The smallest unit of exchange rate movement is the point. If the exchange rate of EUR/USD rises from 1.2250 to 1.2251, then the change is exactly 1 point. The last digit of the foreign exchange quote is the ones of the points, the second last digit is the ten digits of the points, and so on.
The spread is the difference between the bid price (Bid) and the ask price (Ask). The smaller the spread between the bid price and the ask price, the lower the cost for the investor. After long-term trading, the size of the spread has a greater impact on the overall profit and loss of short-term investors, and has little impact on medium and long-term investors. Take the euro/dollar as an example: the bid price (Bid) is 1.4390, the selling price (Ask) is 1.4393, and there is a 3 point spread between the bid and ask prices. If you want to buy EUR at this time, it will be traded at 1.4393, and the profit and loss will show a loss of 3 points, which is -30 USD (3*$10=$30). This $30 loss can be seen as the cost of opening a position. The spread is actually the cost of our transaction.
The point value is the value of a point between the bid price and the selling price when trading forex. Please refer to Forex calculation for details.
Margin refers to the funds paid by the buyer or seller in accordance with the standards stipulated by the trading market, and is used exclusively for settlement and performance guarantee of order transactions.
Used margin = lot * contract unit / leverage
Used margin = lot * contract unit / leverage Used Margin for Gold and Silver = Lots * Contract Units * Market Price / Leverage
The margin for CFD CFDs is fixed
Available Margin = Net Value - Used Margin - Spread
The margin call is specified by the clearing house. When the amount of the member's margin account is short, the margin is required to be maintained at the initial margin level, and the member is required to increase the deposit. The day's equity minus the position margin is the fund balance. If the equity of the day is less than the margin of the position, it means that the balance of the fund is negative, and it also means that the margin is insufficient.
The number of contracts in foreign exchange is also called the contract unit, which is the volume of the transaction itself, which is the amount of money to buy/sell. For example, in foreign exchange, 100,000 contract units are 1 standard lot, also called 100K (K=kilogram), which means that the minimum trading share per sheet is 100,000 base currencies.
STP, full name Straight though processing, straight-through processing, is a bridging method, there is no trader backstage (trader backstage, English is dealing desk, often translated as "trader platform") in which quotes and control market prices (ie There is no market making), all customer orders are passed directly to the liquidity provider (or liquidity provider, ie other brokers and banks), and the bid/ask price is determined by those liquidity providers. The STP platform without the trader's back office directly bridges all order information to the liquidity provider, and the liquidity provides the business with the opposite position of the customer to trade, and at the same time, the position is closed by the subsequent transaction with the other party, in order to obtain profit.
1) Liquidity provision
The ECN trading platform will transfer orders to the ECN liquidity pool, which has a large number of liquidity providers that trade between banks.
The STP platform has its own internal liquidity pool, which consists of a number of predetermined liquidity providers, and only those liquidity providers that have signed an agreement with an STP broker will be there. These liquidity providers offer the best buy/sell prices for orders from the STP trading platform. The better the liquidity, the better the buy/sell price will be, and the lower the spread will be. If there is only one liquidity provider, there is no price competition between the liquidity providers, which is equivalent to just adding a middleman to trade inside.
2) Spread type
Fixed-point spread STP forex platform: The spread is not adjusted based on the minimum buy-and-buy bid price among multiple liquidity providers, and the spread is always fixed. If the STP broker has only one liquidity provider, the role of the liquidity provider is the only counter-party of the trader, in which case the buy/sell price is determined by the liquidity provider.
STP forex platform with floating spreads: Liquidity providers offer the best buy/sell bids, STP brokers choose the best bid price from one liquidity provider, choose one from another circulator The bid price so that you can provide the lowest trading spreads for your customers.
3) Immediate execution or market price execution
Immediate execution means that the order will not enter the market directly and will be processed by the broker first.
市The market price implementation mentions that the order information is sent to the market, and the price is determined by the liquidity provider in the market.
Provide STP brokers with market price execution to provide direct market access for customers DMA (Direct Market Access)
ECN is the Electronic Communication Network (ECN), which makes the orders of ECN users directly anonymously hang on this network. The buying and selling price is all the transactions involved in this ECN environment, including individual investors, small banks, Investment institutions, hedge funds, etc., in accordance with the optimization of price and time, fair and harmonious.
Broadly speaking, the ECN model includes STP bridging. The biggest advantage of ECN is fairness. The true ECN mode is only responsible for delivering customer orders and earning commissions. Customer orders are in this ECN liquidity pool and other. The counterparty trades, and the counterparty may be a hedge fund, a banking institution or a non-banking institution, or other investors. Moreover, because ECN brings together a large amount of liquidity, these liquidity providers will have a bid between them in order to obtain more orders, so that customers can enjoy lower transaction costs, that is, spreads. And instant transactions at the fastest speed. However, the threshold of the ECN account is relatively high, and there are certain requirements for the initial size of the account, the number of transactions, and the transaction volume, which are suitable for institutional investors and large fund accounts.
