Composition of chip distribution:
1. Position cost: refers to the price when investors buy stocks. In the chip distribution chart, different colors or bar charts are usually used to represent the cost of holding positions at different prices.
2. Number of positions: refers to the number of shares held by investors at a certain price. In the chip distribution chart, the horizontal axis usually represents the price, and the vertical axis represents the number of positions.
Interpretation of the chip distribution map:
1. Dense area: When the cost of a large number of investors' positions is concentrated in a certain price range, a dense area is formed. Dense areas reflect the balance of power within the market and can help investors judge the direction and sustainability of the trend.
2. Support level and resistance level: when the stock price falls back to the dense area, it will often be supported; When the stock price rises to a dense area, it is often resisted. Therefore, dense areas can be used as an important reference for investors to set buying and selling prices.
3. Divergent state: When the stock price breaks through the dense area upward or downward, the chip distribution map will change from dense state to divergent state. This change indicates that the market trend may change and investors need to pay close attention to it.
Skills of chip distribution analysis:
1. Combining chip distribution analysis with other technical indicators (such as moving average, trading volume, K-line shape, etc.) can improve the accuracy of analysis.
2. Pay attention to hot spots and individual stocks: In hot spots and individual stocks, the change of chip distribution is often more obvious, which can help investors grasp investment opportunities.
3. beware of false information: false information in the market may lead investors to misjudge the distribution of chips, thus affecting investment decisions. Therefore, investors should pay attention to official information and analyze it carefully.
In a word, chip distribution is a useful technical analysis tool, which can help investors to understand the strength of internal market forces, so as to better grasp the trading opportunity and formulate investment strategies. However, it should be noted that chip distribution analysis is not a panacea. When using this tool, investors should combine other technical indicators and pay attention to market dynamics to reduce investment risks.