In the financial market, whether you are a market analyst or a trader, no matter which of these two professions you are engaged in, you will face the interpretation and analysis of the products you care about. That is to say, we all have to use Technical means may give research and judgment on the market from the perspective of fundamentals, and even give corresponding operating points.
Fundamentals are beyond the scope of this discussion. This time I mainly want to share with you a special usage in technical analysis.
I believe that friends who are engaged in technical analysis know that the technical analysis methods often used in the market are nothing more than technical indicators and marking tools. Of course, some masters put aside these exaggerated things and directly return to naked K for trading and analysis. , I believe there are not many such people. Therefore, everyone's research and judgment on the market should still be based on technical indicators and marking tools. Today I will focus on talking about the usage of trend lines.
At this time, someone said, isn't it just a trend line? Who wouldn't use it? Isn't it the connection between high points and high points that forms a pressure trend line; the connection between low points and low points forms a support trend line, that's all, what can I say? ? If you only understand the use of trendlines in this way, then I can only say that your understanding of this basic tool is not broad enough.
We are not arguing here, friends who are interested will continue to look down.
First, let me introduce what is a trend line
A trendline is a line used by technical analysts to plot past price movements of a security (stock) or commodity futures. The purpose is to predict future price changes. The line is formed by connecting the highest or lowest price points for securities or commodities that rose or fell during a specified period of time. The angle of the final line will indicate whether the security or commodity is in an uptrend or a downtrend. If the price rises above a downward sloping trend line, or falls below an upward sloping trend line, technical analysts generally believe that a new price trend may be emerging. It is generally believed that trend line analysis is a method of technical analysis, but trend line analysis must be combined with other technical analysis to achieve better results.
Second, the 3 types of trends:
1: uptrend (higher lows);
2: Downtrend (lower highs);
3: Horizontal trend (regional shock);
Finally, the main points of the trend line drawing method:
In a word, let the price of the K-line fall as much as possible on the trend line you draw , so that the trend line will be more accurate.
Having said so much, let's take a look at the usage of trend lines in combination with graphics
rising trend line
From the graph above, it can be seen that these three trend lines are correct from the point of view of definition, but which one has the most operational value?
First of all, the light blue one, no matter from the initial request of the market to the end of the market, obviously has operable value.
Secondly, the blue one and the red one are also support trend lines, but the red one is only drawn from the perspective of definition, and obviously there is no practical significance for the red one.
Summary: Drawing a trend line should not only be based on the definition, but should consider the practical significance, so try to put as many low points or high points as possible on the drawn trend line, this is the main point!
I won’t talk about the drawing method of the downward trend line. You can draw inferences from one instance and make an analogy. Just remember the main points. ,
Next, look at a special usage of a trendline:
From the above two pictures, I don’t know if you have found anything carefully?
These two charts, one is in a downtrend and the other is in an uptrend
But the drawing method is different from the definition of the trend line drawing method we are familiar with. This drawing method is the connection between the low point and the high point or the connection between the high point and the low point.
What are the benefits of drawing this way?
From the above two graphs, it is not difficult to see that the trend line is generally a connection between at least two points, but when the market just started, there is no low point and low point or high point and high point at all. What should we do when everything is revealed? Then the above drawing method just solves this kind of problem. The advantage is that the support level or pressure level can be found earlier, which is convenient for purposeful operation in actual combat.
This drawing method is the so-called seesaw.
Of course, you can also use the disk to find more opportunities to draw pictures like this, replay the disk more, feel that it is practical, and then use it in actual combat.
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