In the stock market, changes in the strength of buyers and sellers will affect the changes in the stock price index. The highest and lowest points of the stock price on that day basically reflected the strength of both long and short sides. DMI index is a practical technical index that tries to reflect this trend, including upward trend line +di, downward trend line -di, moving average ADX and estimated value ADXR of ADX.
When analyzing DMI, we should not only combine all internal indicators, but also combine other external indicators to make judgments.
The rising and falling ranges of DI are all between 0- 100, and many forces are strong. The value of +DI is enlarged, approaching 100, and the stock index may continue to rise. If the short-term strength is strong, and the value of -DI is enlarged and approaches-100, the stock index will continue to fall. If +di becomes smaller and approaches 0, it reflects that the kinetic energy of many parties is weakened and the stock index will stop rising and falling respectively. Investors can find out the strength of both long and short sides according to the changing trend of +DI and -DI.
All kinds of investment indicators are the summary of people's years of experience, and most of them have been verified in actual operation, so we can't generalize and add to the negative. Of course, we can't follow the cat. How to comprehensively use various indicators for analysis needs to be verified in actual combat.
RSI Relative Strength Index (RSI) was first used in futures trading. Later, it was found that using this index to guide stock market investment was also very effective, and the characteristics of this index were constantly summarized. Now, RSI has become one of the most widely used technical indicators for investors. According to the general principle of investment, investors' buying and selling behavior is a reflection of the comprehensive results of various factors, and the change of the market ultimately depends on the relationship between supply and demand, while the RSI index is based on the principle of balance between supply and demand, by measuring the total range of stock price rise in a certain period.
The percentage of the average value of the total range of price changes is used to evaluate the strength of long and short forces, and then the specific operation is prompted. On the surface, the application rules of RSI are complicated, including the judgment principles of intersection, value, shape and deviation. However, because RSI contains the judgment methods of almost all commonly used indicators, it will be helpful for investors to understand and apply other technical indicators if they can fully grasp the application rules of RSI.
Regarding the use of RSI, we should first observe the positional relationship between two or more curves with different parameters.
The RSI curves with different parameters are used in exactly the same way as the moving average. If the short-term RSI curve with smaller parameters is above the long-term RSI curve with larger parameters, then the current market is a bull market. On the contrary, it is a short market. Because the larger the parameters, the larger the time range of RSI calculation, so the conclusion will be more reliable. But like EMA system, we can't avoid the shortcoming of slow response, so we should pay attention to it during use.
Secondly, judge the operation direction according to the RSI value.
The RSI value divides the range from 0 to 100 into four regions: extremely weak, weak, strong and extremely strong. The dividing line between "strong" and "weak" is 50, but the boundaries between "extremely weak" and "strong" and "extremely strong" will change with the change of RSI parameters. The division of regions is different with different parameters. Generally speaking, the larger the parameter, the closer the dividing line is to the center line 50 and the farther it is from l00 and 0. However, it should generally be in the range of15,30 to 70,85. If the RSI value exceeds 50, it means that the market has entered a strong market and can consider buying. However, if it continues to enter the "extremely strong" area, it is necessary to consider the extremes meet and prepare to sell. Similarly, if the RSI value is below 50, if it enters the "extremely weak" area, it means that it is oversold and should wait for an opportunity to buy.
Thirdly, the shape of RSI curve is analyzed.
When RSI curve forms head-shoulder top shape or multiple top (bottom) shape in high or low position, trading operation can be considered. The farther these patterns appear from the 50-axis, the higher the reliability of the signal and the less likely to make mistakes. All conventional K-line morphological analysis methods are suitable for the analysis of RSI curves. For example, the trend line on the K-line chart can also be used on RSI. The high and low points of RSI curve in rising and falling can be connected into a trend line, which also plays the role of support and pressure line. Once it is broken, you can refer to the K-line analysis method to judge whether the previous trend is over.
Finally, judging the market from the deviation between RSI and stock price. Among all kinds of methods to judge RSI, the deviation between RSI and stock price is the most reliable method to judge the market. In the process of stock price rising, if RSI is at a high level, but it does not follow the stock price to form a higher high point, this shows that the stock price may have entered the final stage, and the top deviation is a relatively clear selling signal. The opposite of this situation is the bottom deviation. The RSI low level slowly rose. Although the stock price is still falling, RSI is no longer hitting a new low. At this time, it means that the decline has come to an end, and you can consider opening a position at an appropriate time.