Secondly, it is the percentage principle. It requires the closing price to exceed the reference price by 3% (of course, 3% is only a general situation), and different varieties can choose different minimum price fluctuation allowable values, but at least it must exceed 2%.
Finally, the principle of time. In order to confirm the effective breakthrough of the trend line, the market must keep the closing price on the same side of the line for three consecutive days. Of course, some people think that the futures market can only go for two days.
Although the above principle is reliable, it will take a long time. After the breakthrough confirmation, the market has often gone a long way, and the cost of investors entering the market at this time is also very high. Practical or should learn to distinguish some cheating practices, the author's personal practical experience, summarized as follows:
The first is to deviate from the general trend.
Generally speaking, when the overall market trend is in the stage of adjustment, rebound or horizontal consolidation, it is more likely that individual contracts will have a breakthrough in volume or a false breakthrough; When the general trend is relatively clear, there is a greater possibility of a real breakthrough in individual contracts. Investors should make a comprehensive judgment based on fundamentals, historical capital involvement, current price position and main operating habits. Pay special attention to the downward breakthrough in low-priced areas and the upward breakthrough in high-priced areas.
Secondly, it deviates from quantity and energy.
As far as my experience is concerned, when the price breaks through, the volume of transactions should increase correspondingly with the direction of market trends, which is an important clue to verify whether all price patterns are completed. Any form should be accompanied by a significant increase in trading volume when it is completed, but at the top of the form and early in the reversal process, trading volume is not so important. Once the bear market comes, the market is used to "falling because of its own weight".
Investors certainly want to see more active trading activities while prices are falling, but this is not the key in the process of falling. However, in the process of bottom reversal, the corresponding expansion of trading volume is absolutely necessary.
If there is no obvious increase in trading volume when the price breaks upward, then the reliability of the whole price pattern is questionable.
Third, deviate from the K-line pattern.
Take the price breakthrough as an example. When the price breaks through, it often closes in the Dayang line. However, with the shrinking of trading volume, the price will be stagflation, and the K-line will also have a cross star and a small Yin and a small Yang shape. When the turnover shrinks rapidly, the price will be adjusted accordingly, and a negative line will appear on the K-line. In this way, in the K-line form, there are some short-term K-line combinations, such as Twilight Star, Tower Top, Covered Big Yinxian and so on. Investors should combine the spatio-temporal econometric theory with the principle that short-term trends obey the medium and long term, small trends obey the big trend, and small forms obey the big pattern, so as to integrate short-term trends into the long-term trend pattern.
Finally, it deviates from other analytical tools such as moving average system.