The mathematical expression of Gann line has two basic elements, price and time. Gann combines price and time perfectly through Gann Circle, Gann Spiral Square, Gann Hexagon and Gann "Wheel in Wheel". In Gann's theory, seven is a very important number. Gann often uses "seven" or multiples of "seven" when dividing the market cycle. Gann believes that "Seven" combines the concepts of nature, astronomy and religion.
Gann line is an important concept of Gann theory and investment method. Gann establishes time on the X axis and price on the Y axis, and the symbol of Gann line is represented by "TXP". The basic ratio of Gann line is 1: 1, that is, a unit time corresponds to a price unit, and the Gann line at this time is 45 degrees. Through the analysis of the market, Gann is divided into three or eight shares, such as 1/3, 1/8 and so on. These Gann lines constitute the support position and resistance position of the market callback or rise.
Through Gann theory, we can accurately predict the trend and fluctuation of market prices and become the winners of the stock market.
First, Gann's wave law and * * * vibration.
In World War I, a group of German soldiers walked neatly across a bridge, and the bridge collapsed. As far as the bearing capacity of the bridge itself is concerned, it is far greater than the weight of German soldiers. However, due to the soldiers' pace adjustment and the same rhythm, the bridge collapsed under the action of this Qi Li, which is the role of * * * vibration. * * * Vibration is often used in the field of sound. When there is a multiple relationship between short frequency and long frequency, it will produce * * * vibration.
Gann's thinking is that the volatility or internal periodicity of the market comes from the multiple relationship between market time and price. When there is a multiple relationship between the internal fluctuation frequency of the market and the driving force frequency of the external market, the market will have a * * * vibration relationship, which will have a huge upward or downward effect on the market.
Looking back at the historical trend, we can find that the stock trend often fluctuates greatly. Once you start from a low position, you will have an upward breakthrough, and the stock price is like a runaway wild horse. Once it breaks through the high level, the stock price is like a river that breaks its banks. This is the reflection of the * * * shock in the stock market.
* * * Demand can generate potential, and once this potential is generated, the upward and downward force is great. Can trigger people's emotions and operational behavior, resulting in a one-sided situation. When it rises, people are in high spirits and flock to the market; Downward, everyone panicked, and the stock price plummeted, just like the end of the world, which Gann called a price crash.
Therefore, a stock investor should pay full attention to the * * * vibration phenomenon. * * * vibration may be caused by the following conditions:
1. When long-term investors, medium-term investors and short-term investors buy or sell in the same direction at the same time, there will be upward or downward * * * vibration;
2. When the long period, the medium period and the short period in the time period meet at the same time point with the same direction, the time point when an upward or downward earthquake will occur;
3. When the long-term moving average, the medium-term moving average and the short-term moving average meet at the same price and have the same aspects, the price will vibrate up or down;
4. When various technical indicators such as K-line system, moving average system, trading volume KDJ indicator, MACD indicator, and bollinger band indicator all send out buying or selling signals, * * * vibration points of technical analysis indicators will be generated;
5, when the financial policy, fiscal policy, economic policy and other policies are consistent, there will be a policy shock point;
6. When the fundamental and technical directions are the same, a great vibration point will be generated;
7. When the fundamentals, operation, management, financial status and cycle of a listed company are in the same direction, it will produce * * * vibration points for this listed company.
* * * Vibration can not happen at any time, but there are conditions. When these conditions are met, it can produce * * * vibration; When the conditions are not met, * * vibration will not occur; When certain conditions are met, it will also produce * * * vibration, but the impact is small; When the conditions of * * * vibration are met, the greater the power of * * * vibration. Many times, many conditions have been met, but the * * * vibration has not occurred, which can be understood as everything is ready, except the east wind. Dongfeng is the key condition for not blowing and not burning. If there are no key conditions, there will be no * * vibration, and Gann particularly emphasizes the power of nature at this point.
As we know, every year in June 18 of the lunar calendar, there will be a spring tide in Qiantang River, which is caused by the gravity of the moon. Only when the sun, the moon and the earth are in a line will this spring tide happen, which is also a kind of vibration. Since the positions of the sun, the moon and the earth can cause spring tides, can their positions also affect people's operating emotions and behaviors? Gann's answer is yes.
In a word, * * * vibration is an important factor that causes the stock price to fluctuate greatly, and investors can consider it from the relationship between short-term frequency, medium-term frequency, long-term frequency and their multiples. Gann also believes that the external factors of the market come from the natural cycle and the time period of the earth's seasonal changes. * * * Earthquake is a kind of resultant force, which is a force that many forces push in the same direction at the same time. Once investors find this point, they will get huge profits and avoid huge risks.
