WR indicator description

The William Overbought and Oversold Index (WMS%R or W%R) is an indicator proposed by Larry William in 1973 to analyze the short-term buying and selling sentiment of the market. Its principle is the same as the KD line, which reflects the strength and weakness of the market as well as overbought and oversold phenomena by analyzing the relationship between the highest price, lowest price and closing price within a period of time. It is a technical indicator that analyzes the short-term buying and selling trends of the market.

Parameter settings:

The William Index cycle is generally 26 days. If it is too short, it will be too sensitive; in this system, if the average number of days of the William Index is set, the William Index can also be displayed The average line can filter the small bands that are sensitive to the William Index and help identify the main trend.

Application rules:

1. The William Index is drawn with 0 as the upper limit and 100 as the lower limit. When the William Index line is higher than 80, the market is in an oversold state and the market is about to bottom out. The horizontal line of 80 is generally called the sell line.

2. When the William Index line is below 20, the market is in an oversold state and the market is about to peak. The horizontal line of 20 is generally called the "buy line."

3. Used in conjunction with the relative strength index, giving full play to their complementary functions in judging the strength of the market and overbought and oversold phenomena, a more accurate judgment on the direction of the market can be obtained.

4. The William Index is used in conjunction with the momentum indicator to confirm the peaks and troughs of stock prices within the stock market cycle in the same period.

5. Using the William Index as a market testing tool makes it neither easy to miss the big market trends nor easy to get stuck in high price areas. However, because this indicator is too sensitive, during the operation, it is best to combine it with relatively gentle indicators such as the relative strength index to judge.

6. 50 is the median line of the William Index. When the William Index breaks above the median line upwards, it indicates that the buyer’s power has increased and you can consider buying. When the William Index falls below the median line, you should consider buying. Sell.

The KDJ indicator is also called the stochastic indicator. It was first proposed as a fairly novel and practical technical analysis indicator. It was first used in the analysis of the futures market, and later was widely used in the short- and medium-term trends of the stock market. Analysis is the most commonly used technical analysis tool in the futures and stock markets.

KDJ stochastic indicator responds more sensitively and quickly, and is a better technical indicator for analyzing and judging short, medium and long-term trend bands. Generally speaking, for those who make large funds and large bands, they usually gradually enter the market to absorb when the KDJ value of the month is at a low level; the main force usually focuses on the position of the weekly KDJ when operating, and makes judgments on the cycle high and low points of the midline band, so it often appears The unilateral pattern causes the repeated passivation of daily KDJ; daily KDJ is extremely sensitive to the direction of stock price changes and is an important method for daily trading in and out; for short-term traders doing small bands, 30-minute and 60-minute KDJ are important Reference indicators; for investors who have designated buying and selling plans to place orders immediately, 5-minute and 15-minute KDJ can provide the best entry and exit times.

The commonly used default parameter of KDJ is 9. As far as my personal experience is concerned, short-term users can change the parameter to 5, which not only makes the response more agile and accurate, but also reduces the passivation phenomenon. The commonly used KDJ The parameters are 5, 9, 19, 36, 45, 73, etc. In actual combat, different cycles should be analyzed comprehensively, and the short, medium and long-term trends will be clear at a glance. If the phenomenon of oscillations in different cycles occurs, it means that the reliability of the trend has increased. The main principles for practical research and judgment of KDJ indicators are the following four points:

1) The K line is a quick confirmation line - a value above 90 is overbought, and a value below 10 is oversold;

The D line is a slow main line - a value above 80 is overbought, a value below 20 is oversold;

The J line is a direction-sensitive line. When the J value is greater than 100, especially For more than five consecutive days, the stock price will at least form a short-term top. On the contrary, when the J value is less than 0, especially for more than several consecutive days, the stock price will at least form a short-term bottom.

2) When the K value gradually becomes larger than the D value, the graph shows that the K line crosses the D line from below, indicating that the current trend is upward, so the K line breaks through the D line upward on the graph. When, it is a buying signal.

In actual combat, when the K and D lines cross upward below 20, the short-term buying signal at this time is more accurate; if the K value is below 50, if the K value crosses the D value twice in succession from bottom to top, When a "W bottom" pattern is formed with the right bottom higher than the left bottom, the stock price may rise considerably in the future.

3) When the K value gradually becomes smaller than the D value, the graph shows that the K line crosses the D line from above, indicating that the current trend is downward, so the K line breaks through downward on the graph. When line D is reached, it is a sell signal.

In actual combat, when the K and D lines cross downward above 80, the short-term selling signal is more accurate at this time; if the K value is above 50, it crosses the D value twice in succession from top to bottom. , when forming an "M head" pattern with the right head lower than the left head, the stock price may fall considerably in the future.

4) It is also a very practical method to judge the top and bottom of the stock price through the divergence between KDJ and stock price:

A) If the stock price reaches a new high, but the KD value does not reach a new high, it is the top If there is a divergence, you should sell;

B) The stock price has reached a new low, but the KD value has not reached a new low. This is a bottom divergence, so you should buy;

C) The stock price has not reached a new high, but the KD value has not reached a new low. The value reaches a new high, which is a divergence from the top, and should be sold;

D) The stock price does not reach a new low, but the KD value reaches a new low, which is a divergence from the bottom, and one should buy;

Things to note It is a method to determine the KDJ top-bottom divergence. It can only be compared with the KD value at the high and low points of the previous wave, and cannot be compared by jumping over it.

