The movement of parallel lines has a certain lag effect. When the current exchange rate begins to fall, the moving parallel line will still go up, and when the exchange rate drops significantly, the moving parallel line will go down. In order to make up for this defect, we can set several moving parallel lines on different calculation days to understand the overall running trend of exchange rate from different periods.
According to the length of time, mergers and acquisitions can be divided into short-term, medium-term and long-term. Comprehensive observation of long, medium and short-term moving parallel lines can judge the multiple tendencies of the market. If the parallel lines of the three movements rise side by side. The market is long: if it falls side by side, the market is short.
Horses have the characteristics of helping to rise when they rise and helping to fall when they fall. The exchange rate broke through the moving average from below, and the moving average began to move up, which can be regarded as the support line of bulls. When the exchange rate falls back to the moving average, it will be supported, which is the opportunity to make more orders. This is the characteristic of the moving average. After the exchange rate rises or falls slowly, the moving average will slow down. When the exchange rate returns to the vicinity of the moving average, the moving average has lost its characteristics of boosting. At this time, it is time to short the order. MACD is called convergence and divergence of moving average. It is developed from the double moving average, and the meaning of MACD is basically the same as that of the double moving average, but it is easier to read.
When MACD turns from negative to positive, it is a buy signal. When MACD turns from positive to negative, it is a signal to sell. When the MACD changes at a large angle, it means that the gap between the fast moving average and the slow moving average expands very quickly, which represents the change of the market trend. MACD was put forward by Geral Appel in 1979. A technical index that uses the aggregation and separation between the short-term (usually 12) moving average and the long-term (usually 26) moving average to judge the trading opportunity.
Application principle
In the existing technical analysis software, the commonly used parameters of MACD are fast smma 12 and slow smma 26. In addition, MACD has an auxiliary indicator bar. In most technical analysis softwares, columnar lines are colored, green below axis 0 and red above axis 0. The former represents weakness, while the latter represents strength.
Let's talk about the basic principles that should be followed when using MACD indicators:
1. When the DIF and DEA are above the 0 axis, it is a bull market, and when the DIF line crosses the DEA line from bottom to top, it is a buy signal. When the DIF line crosses the DEA line from top to bottom, if the two lines are still running above the 0 axis, it can only be regarded as a short-term decline, and the trend inflection point cannot be determined. Whether to sell or not at this time needs to be judged by combining other indicators.
2. When the DIF and DEA are below the 0 axis, it is a short market. When the DIF line crosses the DEA line from top to bottom, it is a sell signal. When the DIF line crosses the DEA line from bottom to top, if the two lines are still running below the 0-axis, it can only be regarded as a short-term rebound, but the inflection point of the trend cannot be determined. At this time, whether to buy or not needs to be judged by combining other indicators.
3. Columnar line contraction and amplification. Generally speaking, the continuous contraction of columnar lines indicates that the strength of trend operation is gradually weakening. When the color of the column line changes, the trend determines the turning point. However, when using some short-term MACD indicators, this view cannot be fully established.
4. Form and deviation. MACD indicators also emphasize morphology and deviation. When the DIF line and MACD line of MACD indicators form a high bearish pattern, such as head and shoulders, double heads, etc. We should be vigilant; When the morphological MACD indicator DIF line and MACD line form a low bullish pattern, you should consider buying. When judging the shape, DIF line is the main one and MACD line is the auxiliary one. When the price continues to rise and MACD indicators come out one after another, it means that the top deviation appears, indicating that the price may turn around in the near future. When the price continues to fall, but MACD indicators come out one after another, it means that the bottom deviation appears, indicating that the price is about to end the decline and turn to rise.
5. The index of cowhide market will be distorted. When the price does not run from top to bottom or from bottom to top, but keeps running horizontally, we call it cowhide market. At this time, a false signal will be generated in the MACD indicator, and the intersection of the DIF line and the MACD line will be very frequent. At the same time, the retraction of column lines will occur frequently, and the color will often turn from green to red or from red to green. At this point, the MACD indicator is in a distorted state, and its use value will be reduced accordingly.
The curve shape of DIF is used for analysis, mainly using the deviation principle of indicators. Specifically: if the trend of DIF deviates from the trend of stock price, it is time to take concrete action. However, the accuracy of guiding the actual operation according to the above principles is not satisfactory. After practice, exploration and summary, the accuracy is greatly improved by comprehensively using 5-day, 10 moving average, 5-day, 10 moving average and MACD.
The Chinese name of KDJ indicator is stochastics, which originated from the futures market. Stochastic index was initiated by george ryan. It reflects the strength of the price trend through the fluctuation range of the highest price, lowest price and closing price of the day or in recent days.
There are three lines on the graph for stochastic indicators, namely, K line, D line and J line. In the calculation of random indicators, the highest and lowest prices in the calculation period are considered, and the random amplitude in stock price fluctuation is considered. Therefore, people think that random indicators reflect the fluctuation of stock prices more truly, and their prompt function is more obvious. The meaning of random indicator KD line: KD line is called random indicator, K is fast indicator and D is slow indicator. When K line breaks through D line, it indicates an upward trend and can be bought; When the K line breaks through the D line, it can be sold. If the KD value rises above 90, it means high, and if it falls below 20, it means low. If it is too high, there is a possibility of falling, and if it is too low, there is a chance of rising.