Second, Gann's wave law and Gann's division ratio
Gann's wave law contains a wide range of contents, but Gann did not give a clear definition of wave law when he was alive, which also caused the analysts who studied Gann's theory to have different understandings of wave law in the future. Peter, a musician and speculator, once wrote an article to explain the law of fluctuation from the perspective of music theory. Peter believes that Gann's theory and music theory come down in one continuous line, and they are both different understandings of the law of fluctuation. The basic structure of syllables consists of seven scales. The * * * earthquakes of magnitude 7 are C and G, and the high degree C is 10% and 1 time. That is to say, if the scale produces * * * earthquakes in the form of one-half, one-third, one-quarter and one-eighth, then one, two, four and eight times the frequency will produce * * * earthquakes. The above ratios and multiples are closely related to Gann's wave law, which is Gann's division ratio.
Gann's division ratio is based on 8, that is, Gann's division ratio is 50% (half), followed by 25% (one quarter) and 75% (three quarters), followed by one eighth, three eighths, five eighths and seven eighths. When we study the trend chart of Shenzhen and Shanghai stock markets, we can find a large number of practical examples to prove the effectiveness of Gann's split ratio. Let's take a look at the legend of the weekly chart of the Shanghai Composite Index. 19921October 20th 165438+ weekly chart of the stock index closed at 40 1 point. After a rise of 13 weeks, 1993 rose to 19 in February, and the weekly closing index was 1499.7 points, with an increase of 1 100 points. This week, the stock index peaked at 1558, and then began to fall, reaching 93 after six weeks of decline. Through the above example, we can understand the importance of Gann's 50% segmentation rate.
Gann's experience is summed up from American stock market and futures market, but this conclusion is also applicable to China stock market. Gann's wave law and division ratio are not limited to a specific region. It is a natural law, which is a law that people naturally follow in the process of trading. It is a reflection of people's fixed habits, which will not be easily broken. If a pair of soldiers want to go from place A to place B, they need to rest halfway because of the long journey. Then the rest place is likely to be 50% of the total distance. Another example is that a person works eight hours a day, so his working hours are generally four hours in the morning and four hours in the afternoon. Let's look at the weekly chart of the Shanghai Composite Index. From1July 29th, 994 to1February, 99517th, the Shanghai Composite Index ran for 28 trading weeks, from 333 to 6544. It rose for seven weeks in a row and fell to 533 points after 2 1 week. The rising time accounts for a quarter (25%) and the falling time accounts for three quarters (75%). 25% and 75% are the division proportions that Gann attaches great importance to.
Gann's wave law emphasizes the multiple relationship and fractional relationship of the split ratio, which can be transformed into each other, depending on the value we take. For example, if a dealer wants to make stocks of 4.00 yuan and 8.00 yuan, then the increase from 4 yuan to 8 yuan is 100% to1; And 6.00 yuan is a 50% increase; 5.00 yuan is 25% of the increase; 7.00 yuan is 75% of the increase; Therefore, these positions are all positions that Gann should pay attention to in the division ratio. If we take 4.00 yuan to 5.00 yuan and take the increase of 1.00 yuan as the increase in the first stage, then 2 yuan will rise to 6.00 yuan and 4 yuan will rise to 8.00 yuan. It is the multiple relationship of the first rise 1 yuan emphasized by Gann's wave law. The multiple relationship can be infinitely expanded and the fractional relationship can be infinitely reduced. The key is to choose the value of 1. It's like the moon goes around the earth, the earth goes around the sun, there are nuclei in the atoms, and there are smaller particles in the nuclei. Infinitely reduced. When we understand the importance of this multiple relationship and fractional relationship, we can use it to build a market framework. When the units of time and price are moving towards this multiple relationship and fractional relationship, the inflection point of the market may have arrived. There will naturally be support and resistance in price and resistance in time. Starting from the important low position of the market, calculate the growth level of one-half, one-quarter and one-eighth, and the position of one, two, four and eight times will probably become an important support and resistance. In the low region, the trend is often resisted by one eighth, with small fluctuation and long time. In the low region, the trend is often resisted by one eighth, with small fluctuation, long time and repeated trend. Once an effective breakthrough is made, the resistance decreases and the trend is clear. At the important high point of the market, calculating the positions of half, one-third, one-quarter and one-eighth is often an important support for adjustment. It is an important support and resistance to divide the range of stock index or stock price from important low point to high point into eight parts. For the time period, a circular 360 degree can be regarded as the unit of the market time period, which is divided into 1/2, 1/4, 1/8 and 180 degrees.