4. Application experience:

1) In actual operation, some short-term traders often use minute indicators to judge the market outlook and determine the timing of buying and selling. In the T+0 era, 15 is commonly used. Minute and 30-minute KDJ indicators, in the T+1 era, 30-minute and 60-minute KDJ are mostly used to guide entry and exit. Several empirical rules are summarized as follows:

A) If the 30-minute KDJ consolidates below 20 for a long time, and the same is true for the 60-minute KDJ, once the 30-minute K value crosses the D value and crosses 20, it may cause A rebound market that lasts for more than 2 days; if the daily KDJ indicator also occurs a golden cross at a low level, it may be an intermediate market. However, it should be noted that after the golden cross between the K value and the D value, this crossover will only be effective if the K value is greater than the D value by more than 20%;

B) If KDJ turns downward above 80 in 30 minutes, the K value will fall. Crossing the D value and falling below 80, while the 60-minute KDJ has just crossed 20 and is less than 50, it means that the market will retrace its steps. After the 30-minute KDJ bottoms out, it may continue to rise;

C) If 30 The minute and 60-minute KDJ are above 80. After a long period of consolidation, the K value crosses the D value downward at the same time, indicating that a downward adjustment for at least 2 days will begin;

D) If the 30-minute KDJ falls When the KDJ is below 20 and then turns upward, but the 60-minute KDJ is still above 50, it is necessary to observe whether the 60-minute K value will effectively cross the D value (the K value is 20% greater than the D value). If it is effective, it indicates that a new upward attack will begin. ; If it is invalid, it means that it is just a rebound in the process of falling, and it will continue to fall after the rebound;

E) If the 30-minute KDJ stops falling before 50, and the 60-minute KDJ has just crossed upward, it means that the market situation It may continue to rise, but it is only a retracement at present;

F) The 30-minute or 60-minute KDJ divergence phenomenon can also be used as a basis for judging the top and bottom of the market. For details, see the previous discussion of daily divergence. ;

G) In a super strong market, the 30-minute KDJ can reach more than 90, and invalid crossovers occur repeatedly at high levels. At this time, focus on the 60-minute KDJ. When the 60-minute KDJ crosses downward, It may trigger a short-term deeper retracement;

H) During the plummeting process, the 30-minute KDJ can be close to 0, but the general trend is still falling. At this time, you should also look at the 60-minute KDJ. When the 60-minute KDJ When an effective crossover occurs upward, it will trigger a very strong rebound.

2) When the market is in an extremely strong or extremely weak unilateral market, and the daily KDJ is repeatedly passivated, medium and long-term indicators such as MACD should be used instead; when the stock price fluctuates violently in the short term and the daily KDJ reaction lags behind, the medium and long-term indicators such as MACD should be used instead. Use CCI, ROC and other indicators instead; or use the SLOWKD slow indicator;

3) KDJ parameters in the weekly line generally use 5. The bottom and top of the weekly KDJ indicator have obvious prompting effects. According to This band operation can save you a lot of hard work and strive to maximize profits. It should be noted that generally the weekly J value rises in the oversold zone with a V-shaped single bottom, indicating that it is only a rebound market and the formation of a double bottom is a reliable intermediate market; but the J value There is also the possibility of a sharp decline at a single top in the overbought zone, so we should be more vigilant. At this time, we should combine other indicators for comprehensive analysis; but when the stock market is in a bull market, after the J value is in the overbought zone for a period of time, the stock price will still rise significantly.

The most commonly used technical indicators in the current market are KDJ and MACD indicators. The KDJ indicator is a leading indicator and is mostly used for short-term operations; MACD, also known as the smoothed moving average of similarity and difference, is the dispersion value of the average market cost and generally reflects the overall trend of the midline. Theoretically, the lead of the KDJ indicator is mainly reflected in the speed of reflection of the stock price. Near 80, it is a strong overbought zone, and the stock price has certain risks; 50 is a wandering zone; near 20, it is a relatively safe zone and belongs to the speculation zone. It is possible to open a position, but due to its fast speed, it often causes more mistakes in frequent buy and sell signals; because the MACD indicator basically moves in sync with the market price, the requirements and restrictions for sending signals increase, thereby avoiding false signals. Appear. The advantage of combining the two to judge the market is that you can more accurately grasp the short-term buying and selling signals of the KDJ indicator. At the same time, due to the midline trend reflected by the characteristics of the MACD indicator, the use of two indicators will be able to determine the medium and short-term fluctuations of stock prices.

When MACD maintains its original direction and the KDJ indicator is in an overbought or oversold state, the stock price will still run according to the established trend. Therefore, in terms of operation, investors can use this to judge whether the market is adjusting or reversing. At the same time, they can also appropriately avoid short-term adjustment risks to gain short-term differences.

