To The Moon

Hey, tigers:

Please give a big hand to yourself, because you will finish this course soon.

Today, I will continue to introduce the last step: how to use typical technical indicators.

①K-line

②Technical line

③Risk of using technical indicatorsK-line

In the Tiger Trade APP, you can see a candle chart like this.Enlarge the candle chart, and we call these icons that look like candles: K-lines. A K line mainly includes three parts: body, upper shadow and lower shadow.The body of the candle is the part between the opening and closing prices; The upper shadow is the part above the body, i.e., the thin line above the body; and the lower shadow is the part below the body, i.e., the thin line below the body.

The term "opening price" refers to the price of the first transaction of a certain investment subject after the opening of the stock exchange on each trading day.
Closing price refers to the transaction price of the last transaction of an investment subject before the end of a day's trading activities in the stock exchange.

The highest price refers to the highest price of an investment target in trading from the opening to the closing of each trading day. The lowest price refers to the lowest price of an investment target in trading from the opening to the closing of each trading day.

Technical line

On the basis of the K-line chart, there are many common technical line indicators derived from stock market trading, which can be divided into three categories in general:

①trend technical indicators

The first is trend technical indicators. Such as the most common moving average (MA) and Bollinger Bands (BOLL).

Trend technical indicators are the most basic indicators, which can help us judge the future trend of stocks.Let's take a closer look at the most common moving average indicators. Enter the quotes interface in Tiger Trade APP, click "Pre-Adjustment", click "Indicator", find "Major Chart Indicators", and select MA.

The formula for calculating the moving average is: N-day moving average = sum of N-day closing prices/N. 

For example, if we want to calculate the 5-day moving average price, we should first set the moving average period N to 5 days, and sum the closing prices of the 1-5 trading days of the investment target, divide by 5, we can get the first average point of 5 days; Move back one trading day, then sum the closing prices of the second to sixth trading days and divide by 5 to get the second average point. Repeat the above steps and connect all the average prices into a line to generate the 5-day moving average.

According to the different values of N, we can generally calculate the average line of 5, 10, 20, 30, 60, 120 and 240 days, which represent the short-term, medium-term and long-term trends respectively.

After understanding the principle of the moving average, how should we use it?

You need to know that the core of the use of moving average indicators is that they can simply judge the trend of stock prices and the timing of buying and selling.For example, on the current trading day, if the closing price of the stock is higher than the average price of the past 10 days, it is likely that the stock price will rise in the future; if it is lower than the average price of 10 days, it is likely to fall.

Corresponding to the actual operation, on the current trading day, if the closing price of a stock breaks through the average price within 10 days, you can buy the stock; if the closing price falls below the average price within 10 days, you can start to sell the stock.

This kind of trading strategy that only looks at one moving average is called the single moving average strategy, in addition to the double moving average strategy. We will explain it in the course of Technical Line Indicators in the future.

In the table below, I have listed common moving average strategies for your reference:②shock technical indicators

Let's talk about the second kind of shock technical indicators, such as KDJ, RSI, deviation rate, etc.; The essence of shock indicators is to measure whether stocks are overbought or oversold.

These indicators are just different calculation formulas, different names .In fact, they are much the same, and the effect will not be much different. Here we mainly talk about KDJ indicators.

The KDJ indicator, also known as the stochastic swing indicator, is used to measure the degree of deviation of stock prices from normal levels.First look at its image, as shown in the following figure, the upper part is the K-line chart, and the lower part is the KDJ curve, which is composed of three lines.KDJ index is composed of K value, D value and J value, which are calculated from the daily highest price, lowest price and closing price. The specific calculation formula is very complex, and you only need to understand the meaning and usage of these three values.

K value: indicates the position of the recent closing price in the overall price range;
D value: average the recent K value, which is smoother than the K value;
J value: represents the distance between the K value and the D value.

The KDJ indicator is very sensitive and swings up and down as the stock price changes.

We can judge whether the stock price deviates from the normal range by its swing.

If the swing is too large, it means that the stock price deviates from the normal range excessively, and there may be a reversal trend, which will produce buy and sell signals.

I have listed the common value range of KDJ index for your reference:③Comprehensive technical indicator

After introducing KDJ index, let's look at the third comprehensive technical indicator. Its representative indicator is MACD.The full name of the MACD indicator is the moving average convergence divergence, which is an important indicator reflecting the trend of stock prices. Below is the MACD figure of a stock.

MACD consists of four parts: DIF value, DEA value, MACD value and zero axis

The red line in the figure is called the DIF value. It is the difference between the 12-day short-term moving average and the 26-day long-term moving average. Because DIF value changes more sensitive, so called fast line.

The blue line in the figure is called the DEA value. It is the 9-day moving average of the DIF value. Because of its slow change, also known as the slow line. It should be noted that the period for calculating the moving average is not fixed. The 12, 26 and 9 days used here are the most common values. This value can be changed in the Tiger Trade App.

The red and green column in the figure are called MACD values, which represent the difference between DIF value and DEA value. If MACD value is greater than zero, it is a green column, indicating that DIF value is greater than DEA value at the moment.On the contrary, the red column indicates that the DIF value is less than the DEA value at the moment.

The essence of MACD index is to reflect the cross separation between DIF value (fast line) and DEA value (slow line).

So how should we use MACD indicator?

Let me tell you a few common ways:

Firstly, look at the intersection of the two lines.

DIF value crosses DEA value from bottom to top, forming a cross called golden fork. At this time, the column changes from red to green. DIF value crosses DEA value from top to bottom, forming a cross called dead fork. At this time, the column changes from green to red.

In general, golden fork indicates slowing declines and is a buy signal. A dead fork indicates a slowing rise and is a sell signal.

Second, combine the golden cross and the dead cross with the zero axis to find stronger buy and sell signals.

If the gold cross occurs below the zero axis, it is called subzero golden cross, indicating a slow down and a possible rebound. If a dead cross occurs above the zero axis, it is called zero dead cross, indicating a slow down in the rise and a possible pull back.

If a gold cross occurs above the zero axis, it is called a zero golden cross and indicates a stronger uptrend. If a dead cross occurs below the zero axis, it is called subzero dead cross and indicates a strenghening downtrend.

The golden cross and the dead cross are the most commonly used MACD trading signals for beginners.In the figure below, I have listed the meanings of the common patterns of the MACD indicator for your reference:

The common technical line indicators have been introduced, and the skilled use of the above indicators will allow you to obtain better prices and more profits in the trading market.

③Risks of using technical indicators

It also needs to be emphasized here that although technical trading is a common method in the stock market, technical trading also has its obvious shortcomings: because the drawing of technical lines uses historical data, there are certain trading trends reflected from technical lines. Lag is not necessarily effective in predicting future trends every time.

In addition, many "bankers" in the market will use technical indicators to induce retail investors to enter the market, which can be said to "prejudge your predictions"; therefore, technical indicators are only a means of assisting transactions, and trading purely on technical indicators is very risky.

Be sure to pay attention.