Category: Money tips Release Date: 2006-12-31
â–?Shu Yan Cheng 4. Use only the closing price - This is another one gone through the test of time but it was criticized Dow forgotten principle. As the Dow is not a day trader to observe the object based on its line as the base of the system, so relative to its theoretical terms, focusing on the underlying trends in profitability, so in subsequent judgments do not pay attention to any one trading day before the close of the peak and the lowest point of emergence, but only to consider the closing price, that is one trading day between supply and demand balance
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Jin made: In fact, not only in foreign markets, for the simple to the closing price of the trend into existence as a challenge; but on the domestic market, many market transactions, seems to be the closing price one day is not concerned that its existence false. In fact, the trend for the Dow theory, the division though noticeable lag, but very worthy of recognition is that if the closing price taken to confirm the trend of results will often be better than the other charts are displayed. For example, the July 6, 2004 The Shanghai Composite Index closed 1450 points, while the July 19 appeared 1457 points, obviously, July 6 - 7 19 high point of a gradual upward, indicating an upward trend evident, but the combination of power indicators we find that the state power declined, it is clear that for this wave of increase in the magnitude and range of questions on there. And if the ordinary K-line or BAR-line, since July 6 points higher than the 1466 high of July 19 the high point, the inconsistency of this trend can not be fully apparent.
5. Only when the reverse signal clearly demonstrated, it means the end of a trend - based entirely on this principle, the position of Dow Theory.
Market, there is always opportunity to seize the opportunity of victory is rooted in the ability and reflected in the amount of growth in trading on the bill. For aggressive traders, no doubt, is a warning, warning traders not to change its position too quickly and hit the gun on. Of course, this does not mean that the signal when the trend changes have occurred Shihai to do unnecessary delays, but rather describes an experience that is, with the premature buy (or sell) transactions compared with those who are always opportunities to be more patient traders standing on the side. Dow theory, once again reminds us: When a new basic trend of the first to be two kinds of changes in the indices shown, regardless of whether there are any callbacks or intermittent recently, the possibility of its continuing development are the greatest. But with the development of this round of underlying trends, for its ability to extend the speculation that the spread in the market. And therefore once again confirmed that every rise in city (an index to another new high point and the index of a new high point of mutual recognition) are correspondingly the role of a trend tips. When an extended bull market a few months later, bought the desire to buy new stock and can guarantee the prospect of profit than the low round of the early stages of a bull market, people's mentality will hold up and become as wandering, However, the main points in the Dow Theory tells us: "hold your position, until the contrary directive."
Jin made: to understand the time structure of Dow Theory and trading systems to be able to achieve control them was not to kick the tires.
Edited in the gold-line