Observing the stock, the current sideways adjustment has come to an end. It can be seen that MACD is still maintaining its original upward trend, and the KDJ indicator has also been adjusted to form a golden cross above 50, indicating that the stock price will rise in the short term. There is still a chance for it to rise again. In general, for the judgment of short-term trends, the buying and selling signals sent by KDJ need to be verified by MACD. Once both send the same order, the buying and selling accuracy will be higher.

CCI (Commodity Channel Index) Chinese name: trend indicator. This indicator was created by Donald Lambert. It specifically measures whether the stock price has exceeded the normal distribution range? It is a special kind of overbought and oversold indicators. It fluctuates between positive infinity and negative infinity. However, it does not need to use 0 as the central axis. This is also the same as the indicator that fluctuates between positive infinity and negative infinity. different. However, every overbought and oversold indicator has an "antenna" and a "ground wire." Except for the indicator with 50 as the central axis, the antenna and ground wire are 80 and 20 respectively, the antennas and ground wires of other overbought and oversold indicators are The position of the ground line must be different depending on different markets and different stock characteristics. The antenna and ground line of the CCI indicator are 100 and -100 respectively. This is not only a unique insight of the original author, but also has a significant meaning. It is also very different from the antenna ground lines of other overbought and oversold indicators. Readers must have a good understanding of its principles in order to make a comprehensive and complete application of CCI and the BOLLINGER BANDS and ROC indicators introduced below.

What is the overbought and oversold indicator? As the name suggests, "overbought" means that the buyer's ability has been exceeded, and the number of people buying the stock exceeds a certain proportion. Then, according to the "anti-mass psychology", the stock should be sold in the opposite direction at this time. "Oversold" means that the seller has oversold the stock. When the number of people selling the stock exceeds a certain proportion, the stock should be bought instead. This is the anti-market and anti-mass theory that is often the most valued under normal market conditions. However, if the market is unusually strong, the overbought and oversold indicators will suddenly lose direction, the market will continue to advance, and the masses seem to have lost control. For this disordered behavior of stock prices, the CCI indicator provides different perspective view.

According to the principle of wave theory, the stock price moves forward in 5 waves, and when it reaches the final 5th wave stage, whether it is an upward wave or a downward wave, it is the time when the market fluctuates the most fiercely and violently. , the masses went crazy without reason, and the stock price accelerated to complete the largest fluctuation in a very short period of time. Some investors want to buy and sell stocks within the safest range. However, for some investors who are more adventurous and gambling, they would rather choose to intervene in a fast and profitable market in a high-risk environment. In this kind of In the market, bet quickly and escape quickly! It can make people gamble happily and give investors with strong gambling a sense of pleasure of cutting through the mess with a quick knife. If the overbought and oversold indicator, which ranges from 0 to 100, is specifically designed for normal market conditions, then the CCI indicator is specifically designed to deal with extreme market conditions. In other words, under normal market conditions, the CCI indicator will not have any effect. , when the CCI scans for abnormal stock price fluctuations, the fighter jets immediately take off to fight, and they strive for a quick battle. The victory or defeat will be determined immediately. Even if the bet is lost, they must speed up and escape immediately!

Attention! The "antenna" of CCI is ten, 100, and the "ground" is -100. This range may also change slightly due to changes in the characteristics of individual stocks. This depends on readers' careful observation and addition or subtraction. However, in general, the difference will not be too big. big.

Research and judgment method:

1. The zero line of the CCI index corresponds to the midline of the price channel. The CCI value is above the zero line, that is, the price is running above the center line of the channel, and the market is strong; conversely, if the channel index is running below the zero line, it indicates that the market is weak;

2. CCI value If it is too far away from the zero line, you should pay attention to whether the market is overbought or oversold. Depending on the parameters set, the values ??of overbought and oversold are also different. Generally speaking, CCI crossing the zero line can be regarded as a buying and selling signal.

3. When CCI breaks through the +100 antenna from the normal area of ??+100---100 from bottom to top, it is an opportunity to seize the opportunity.

4. When CCI falls from above the +10 0 antenna and below the antenna from top to bottom, it is an opportunity to accelerate the escape.

5. When CCI falls from the normal zone of +100--100 and breaks below the -100 ground line from top to bottom, it is an opportunity to short sell.

6. When CCI breaks through the -100 ground line from below -100 from bottom to top, short sellers who have hit the bottom line should call back the stock as soon as possible to cover their purchases.

Blind Spot

1. When CCI falls below the -100 ground line, you cannot engage in "securities lending and short selling" in the Chinese stock market.

2. When CCI breaks through the ground line from below the -100 ground line from bottom to top, you cannot engage in "securities lending and covering" buying in the Chinese stock market.

Solution

1. When CCI is still fluctuating within the normal range, you have already bought stocks based on the signals of other indicators. At this time, if CCI falls below -100 Ground line, you can use it as a sell signal to sell your holdings.

2. When CCI breaks below the -100 ground line and breaks through the ground line from bottom to top, it is originally just a "short covering" action. We can regard it as a short-term buying signal.

Attention! The above 2 cracking methods have poor results.

If you are used to taking risks and like to survive in a fierce and war-torn environment, then the CCI indicator is a good choice for you!