called rebound, and its direction is opposite or horizontal to the trend.

Main waves and adjustment waves of upward trend in the second quarter

The main wave of the upward trend is called the main upward wave, and its direction is the same as the upward trend, and its angle is larger than the upward trend.

The adjustment wave of the upward trend is called callback, and its direction is opposite or transverse to the upward trend.

Chapter 4: Trading and Stop-loss Point of Trend Trading.

Trend trading is to follow suit. In China stock market, you can only do more, that is, you can only buy first and then sell. Therefore, to follow the trend, only when there is an upward trend, do stocks, and the downward trend is a short break.

The first section talks about long line, middle line and short line.

In trend trading, it is considered that long-term refers to the whole long-term upward trend, which generally lasts 1 to 2 years; The median line refers to the main rising wave in the long-term upward trend, which lasts for 2 weeks to 2 months; Short-term refers to the main rising wave in the medium-term upward trend, which lasts for several days to two weeks. It should be noted that the division of time can not be rigidly stipulated, but should be divided according to the actual trend. Take the following actual chart as an example:

Determination of buying point in the second quarter

Whether it is a long line, a middle line or a short line, the method of determining the buying point is the same, but the wave level is different.

After learning to distinguish between main rising waves and adjusting waves, you can learn to find buying points and selling points. Buying at the end of the upward adjustment wave is the point where the adjustment wave is taken as the downward trend line and the price breaks through this line. Example diagram:

The arrow in the figure is where the adjusted rise breaks through the adjustment trend line, and here is the buying point. By using the method of getting on and off the track, that is, the extension line and inflection point line, the approximate location of the buying point can be obtained. The turning point near the inflection point line is easy to form the real adjustment end point.

The small downward trend line in the above picture is the trend line of adjusting waves. When the price breaks through this line, the market may continue to adjust in a small sideways way, or it may run upward into the main rising wave. However, when the price breaks through the demarcation point (that is, when it hits a new high), it can be judged that the adjustment market is over and it begins to enter the main rising wave.

Looking for a lower point of purchase:

Look for a lower buying point, draw an inflection point line with the method of "look for it, draw it first", adjust it to be close to the inflection point line and buy it at the corner. This point is relatively low.

As shown in the figure:

When the market runs to this position, if you want to find a good buying point, you must first draw the upper extension line (upper channel rail), and then push the parallel lines down to the bottom K line to get the parallel channel line (inflection point line):

In this way, you can be prepared to buy when you are close to the inflection point. After that, the market is as follows:

Determination of selling points in the third quarter

In the downward trend, when the market falls below the demarcation point, it means that the decline can be recognized. Then, set the selling point when it falls below the demarcation point. If we want to find a higher band selling point in the rising trend, we also use the inflection point line to find it. According to the principle of "draw first if you want to find it", draw the extension line first, and then push the parallel line upward to get the inflection point line. Sell when the market rises near the inflection point and then turns around and goes down.

But, to be honest, the selling point is really hard to find. It can be decided according to the situation of individual stocks. Generally speaking, if the K-line rises sharply after buying, it is far from the original trend line, and the angle is large, and it can be sold when the head is turned down after pulling up. If the rising slope of individual stocks is not large, it oscillates upward slightly, then the method of breaking the demarcation point is used: the method of breaking the demarcation point is especially suitable for medium and long-term operation. Short-term is to be a band. With the profit and the shortening of the first day of MACD red column, it will sell higher.

Setting of stop loss point

Setting a stop loss point is an important means to control risks. In the uptrend, this stop loss point should be the support point below a channel. This support point may be the low point of the callback after a small fluctuation in the uptrend or the low point of the adjustment wave. If you buy at a point after the adjustment wave ends, the stop loss point is set at the lowest point of the adjustment wave; If you buy at the end of the callback after a wave on the way to the main surge, the stop loss point is set at the lowest point of the callback before the highest wave.

In the picture, buy at point B, and the stop loss point is set at point A, the lowest point of the adjustment wave. If you buy at point D and the stop-loss point is set at the callback low point before the highest wave at that time, then point C is the stop-loss point.

Stop-loss point moves up: When the price reaches a new high after buying, the stop-loss point will move up to the callback low before this new high. Keep hitting new highs and keep moving up the stop loss point in the same way.

Chapter V Fund Management and Risk Control

Fund management is the most important item in stocks, and it occupies the most important seat in my trend trading method. When the stop-loss point is set, fund management is the most effective way to control risks.

To know that stock trading is the probability of speculation, no method can be 100% successful. So we should put risk control in the first place. Any beautiful buy point will still fall after buying it. Therefore, capital preservation is the foundation of stock trading. Stock trading is not about how to win, but about how to lose the least when you lose. Fund management is an effective way to protect capital. Only when capital is guaranteed, and risks are fixed and controlled, will profits come uninvited. This experience has set a successful example for world-class speculators. You can check online, so I won't say much here.

My trend trading method adopts teacher Lu Xiwu's trend identification and judgment. As for fund management, the risk control methods of most successful speculators in the world are adopted, such as Aird's fund management method.

2% and 6% principles of Aird fund management;

1.2% principle

For each transaction, 2% of the total capital must be taken as the maximum loss. If the stock price falls instead of rising after this purchase, the loss will only account for 2% of the total capital at most.

For example, the total capital is 654.38+10,000 yuan, of which 2% is 2,000 yuan, and the biggest loss when trading losses occur is only 2,000 yuan.

2% as risk money, the number of shares bought is calculated, not bought casually.

Number of shares purchased = total capital × 2%/ (purchase price-stop loss price)

For example, if the total capital is 6,543,800 yuan, the purchase price is 654.38+ 00 yuan, and the stop loss price is 9.5 yuan, then:

100000× 2%/(10-9.5) = 4000 shares.

The actual purchase is slightly less than 4000 shares because the trading commission has to be paid.

10 yuan bought, and the price fell to 9.5 yuan's stop loss, with a loss of 2,000 yuan for 4,000 shares in 0.5 yuan.

2.6% principle

6% means that the maximum monthly loss is 6% of the total funds. If this value is reached, the operation will stop this month and be authorized next month.

Every month 1 day, 6% of the total funds of last month must be calculated, and what is the loss of 6% of the total funds, and the results should be recorded. If the total capital is 100000 yuan, 6% is 6000 yuan. Then, when the total capital loss reaches 94,000 yuan (100,000-6,000 yuan), the position must be closed, and the stop loss must be stopped this month before the operation can be resumed next month.

Strictly enforce discipline and find that losers have their own reasons. Although successful people have their own different methods, what they have in common is strict discipline. Therefore, if you want to be a winner, you must enforce discipline.

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The content is quoted from:

Lu xiwu's trend trading rule