This article explains the relationship between volume and price, key positions, Dow Theory, trend lines and other related applications. Some concepts in this article may be repeated with previous ones, but there will also be some differences, so you can read them together.

Lesson 1: The relationship between quantity and price and the application of key positions🔻

1. Relationship between quantity and price

1. Trading volume increases↑, holdings increase↑, prices rise↑

(1) Bulls are stronger than bears, and the probability of price continuation is higher

2. Trading volume increases↑, holdings decrease↓, prices rise↑

(1) Long positions are all being closed, and prices may fall at any time

3. Volume decreases↓, open interest decreases↓, price increases↑

(1) Short positions are closed and long positions are held, prices rise but then fall back

4. Trading volume increases↑, holdings increase↑, prices fall↓

(1) Bears are stronger than bulls, prices continue to fall, but excessive selling will cause a rebound

5. Volume decreases↓, holdings decrease↓, prices fall↓

(1) Long positions are closed, short positions are held, and prices continue to fall

6. Volume increases↑, holdings decrease↓, prices fall↓

(1) Both long and short positions are being closed, and prices may rise at any time

2. Contents of quantity and price

1. Volume: buy volume, sell volume, open interest, trading volume

2. Price: Buy price, Sell price, Highest price, Opening price

3. Key Location

1. What is the key position

(1) Support and resistance levels

(2) Areas with concentrated price transactions

(3) Michishi-ten

(4) High before low before

2. Supply and demand relationship of support and resistance levels

(1) Support: represents the concentrated demand from buyers, which is sufficient to support the pressure from sellers.

(2) Pressure: represents the concentrated willingness of sellers, which is enough to suppress the rise formed by sellers.

3. Market direction selection

(1) The decision on market direction depends on the game between history and key positions

(2) The game between long and short positions will be maximized at certain key locations

(3) Once the price breaks through, it means the game is over and the direction is clear. You can choose to enter the market at this time.

4. False crossing signal (danger signal)

(1) When the price breaks through a key position, it does not follow the trend but instead falls back again.

(2) This means that the target may have entered a new long or selling force, and should not be traded.

Lesson 2: Dow Theory and Trend Line Principles🔻

1. Three Axioms of Dow Theory

1. The price is all-inclusive

(1) All fundamental factors that affect market changes drive price changes

2. Prices evolve in a trend, and market inertia forms trends

3. History will repeat itself

(1) History will repeat itself, but not simply

2. Dow Point Classification

1. Trends and titles

(1) If the lows and highs keep rising, it means an upward trend

(2) If the lows keep getting lower and the highs keep getting lower, it means the trend is down.

(3) The low point in the upward trend is LOL

(4) The high point in the downward trend is LDH

(5) Connecting different LOLs in an upward trend is the upward trend line

(6) Linking different LDHs in a downward trend is the downward trend line

2. Trend line principle

(1) Reflect the real price trend as much as possible

(2) The more times the trend line collides, the higher the effectiveness. The entity part cannot break through the trend line.

(3) Do not link points after the highest point in an upward trend, and do not link points after the lowest point in a downward trend.

(4) There needs to be a certain time span between connecting bright spots, and the trend line should be parallel to the objective direction of the trend as much as possible.

3. Trend end signal

(1) The price in an upward trend refuses to reach a new high. The price breaks through the upward trend line and falls below the important support level, declaring the end of the upward trend.

(2) The price in a downward trend refuses to reach a new low. The price breaks through the downward trend line and breaks through the important resistance level, announcing the end of the downward trend.

Lesson 3: Trend line application 🔻

1. Market Signals (Follow the Trend)

1. When the market price effectively breaks through the downward trend line, it is a signal to close the short position, not a signal to go long

2. When the market effectively breaks through the horizontal trend line relative to the bottom, it is a long signal

3. Trend line correction

(1) Follow the market trend and constantly revise the short-term trend line to match different buying and selling strategies

2. Pattern screening of entry and exit signals

1. Identify patterns that usually form at key positions in the market

3. Transaction Process

1. Determine the time period

2. Determine the transaction type

3. Determine the current trend

4. Find key locations, price-intensive areas, peaks and troughs

5. Wait for trading signals

6. Determine the impact of patterns on trends

7. Stop Loss

Lesson 4: High-frequency day trading丨Trading with changing buying and selling volumes🔻

1. Entry and Exit Basis

1. The party with the largest number of orders is more powerful

2. The party being traded is weak

3. Repeated transactions at one price indicate fierce competition between the two parties

4. Repeatedly placing and canceling orders indicates an unsteady position or an attempt to attract transactions

2. Trading skills

1. Use changes in buying and selling volume as a basis for entry and exit

2. Pay attention to the emergence of large orders

3. Feel the rhythm of market fluctuations and adopt different strategies for different rhythms

4. Combine trading volume and position trends and pay attention to breakthroughs in key positions

5. Pay attention to the impact of position changes on the market

6. Pay attention to the linkage between sectors

7. Sell high and buy low within the channel range

3. Variety selection

1. The larger the trading volume and the better the liquidity, the more suitable it is for high-frequency trading.

2. Frequency from low to high, then from high to low

3. Withdraw funds in stages and increase funds cautiously

4. Transaction Details

1. Use more order placement techniques for small orders

2. Be good at seizing opportunities to enter and exit the market by taking advantage of price differences

3. Minimize the number of slippages

I hope this helps you. Thank you for reading and following.