Category: Money Tips Date: 2006-10-11
By the definition of technical analysis that, the main contents of the chart analysis and technical indicators for two categories. In fact the early technical analysis simply chart parsing, that is constituted through the market behavior chart patterns, to speculate the future price movements. But the practical application of this method, the subjective sense of vulnerability to the impact, but there are different judgments. This is why many people jokingly chart parsing is an art work, nine of ten possible reasons for the conclusions.
In order to reduce the subjectivity of judging the chart, the market gradually develop some way of calculating the data can be used to support individual graphic patterns of perception and identification, the analysis more objective.
Engaged in technical analysis, the basic operation has the following 11 principles to follow:
1. Stock up or down was an irregular change in the situation, but the overall trend there is a clear trend, that is, although not in the charts the next day or next week, the stock is up is down, but in the whole long-term trend, there are still a clear path to follow.
2. Once the start of a trend, that is difficult to stop or change. This principle means that when a stock showing the trend up or down will not be generated within a short 180-degree turns, but it should be noted that this principle is purely in terms of market psychology does not apply to a significant negative or bullish news occurs.
3. Unless there is a positive technical indicators appear to confirm, or else should be considered the development of the original trend to continue.
4. Future trend line itself can be inferred. Based on this principle, we can map the line according to the head or the bottom of the extension of the line clearly drawn Quotes may be next trend.
5. In any particular direction of the main trend is often blocked by forces of change in the opposite direction, but the 1 / 3 or 2 / 3 of the magnitude of fluctuations of the whole extension of the trend forecasts will be much affected. In other words, assuming that the rate of increase for some individual stocks for the triple of the stock market, the correction one dollar or even binary, the still rising trend has been reversed should be considered as long as no more than 2 / 3 of the range, should still believe that the whole trend of Quotes of belonging to an increase.
6. Stock horizontal to develop several days or even weeks, you may effectively offset by the strength in the opposite direction. This continued sideways pattern has identifiable characteristics.
7. The trend line deviated from the phenomenon that, with lines arising from the formal inversion, but that does not have the necessity. In other words, this, this principle is quite reliable, but not without exception.
8. Based on Dow theory, inference, stock trends is crucial before the change, there will definitely be funded to identify the forms and shapes. For example, the head and shoulders appeared, and the prices may be reversed; head and shoulders at the end of the formation, the trend will break up.
9. In the line critical moment of change, the turnover of individual stocks will contain specific meaning. For example, the line up Favelle the initial period of time, volume will meet the amplification; line reversal, the volume will shrink along with.
10. The strong stock market, likely to have sustained excellent performance, while the weak stock weakness may continue for some time. We do not need intervention from the main factor in whether to explore this issue, only from the most simple proof of this principle can chase the psychological.
11. In the individual stocks daily or weekly chart chart, you can clearly distinguish between support area and resistance areas. These two regions can be used to confirm the trend will continue to develop or completely reversed. Assume that line has been up break resistance zone, then the stock may continue to rise, once the break down the support area, then the stock may reproduce low.
