17 technical knowledge points you must know! All are valuable insights, read carefully to avoid five years of detours in stock trading, recommended to bookmark!
1: A sharp drop is a touchstone for stocks. If the market crashes and your stock only slightly declines, it clearly indicates that institutional investors are holding their ground, refusing to decline. Therefore, you can hold onto such stocks with confidence; they will yield returns. If the market crashes and your stock plummets, but the next day the market rises and your stock surges, this may likely mean that the main force is using the market's drop to wash out weak hands, and the stock has good characteristics. You can consider buying this stock during the market crash and selling it when the market rises for short-term rebound profits.
2: If you are doing ultra-short-term trading, and a stock's price drops within the first 30 minutes of trading and then rebounds, but does not break the opening price, do not buy today. If the price drops first and then rises within the first 30 minutes without breaking the opening price, it indicates that the main force is washing out weak hands, and there is a high probability of a rise in the afternoon. You can buy at a relatively low point in the morning and wait to sell when it rises.
3: If a newcomer does not know how to buy and sell, the simplest and most direct method is to hold stocks above the 5-day moving average for short-term trading and sell if it breaks the 5-day line. For medium-term trading, hold above the 20-day moving average and sell if it breaks. There are many methods; the best one is the one that suits you. The difficulty in trading is not the lack of methods but the execution. Persisting mindlessly in repeating one method solves over 90% of issues; simplicity is the ultimate sophistication.
4: Before a significant price surge in a stock, the main force will definitely take an action to resolve trapped positions. If a stock shows no movement in the morning and suddenly surges in the afternoon, it is highly likely that the main force is testing the stock. Please keep an eye on this stock; the opportunity has arrived!
5: Once a main upward trend is formed without obvious volume increase, intervene decisively. Hold on during a volume contraction while prices rise, hold on if the trend hasn't broken during a volume contraction while prices decline, and quickly reduce your position if the trend breaks on increased volume.
6: When a stock's trend is upward, do not look at any indicators except for trading volume. Hold on if the volume is low or flat, but run if there is massive trading volume. Volume and price are the essence; volume is water, and price is the boat.
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