Some people will pay attention to the trend of different stocks in the stock market, and the role of trend line in the stock market can not be ignored. But many people don't know what a trend line is. The so-called trend line is actually that the stock price rises or falls along a certain trend in a certain period of time. The following is a collection of trendline meanings. What is the function of 202 1_ trend line? I hope I can help you.
What is a trend line?
Trend line is a line used by technical analysts to draw the past price trend of securities (stocks) or commodity futures. The purpose is to predict future price changes. This straight line is formed by connecting the highest or lowest price points of securities or commodity futures rising or falling in a certain period of time. The angle of the final straight line will indicate whether the securities or commodity futures are in an upward trend or a downward trend.
The function of trend line
It is understood that the trend line is the internal operating law of the stock development direction and will not be transferred because of the will and behavior of stock investors. Therefore, it is a wise choice to follow the trend of stock investment. Under normal circumstances, once the downward trend is formed, stocks have to fall. Similarly, once the upward trend is formed, stocks will continue to rise.
What is the role of the trend line in the stock market? One is that the trend line has a certain inhibitory effect on the volatility of the stock market. The other is that once the trend line is broken, the next trend of the stock price will develop in the opposite direction. Generally speaking, the more effectively the trend line is broken, the higher the reliability of stock price reverse fluctuation.
How to use trend line indicators
When the stock price is on the rise, the line connecting its lowest point is almost a straight line. The lowest point of the stock price decline almost invariably falls on this line and rebounds, while the connection of its highest point is almost a straight line when the stock price is in a downward trend, and the highest point of the stock price rebound almost invariably touches this line and falls back.
In other words, the ups and downs of the stock market are composed of a series of ripples, the bottoms of which form a straight line obliquely upward, while the decline of the stock market is also composed of a series of ripples, but the tops of which form a straight line obliquely downward.
Therefore, we need to understand the usage and operation of trend line indicators, because this is very critical. It should also be noted that when drawing the trend line, try to draw different test lines. After the stock price changes for a period of time, we will keep the verified trend line that accurately reflects the fluctuation trend and has analytical significance. I hope I can help you!
Trend line analysis
Support line and pressure line are mutually transformed.
The support line and pressure line in the trend line can be transformed into each other. When the stock price breaks through a support line from top to bottom, the original support line is likely to become a pressure line. At a certain moment, we can find that the stock price runs between two parallel trend lines, the upper line is the pressure line and the lower line is the support line. This situation is called box finishing. Trend lines often need to be used in conjunction with volume. When the stock price breaks through the pressure line from bottom to top, it often needs large volume support. Without the support of volume and market background, it is often a false breakthrough. The angle of the trend line is very important. Generally speaking, the trend line with an inclination angle of 45 is the most meaningful, stable and lasting. Too gentle upward trend line indicates that the output is not enough and it is not easy to produce a big market immediately; The steep uptrend line shows that the stock price will not last long if it rises too fast, and it is often easy to change the trend angle quickly, and adjust the angle of the uptrend line to the vicinity of line 45, but it is not a trend reversal. So is the downtrend line.