The content of this section is suitable for everyone. You can use it directly with the basic things in this article. The learning difficulty and practice difficulty are not high~
The first section is about theory, and the second section is about practical things. The whole article is not long, about 1,500 words. I will bold or mark the key points.Join the team and get full service from project investment research to secondary analysis👈🏻
(I personally think that what this article talks about is very clear)
Main Text👇🏻
Lesson 1: Overview of Technical Analysis 🔻
1. Overview
1. Technical analysis is to predict the future price trend by studying the past price trends with the help of research methods and means in disciplines such as psychology and statistics.
2. Technical analysis is ostensibly about analyzing the price trend in the market, but in reality it is about analyzing the individuals or institutions behind the prices.
2. Three basic assumptions of technical analysis
1. Prices reflect everything in the market
2. Prices change according to certain trends and rules
3. History repeats itself
(1) It may not be an exact repeat, but it will be roughly similar
(2) Because the subjects behind it are irrational, they will make countless similar mistakes
3. Actual operating procedures
1. Take quantity and price as the general outline of operation guidance
2. Use form as the basis for judgment
3. Technical indicators can also be used to assist operations, but technical indicators have a delay, while volume and price do not.
4. Learn to draw lines. The key to drawing lines is to connect enough points. The more points, the more effective it is.
IV. Precautions
1. Technical analysis must be used in conjunction with fundamental analysis
(1) This theory is applicable to medium- and long-term technical analysis, while very short-term (intraday) operations are mainly based on price games and can ignore the impact of fundamentals.
2. Combine multiple technical analysis methods
(1) Technical indicators, K-line patterns, etc.
3. Combine theory and practice
Lesson 2: Support and resistance lines, pattern theory🔻
1. Support and resistance lines
1. Support line
(1) In a graph, a horizontal line or a rising straight line formed by two relatively low points
(2) The support line prevents prices from falling further and has symbolic significance
(3) When the price falls to the support line, the price starts to rise due to the support. If the price falls below the support line, it means that the decline will continue.
(4) Support lines can be divided into long-term and short-term in terms of duration. The long-term support effect is greater than the short-term support effect.
2. Resistance line
(1) A horizontal line formed by two relatively high points or a straight line showing a downward trend
(2) The resistance line has the symbolic meaning of hindering the price or market from continuing to rise.
3. The long-term and short-term effects of support and resistance lines should be determined based on the degree of inclination in the space.
2. Morphological Theory
1. Overview
(1) By studying the trajectory of prices and analyzing the comparison of the power of the long and short sides reflected by the curve, we can understand our behavior
2. The law of price movement
(1) Reaching balance → Breaking balance → New balance → Breaking balance again...
3. Notes
(1) From different perspectives, the same form will have different interpretations
(2) In actual operation, the pattern theory requires that the pattern be fully formed before action can be taken, which may lead to missed opportunities.
(3) Morphological theory is not omnipotent, and the results obtained are only a reference.
Lesson 3: Combination of support and resistance with volume and price patterns丨Top and bottom patterns🔻
1. Breaking bottom and turning pattern
1. It symbolizes that the main short-selling potential is exhausted
2. After completing the last decline, break through the top line to form an upward trend
False Breakout Pattern
1. It symbolizes that the main bullish potential is exhausted
2. After the breakout, the false breakout pattern is established after the neckline is broken.
3. False breakouts and bottom-breaking patterns are only used as the basis for judging the top and bottom and the main force, not as buying and selling signals
Lesson 4: Band Satisfaction Calculation under Support and Resistance 🔻
- Rise/Fall calculations are satisfied
The part in the above figure shows that the increase satisfies the calculation, and the decrease can be directly understood in reverse.
This calculation method is used as a profit target for position management.
Lesson 5: Technical Indicators 🔻
1. The role of technical indicators
1. By analyzing technical indicators, you can get early warning of possible reversal when there is no obvious reversal in the trend pattern.
2. When determining the reversal or continuation of a trend based on pattern theory, technical indicators can serve as a reference for confirmation
2. Technical indicator combination
1. Optimal number of indicators
(1) For traders, a system combination of 3-6 technical indicators is more appropriate.
(2) Judging the winning rate with less than 3 factors may be biased
(3) More than 6 decisions that will interfere with trading
2. Moving average indicator selection principles
(1) Short-term selection: See which moving average describes the recent market conditions most clearly, that is, which moving average has the strongest trend of boosting or depreciating signals as a short-term moving average.
(2) Long-term moving average selection: A larger moving average parameter will reflect the long-term market trend, but it is not a basis for short-term buying and selling.
Lesson 6: Things to note 🔻
1. Strictly set stop loss | stop loss method
1. Stop loss at the right position
(1) When going long, set the stop loss below the key support level; when going short, set the stop loss above the key resistance level
2. Fixed stop loss
(1) Set the stop loss at a fixed point
(2) In principle, the shorter the operation, the closer the stop loss price should be to the entry point.
3. In a sideways market, the stop loss can be relaxed appropriately
4. Do not allow the situation where the price keeps falling without setting a stop loss
2. Avoid a bad mentality
1. Do not stop loss. The first principle of short-term trading is to protect the principal and put safety first;
2. Go against the trend and follow the trend to hold on with confidence;
3. Do not blindly follow others’ so-called “rumors” and strictly implement your own trading system;
4. Dare to lose but not to gain, dare to hold;
5. Attempting to buy at the bottom and sell at the top, following the trend, all the mentality of buying at the bottom and selling at the top is a gambler's mentality;
6. Gambler mentality, strictly implement your own trading system, and do not make operations that violate your own system;
7. Overconfidence, the market is the best teacher.
Although this article is not the one with the most words in the series, I think it is the one that explains some basic concepts and practices most clearly. I hope it will be helpful to you. Thank you for reading.