One, Trend Judgment
Two methods for trend judgment
a. Moving Average: Smooths price fluctuations by calculating the average price over a specific period, making it easier to identify trends. The 20-day moving average is often used for trend judgment.
In an upward trend, when the price falls to the vicinity of the 20-day moving average and shows signs of stopping the decline and rebounding, it is a good time to go long. However, investors should closely monitor market dynamics and changes in technical indicators, and reasonably set stop-loss points to control risks.
In a downtrend, when the price rebounds to the vicinity of the 20-day moving average and shows signs of stagnation and decline, it is a good time to short. However, investors should closely monitor market dynamics and changes in technical indicators, and reasonably set stop-loss points to control risks.
b. Trend Line: Connects the highs or lows in price movements to form a straight line, reflecting the market's upward or downward trend.
Two, 20-day Moving Average - Trend Line (Operational Lifeline)
1. Support and Resistance Effects:
- When the price runs above the 20-day moving average, the 20-day moving average provides support for the stock price (buy signal);
- When the price runs below the 20-day moving average, the 20-day moving average becomes a resistance level for the stock price (short signal).
2. Buying Signal:
- After the stock price has undergone a round of decline, breaks upward through the 20-day moving average after adjustment, and is accompanied by an increase in trading volume, it is considered a technical buying point.
- When the 20-day moving average is upward, and the stock price briefly falls below the 20-day moving average during a pullback but quickly recovers, and the trading volume is not large, consider adding to your position.
3. Selling Signal:
- When the stock price rises for a period, the 20-day moving average turns downward, and the stock price operates below the 20-day moving average, it should be regarded as a sell signal.
- When the 20-day moving average flattens at a high level, one must be wary of the stock price breaking below the 20-day moving average. If the closing price falls below the 20-day moving average for two consecutive days and the 20-day moving average turns downward, one should liquidate positions promptly.
Three, Buy and Sell Transactions
1. Bullish Opening Conditions
a. Bearish trend reversal and the price effectively stabilizes above the 7-day moving average, accompanied by an increase in trading volume;
Note: Pay close attention to the market's upward trend near the 20-day moving average and the intermediate decline.
b. Bearish trend reversal and the 7-day, 20-day moving averages are in a bullish arrangement, accompanied by an increase in trading volume (high win rate)
c. Looking for second buying opportunities
2. Bearish Opening Conditions
a. Bullish trend reversal and the price effectively breaks below the 7-day moving average, accompanied by an increase in trading volume (low win rate)
b. Bullish trend reversal and the 7-day, 20-day moving averages are in a bearish arrangement, accompanied by an increase in trading volume (high win rate)
c. Looking for second selling opportunities
