Category: Money tips Release Date: 2006-07-28
Wall Street had a famous saying: "Only the trend is your friend." "Advantage of the opportunity to" invest in the securities market is an important rule. But how to determine trends and the flow, it is troubled by problems of investors. Traditional technical analysis trend analysis on the tangent theory, the trend line is defined as a straight line, but this line can not effectively determine price trends. This paper studies trends in securities prices, proposed the "natural trend line" theory so as to try to resolve this problem. The natural trend line theory, which is a natural trend line on the definition of painting and its application of theory.
1, "the flow to" invest in the securities market is the important principle of one. What is the trend of the market price of the securities as time goes on, on the chart will leave the track, the track showed a certain degree of directional orientation reflects the the price volatility. Simply put, the trend is the direction of price fluctuations, or the stock market movement direction. Trends in three directions: an increase in orientation; two horizontal; 3 down direction.
In accordance with Dow theory, the classification, the trend is divided into three types: a major trend is the general direction of price fluctuations. The main trends in the duration of relatively long, investors strongly to be cognizant of the direction, because to understand the trend of the main advantage of the opportunity to do so into it. 2 minor trend is a major trend in the trend of amendments and adjustments. Shorter the duration of the secondary trend. 3 short-term trend, the trend is minor amendments and adjustments trends. The duration of short-term trend is even shorter.
2. "Advantage of the opportunity to" Adam the essence of the theory theory is an American Adam Wilde (J · W · Wilder) created by the investment theory. Wilder in 1978, invented the famous Strength Index RSI, also invented other analytical tools such as PAR, parabola, power indicator MOM, swing index, market volatility and so on. These analytical tools of the era of popular at the time, welcomed by many investors, even in today's market, portfolio investment, RSI is still a very well-known tools of analysis. But it is strange, Wilder published an article later overturned the benefits of these analytical tools, while the introduction of another set of new theories to replace these analytical tools, namely, "Adam theory." Adam theory suggests that there is no analysis tools can accurately predict the absolute potential trend city, each analysis tool has its shortcomings, the Urban Potential simply can not predict, because, when the gains that can be up to rise, fall or falls that could fall any further. The essence of the theory is the rejection of all of the subjective analysis tools, but to "the flow of."
Stocks in the Shanghai and Shenzhen stock market, holding a long-term bull market in stocks, that is, the bull market and to shun a result, profitability; while holding a long-term bear market in stocks, that is, against the bear market and as a result, sets of attributes actually enjoy deeper, this kind of everywhere. Since "the flow is" so important, then how to determine trends and the "advantage of the opportunity to" do? Let's take a look at the trend line is a straight line can effectively determine the trend.
Second, a linear trend line. With regard to the trend line discussion of the concept "straight line" is the author added to the "trend line" in front of the adjective, which aims to "straight-line trend line" and the first time by the author's "natural tendency lines "to distinguish. This is because, before, on the stock price trend line analysis of the theory (that is, tangent theory), the only "trend line" concept, and this "trend line" refers to the "linear trend line." For example, in the section edited by Li, the Chinese People's University Press in February 2004 edition of the financial series of textbooks in the "Securities Investment Technical Analysis" (second edition) p. 92, the trend line is defined as: "the trend line is trends in the performance of stock price fluctuations in a straight line. " This kind of trend line is defined as a straight line, obviously there is an implicit assumption: the direction of the trend to be linear. And this is the actual stock price fluctuations in the direction of the trend is not totally satisfactory, because the direction of the trend of price fluctuations, even in the general direction is not necessarily a straight line. The direction of the trend of price fluctuations in both a straight line, there are curves.
2. Linear trend line painting straight up and down trend line is divided into two kinds. Rising trend, and the two together into a low rise in a straight line, we get an upward trend line. Falling trend, and the two fall into a high-point with a straight line, get down trend line. Practice has proved that in terms of respect of a price trend, standing at different points of view will be drawn in different linear trend line, different people may draw different linear trend line, so using a linear trend line to analyze price trends, its The result is inevitably compromised, ie, linear trend line is not an effective way to judge price trends.
Third, the natural trend line In my opinion, should not artificially set prices of the securities draw the trend line, but should find the prices of the securities naturally occurring trend line.
1. Natural trend line and drawing method of so-called natural trend line is defined relative to a straight line, artificial trend line drawn, is the tendency to run with the price of the securities which occur naturally, and need to find and confirm the trend line, It is usually best represent the trend of the price on a particular day moving average. The first is a natural trend line of a particular moving average line is a stage of the arithmetic mean of the connection price, which reflects the phase of the average cost of equity holders; Secondly, it is also a price to reflect a certain stage operation the trend line, simply say: the natural trend line = moving average trend line + line drawing method of the natural trend: the rising trend as an example, the use of stock analysis software, click the mouse to find a most suitable moving average line, making as much as possible the lowest number of shares falls on this line, we have increased the natural trend line. Conversely, it can be decreased by the natural trend line
