If you want to make a profit, you don’t just need to find a trading system to use. If you only know one trading system, you can’t build enough trust with the trading system, that is, you can’t form trust if you don’t understand the principles. It's like building a tall building on flat ground. It can be beautiful when the wind is sunny, but when the wind and rain come, the building will collapse because there is no foundation. Many people may be very successful in trading. They have made profits in 9 out of 10 trades, and their self-confidence continues to expand. As a result, the last 9 trades have lost all the previous 9 profits. Because for all markets, falling is far easier than rising. For example, if the stock price rises from 10 yuan to 20, it needs to rise by 100%; while falling from 20 yuan to 10 yuan only needs to fall by 50%. Therefore, if you do not have a solid foundation in the market to grasp your own technology, even if the previous order is very smooth, as long as you encounter strong winds and waves once, it is enough to make you lose all the previous profits. The way to avoid this situation is very simple: let your basic skills be solid, only with a solid foundation can you build tall buildings.
There are many usages of the moving average. For example, the above-mentioned use of the 30-day moving average to judge whether the current trend is rising or falling is just one usage. It can understand the market trend, pressure support, reversal entry signal, etc. But pay attention, it is not because it is a moving average that it is a pressure or a support. For the moving average, since it can be used as a support, there is a reason for it.
Taking the 1-day moving average as an example, we can see that the moving average is connected to the closing price position of each day, that is, the 1-day moving average is connected to the closing price of each day. The closing price of the 1-day moving average means assuming that today A enters the market in the morning, B closes the market at noon, and C closes the market in the afternoon. For a daily K-line, there are countless people entering the market that day. For the average price of entering the market, it is very troublesome to add the prices of all people and then divide it by the total number of hands. Therefore, the moving average simply uses the closing price of the day as the holding cost of the day. The 2-day moving average is obtained by adding the closing prices of the two days and dividing by 2. In the same way, the 5-day moving average is to add the closing prices of the past 5 days and divide by 5 to get the average holding cost of buyers in these 5 days. If the current K-line is below the 5-day moving average, it means that the long sellers in the market are locked up, and the short sellers have already started to make profits. In the sideways market, the price keeps fluctuating around the price, that is, those who buy on the 5th will make a profit and lose money at one time. Increased difficulty: the moving average can act as a pressure support. For example, in a falling market, the K line will fall when it reaches the 5-day moving average many times. The 5-day moving average forms pressure above the current K-line, that is, all the purchases in the previous 5 days are locked up. The 5-day moving average represents a 5-day lock-in cost. The closer to today's buy, the lighter the cover. When a speculator pulls the price back to the original line and the price is close to the original price of the locked-in person and there is no upward momentum, they will inevitably choose to close their positions and leave the market. This is the root cause of the pressure on the 5-day moving average. In addition, there is another knowledge to understand: there are long and short forces in the market. If you want to know the current direction, when the stock price reaches the 5-day moving average, which is the average holding cost of the lock-in person, if the market is favorable and good, do it in the market. More willingness is more, someone will buy enough chips at all costs at the moving average position, and eat up all the selling orders of the lock-ups. When this happens, the price will inevitably rise. However, if the longs at the bottom are not strong enough and their self-confidence is not so strong, when the stock price reaches the average hold-up cost, everyone will be selling, and there will be no more desire to go long, and the stock price will inevitably fail to rise. Take the vegetable market as an example. Everyone is selling vegetables. Suddenly, one person comes to sell strawberries. Many people want to buy strawberries to eat. There is only one strawberry. Whoever has the highest price will sell it to whoever sells it. The seller decides the price. market. Later vegetable sellers found out that selling strawberries made money, so they all started selling strawberries. As a result, too many people sold them, but there were still so many people who bought them. The sellers were afraid that the strawberries would be damaged if they could not be sold, so some people lowered their prices, and others followed suit. buyer market. That is, if the supply is low and the demand is high, the price will naturally rise; and if the supply is low and the demand is high, the price will inevitably fall. as if the market fell
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