The moving average system is one of the most commonly used technical analysis methods in the market, but there are some problems in judging the accuracy of the market.
Insufficient, the main reason is that investors often refer to only one moving average system when using the moving average system. Most people use the price moving average, only a few use the volume moving average system, and some even refer to only one of them, such as the annual line and the 20-year moving average. No matter what kind of moving average system is used, it is impossible to draw accurate conclusions, because the relationship between the basic elements of technical analysis has been artificially separated. Comprehensive analysis of the double moving average system can make up for this defect.
Double moving average system refers to the moving average system of index or stock price and the moving average system of trading volume. Among them, the system parameters of stock price can be set as multiple moving averages such as 5th, 10, 20th, 30th and 60th. The setting of trading volume moving average system cannot copy the setting of index or stock price moving average, but should set three moving averages according to the operating characteristics of trading volume, that is, 6 days and 10.
The double moving average system is more suitable for accurately attacking strong stocks that have just got rid of the falling market and entered the reversal stage. When using the double moving average system to select dark horses, the most important thing is to judge the breakthrough effectiveness of stock price and volume.
1. When the stock price and trading volume both exceed their respective moving averages, it means that the stock has entered a strong rising stage, and investors can actively pay attention to the movements of individual stocks at this time.
2. When the 5-day moving average of the stock price breaks through the whole moving average system and the trading volume of the 6-day moving average breaks through 12 and the 24-day moving average, investors can start buying positions.
When using double moving average system to select stocks, we should pay close attention to the strength of its breakthrough. If the short-term moving average only breaks through accidentally in the phase of entanglement and adhesion with other moving averages, it is an invalid breakthrough. If one moving average system of stock price or trading volume breaks through and the other moving average does not, investors can't buy rashly.