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This section mainly talks about how to identify short-term strong coins through the moving average system. It is a way to select strong coins to chase the rise, which is also called "flying kiss" in the entanglement theory! (Attached with NOT actual combat case)
"When you draw a bow, you should draw a strong one, and when you use an arrow, you should use a long one." Short-term trading should focus on strong coins, but strong coins do not mean they will not fall. Learning to distinguish which declines are opportunities and which are risks is the basic skill of short-term trading.
Many short-term traders like to chase strong coins, but they often chase them at short-term highs. Once the strong coins pull back, they will hastily stop losses. After stopping losses, they find that the coin has turned around and soared.
In fact, there are opportunities for buying low in strong coins, but when this opportunity arises, most people dare not buy the callback of strong coins. They mostly use the method of intraday shock or space for time. This method is bound to be as rough as the waves, making people try to avoid it, but the rare opportunity to buy low is hidden in it.
When operating strong coins, you can pay attention to the thickness changes between the daily MA5 and MA10 moving averages. Generally speaking, coins that can be called strong must keep rising at a large angle, and deviating from the line is a common pattern.
In this state, once the first pullback or sideways movement begins after a continuous rise, it is time for the strong coins to start a correction.
The first sharp drop during a strong rise is often a callback method for strong coins to trade space for time. Of course, this is only one of the callback methods, and not all strong coins will adopt this method.
Some strong coins that are being chased by funds will also adopt the method of adjusting slightly to the 5-day moving average and then rising again. Once the funds lose the desire to chase the rise, the coins that continue to adjust in this way will directly enter a large-scale decline. The so-called "cliff-like decline" often occurs in such coins.
At point A, a hammer line was formed during the callback, and then a positive line was reversed. Its low point is close to the 10-day moving average, and the high point has recovered the 5-day moving average. (The thickness space is composed of the moving average, not the currency price.)
The 5-day moving average and the 10-day moving average still have a relatively large space. More importantly, the 5-day moving average, which represents the price strength, still maintains an upward trend.
This shows that the decline of the first negative line at point A has not consumed the strength of the rise in currency prices. The market has a strong bottom-fishing sentiment, and the positive line that bottomed out and rebounded is a more suitable low-absorbing point.
For strong coins in similar cases, even if the price falls below the 10-day moving average, as long as the 5-day moving average has not turned and the thickness space has not been closed, it means that the short-term rising strength has not completely disappeared, and you can still look for opportunities to intervene.
In actual combat, if the 5-day moving average crosses the 10-day moving average and the thickness space is closed, it means that the adjustment space and time of the currency will be correspondingly extended or even reversed (Figure C~D).
The specific analysis can be based on the technical details (please see the series content)
For example: Figure B shows a large volume at a high level, which is suspected of selling; Figure C directly falls below MA5 and comes to MA10, indicating that the selling pressure on the market is large; the real part of Figure D has a tendency of top divergence relative to the previous high point!
Actual combat case:
The first purchase after the retracement to 4HMA5 (Figure A):
https://x.com/Xxoo3k5k/status/1795373807664009550…
After the sharp rise in the moving average, it is suggested to clear the position or set a stop loss (Figure C~D):
https://x.com/Xxoo3k5k/status/1798248871556272243