In stock technical analysis, drawing trend line is a necessary skill to learn naked K trading method. Since almost no other indicators are used, the accuracy of the trend line is very important. So today Bian Xiao is here to sort out the knowledge about buying and selling stocks according to the trend line. Let's have a look!
How to buy and sell stocks according to the trend line
As a support line or pressure line, it will restrain the future stock price. When the stock price falls near the trend line in the upward trend, investors will choose to continue to hold positions or increase positions because of psychological hints that the stock price will not fall, so the stock price is supported. In the downward trend, when the stock price rebounds to the vicinity of the trend line, investors will think that the stock price cannot break through the trend line and choose to sell temporarily, so the stock price is suppressed here.
Selling points when the uptrend line breaks down: first, when the uptrend line is broken for the first time; Second, when the rebound high point after the breakthrough is suppressed by the uptrend line; Buy when the downtrend line breaks upward: first, when the downtrend line is broken for the first time, and second, when the downtrend line supports the downtrend line after the breakthrough; The same is true for trading points where the channel line of sideways trend breaks up or down.
What is the stock trend line?
Trend line in stock refers to the line used by technical analysts to draw the past price trend of securities or commodity futures. The basic form of trend line is: in an upward trend, a straight line connecting obvious support areas, that is, the lowest point; In the downtrend, the straight line connecting the obvious resistance area is the highest point. The trend line of stocks is mainly used to predict future price changes.
Trend line is an effective way to cultivate investors' overall situation. The application of trend line can help investors to see the future trend of stocks, rather than staying in the same place, so as to smoothly find the trend of stock price movement, buy and hold when the trend rises, and sell and wait and see when the trend falls. Whether an investor has a long-term vision and overall situation when trading stocks is also the key to successful investment.
Two main functions of trend line
Some people regard the 60-day moving average as a trend line, while others regard the 120 moving average as a trend line. Taking the 60-day moving average as the trend line, it is considered that the 60-day moving average is also called the medium-term trend line, which is an important traditional indicator of the trend of capital inflow and outflow. As for the stock trend line, how many days? K-line chart represents the price trend and K-line chart represents the number of days. There are three kinds of trends: short-term trends, medium-term trends and long-term trends, which represent few days.
As for the main function of the trend line, one is to suppress future stock price fluctuations. In essence, this constraint is mainly reflected in the psychological suggestion of investors. Once the seller's power is greater than the buyer's power, the actual selling power generated by the investor's psychological set will accelerate the stock price decline. The other is that after the potential line is broken, it means that the next trend of stock price fluctuation will be reversed. The more important and effective the trend line is broken, the stronger the signal of its turning trend.
How to set the stock trend line?
According to the trend line direction, it can be divided into upward trend line, downward trend line and horizontal trend line; According to the period of trend line, it can be divided into: long-term, medium and long-term, short-term and short-term trend line. Generally speaking, a span of more than 6 months is called long-term trend, a span of 3-6 months is called long-term trend, a span of 1-3 months is called short-term trend, and a span of 1 month is called short-term trend.
In the upward trend, two adjacent low points are connected into a straight line, which is the upward trend line; The straight line connecting two adjacent high points in the downward trend is the downward trend line; The straight line connecting two adjacent high points and low points in the sideways oscillation trend is the lateral trend line. The trend line connected by two points is only temporary, and the validity of the trend line needs to be confirmed by the third point, that is, the three-point alignment.
If it is a stock, the medium-and long-term moving average is generally used as the judgment index of the long-term trend, and the 30-day, 60-day and 120-day moving average can be set as a combination. The 30-day and 60-day moving averages are medium-term indicators, and 120 is a long-term indicator. This combination can ensure short-term accuracy, long-term trend is not greatly affected, and can be used to judge the general trend of stocks; However, it has little reference significance for short-term and ultra-short-term trading varieties such as foreign exchange spot.
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