Section 1: Principles of the Cryptocurrency Circle
In the ever-changing world of the cryptocurrency industry, the inertia principle demonstrates its power. When the market is in an uptrend or downtrend, the trend usually continues. The wave principle is like the rhythm of the sea. The deeper it falls, the higher it rises. Sufficient volume drives prices up. When the market is extremely quiet, it often indicates that a big market is coming. When things reach their extremes, they will turn in the opposite direction. When the long-term and short-term trends are consistent, their power is the strongest. When the short-term and long-term trends conflict and turn around and cross, they may trigger a change in the market. The cost principle reminds investors that when the purchase cost is less than the market cost, the risk is relatively small.
Section 2: Main Behavior
In the main force collection stage, the indicators are in the middle and low positions, the price and volume are well coordinated, there are often large buy orders during the trading session, and there are intermittent volume release behaviors. When the main force enters the market, the price of the currency is in the process of consolidation or decline, but suddenly a huge amount of upward movement is released, the inner market is obviously larger than the outer market, and the turnover is active. The main force distribution often opens high and goes low, the upward rush is weak, the moving average is often broken, and the price and volume are poorly coordinated. If the currency price plummets, the price and volume are poorly coordinated, the outer market is much larger than the inner market, and the trading volume is released, it should be the main force withdrawing from the market. When the main force absorbs enough chips, it begins to shake the warehouse and wash the chips. The most obvious feature is that there is no volume of rise and fall, and the volume is shrinking wave by wave. When the pattern develops to the point where the moving average is glued together and the bulls are arranged, the main force tends to pull up.
Section 3: Bottom pattern analysis
The sharp rise in the price of the currency starts from the bottom, and the formation of the bottom needs to go through a bottoming process, the purpose of which is to adjust the moving average or clean up the chips. The bottom can only be formed when the market sells the currency to a very small extent, or when the market participants are desperate to escape due to news and new forces intervene. From the chart, one form is a narrow shrinkage, and the other form is a huge decline. Only after the bottom is formed can a strong upward trend be generated. Seven bottom forms are summarized in actual combat, including platform bottom, sea bottom moon, Yang clamp Yin, moving average star, bottom line, three red soldiers and long tail line. The bottom of the currency price is generally formed in three days, and it needs to be judged by combining the moving average system and trading volume. The moving average is in a state of adhesion or the short-term moving average is below the medium and long-term moving average, which can be regarded as the bottom. If the trading volume does not decrease or decrease sharply, there is no bottom. The bottom breakthrough is often caused by news, but it is constructed through time and form.
For example, at the bottom of the platform, the price of the currency is flat for three consecutive days near the 5-day moving average, forcing the 5-day and 10-day moving averages to form a golden cross or the 5-day line is upturned, and the 10-day moving average slows down. In the three days, the first day closes with a small Yin line, the second day closes with a small Yang or a small Yin, and the third day closes with a small Yang. The overall three K lines are in a horizontal state. The seabed moon requires the first day to close with a medium Yin line or a large Yin line, and the second and third days to close with a small Yang or a cross star in an upward form, and there are signs of a trend of increasing trading volume in the three days. Yang-Yin means that a Yin line is sandwiched between two Yang lines. On the first day, the currency circle is suppressed from rising, and it is forced to adjust on the second day. On the third day, new forces re-enter, and the rise is more reliable. When the moving average star is at the bottom and the moving average system is just repaired and moves upward, it often closes with a Yin or Yang cross star near the moving average, which is a manifestation of the balance of long and short forces. If it occurs at the bottom, it is very easy to rebound or break through on the second day. Three red soldiers appear three consecutive small positive lines with low opening and high closing near or below the moving average, and the volume has a trend of gradually increasing, indicating that small-scale funds are absorbed at the bottom, and the market outlook is optimistic. The opening price on the day of the bottom line opened below the moving average and closed above the moving average. It was deliberately done by the main force. According to the principle of inertia, the market outlook should be bullish. After the opening of the long tail line on the day, the currency price fell in large volume, and was later pulled up by the main bulls, leaving a long lower shadow, which is a signal for the intervention of rebound funds. The next day, the upward path was regained, and the upward space was obvious. The bottom is constructed by the shape, and the trading volume plays a key role. Whether it is shrinking or increasing, there must be a regularity. For example, shrinking wave by wave and moderately increasing volume are positive quantitative changes. However, if the volume is irregular or the volume is large but the increase is small when it goes up, any shape may become a downward shift.
Section 4: Some experiences and opinions on currency circle analysis
As for whether it is better to increase or decrease the volume when the stock price rises, it is better to increase the volume, but increasing the volume does not mean that you can buy. The nature of the increase depends on the volume. High-level counter-trading is a signal of shipment, while small or extremely small volume is a quantitative change form with relatively low risk. Because small volume can exclude counter-trading, small volume proves that the selling pressure is light, and small volume makes it easier for the main force to control the market, and the rise is more crazy. Therefore, if you see a stock with continuous shrinking volume and a strong stock price, you can follow it with an appropriate amount to do mid-term investment.
When it comes to predicting rising or falling target values, most people in the stock market have rich imaginations and tend to be extreme in their views on the development of events, making it difficult for them to distinguish whether it is a rebound or a start, a pullback or a decline.
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