The theory of entanglement and consolidation is a technical analysis method, which is often used to judge the reversal point of stock price trend. This paper will introduce in detail the judgment method of consolidation and divergence of entanglement theory. The article will include the following five sub-headings: what is the entanglement consolidation divergence, the method of judging entanglement consolidation, the method of judging divergence, how to make trading decisions by combining entanglement consolidation and divergence, and the limitations of entanglement consolidation divergence. What is the theory of entanglement?

Entanglement theory is a well-known theoretical system of technical analysis of the stock market in China, which was founded by the theory of entanglement and Zen. The theory of entanglement holds that the trend of stocks will have certain regularity, and the price will form a series of consolidation in the process of rising or falling. Backstepping refers to the inconsistency between the price trend and technical indicators, which is often used to predict the reversal point of stock prices. The theory of binding, consolidation and divergence is to judge the price reversal point by analyzing the consolidation form and divergence phenomenon of stocks. The method of judging the consolidation of entanglement theory

The method of judging the consolidation of entanglement theory is mainly analyzed by observing the K-line diagram and related technical indicators. In the upward trend, consolidation is often manifested as a sideways region with small stock price fluctuation, and the K-line pattern shows certain rules during this period. For example, the consolidation in the upward trend is often manifested as shrinkage consolidation, that is, the trading volume is gradually decreasing; The consolidation in the downward trend may be manifested as volume consolidation, that is, the trading volume gradually increases. At the same time, it can also be combined with technical indicators such as moving average and relative strength indicators to confirm the consolidation pattern. The method of judging backsliding

The method of judging backsliding is mainly to analyze the inconsistency between the stock price trend and technical indicators. In the upward trend, the price is often reflected in a new high or a new low, while the corresponding technical indicators are not. For example, in the process of stock price rising, the relative strength index decreases, which can be regarded as a divergence signal. At the same time, you can also observe the top or bottom shapes in the K-line diagram, such as double top and double bottom, to judge the existence of divergence. How to make a trading decision by combining the theory of entanglement with the theory of divergence

When making a trading decision by combining the theory of entanglement with the theory of divergence, it is necessary to comprehensively consider the signals of these two factors. When judging the stock price reversal, we should first determine the possible consolidation area by binding theory consolidation, and then observe whether there is a divergence signal to confirm the possibility of reversal. If the signals of entanglement consolidation and divergence confirm each other, then we can consider the corresponding trading operation. Limitations of the theory of entanglement and consolidation

As a technical analysis method, the theory of entanglement and consolidation has certain application value in stock trading, but it also has some limitations. The judgment of the theory of entanglement and consolidation requires high analytical ability and experience, which is difficult for beginners. The theory of entanglement, consolidation and divergence is only a reference means, and it cannot completely predict the future stock trend. There may also be misjudgments in the judgment results of entanglement consolidation and divergence, which need to be treated with caution.

In stock trading, the theory of entanglement, consolidation and divergence is a commonly used technical analysis method, which can help investors make trading decisions by judging the consolidation form and divergence phenomenon. Investors should pay attention to its limitations when using this method, and make a comprehensive judgment by combining other technical indicators and fundamental analysis. Only on the basis of sufficient market research and personal judgment can we make better use of the theory of entanglement to guide trading operations.