Expert Advisor is the Chinese translation of Expert Advisor (EA). It can also be translated as “Expert Advisor”, commonly known as Expert Advisor. It is the process of machine trading by computer simulation trader's order operation; computer based on pre-edited trading strategy The program to execute the trade order. The automatic trading strategy mainly includes three elements: order execution, risk management and fund management.
The intelligent trading system is an international financial currency trading system that runs on a specific trading platform. The principle is to write an effective international financial currency trading strategy into a computer program in a special programming language (MQL/Java/C++). The established conditions automatically execute positions and buy and sell, and the outcome of winning and losing depends on the quality of the strategy of the trading system.
The complete trading logic includes: 1, the admission condition judgment; 2, the position condition judgment; 3, the position control; 4, the appearance condition judgment. Traders can write their own trading strategies into EAs, call for various indicators, price loops, historical data comparisons, etc. can be achieved in the EA through programming methods. The computer is much faster than the human brain, so it can quickly trade in some fleeting entry opportunities, greatly improving the quality of trading behavior.
The quality of an intelligent trading system depends directly on the trading strategy set by the trader. A good trading strategy can achieve stable profitability. Even if a loss occurs, it will be controlled within a very small range, and a poor trading strategy may be This will result in huge losses or even bursts in the trading account in a very short period of time. Currently, there are two types of EAs in the market: fully automatic and semi-automatic. Fully automatic EA will execute the trading strategy completely independently, while semi-automatic needs Manually assists in placing orders or closing positions.
Traditional EA is divided into: grid type, trend type, hedging type, arbitrage type
Refers to some independent securities dealers in the financial market, for investors to bear the purchase and sale of a certain securities, buyers and sellers do not have to wait for the counterparty to appear, as long as there is a market maker to bear the counterparty to conclude a transaction . Through this continuous trading, market makers maintain market liquidity and meet the investment needs of public investors. The market maker compensates the cost of the service provided by the appropriate difference in the price of the purchase and sale, and realizes a certain profit.
In essence, the emergence of market makers stems from the imbalance between buying and selling. In a market that lacks liquidity, this difference in time and space leads to the inability of the transaction to be realized because the buyer and the seller do not necessarily appear or trade the same amount of products at the same time. The emergence of market makers has made it possible to trade in demand at different times.
It is characterized by:
1) In the profit model, profit is controlled by controlling the bid-ask spread, and there is no obvious speculation intention;
2) In terms of trading methods, market makers need to provide bilateral quotations to the market, and they do not know the direction of the opponent's buying and selling in advance. It is a passive trading in the market and, to a certain extent, has the effect of stabilizing market price fluctuations;
3) Risk management, due to the light trading, market makers mainly adopt a hedging approach to manage inventory risks;
4) Market-making obligations, if the customer needs to give a quotation at the time of inquiry, the bid-ask spread must be within a certain range, and the minimum amount of trading must comply with the regulations;
5) Liquidity provision, when the market liquidity is lacking or the price fluctuation is severe, the market maker makes the transaction realized by providing the quotation.
According to the coexistence model of the bidding system, the market maker system can be divided into a pure market maker system and a hybrid market maker system. The so-called pure market maker system means that the transaction of a certain product is completely completed by the market maker. The so-called hybrid market maker system means that the transaction of a certain product may be completed through bidding transactions or through market makers, and is a mode in which bidding and market makers coexist.
However, the market makers of the MM model usually classify the customers, resulting in multiple obstacles such as slippage, difficult orders, repeated quotations, etc., and the market makers and customers conduct gambling transactions, usually with a large chance of winning, while transparency is high. It depends on the market maker itself.
The purchase price is the price in the foreign exchange market that is willing to buy a particular currency pair. The trader can sell the base currency at this price, which is on the left side of the quotation. For example, the USD/Swiss franc is quoted at 1.4527/32. The purchase price is 1.4527; that is, you can sell 1.4527 Swiss francs for 1 dollar.
The selling price is the price at the foreign exchange market that is willing to sell a particular currency pair. The trader can buy the base currency at this price, which is on the right side of the quotation. For example, the USD/Swiss franc is quoted at 1.4527/32 and its selling price is 1.4532; that is, you can buy 1 USD for 1.4532 CHF. The foreign exchange selling price is also called the selling exchange rate.
The spread is the difference between the bid price and the ask price.
Exchange rates in the foreign exchange market are expressed in the following format:
Base currency/quote currency Buy/sell price
Base currency/quote currency Buy/sell price Such as: EUR / USD 1.2604/07, GBP / USD 1.5089 / 94, Swiss Franc / JPY 84.40 / 45
Normally, only the last two numbers are displayed. If the selling price exceeds the buying price by 100 points, there will be three numbers to the right of the slash (eg Euro/Czech 32.5420/780). This happens only when the quote currency is very weak.
Liquidity is actually the ability of investors to quickly trade a certain amount of assets at a reasonable price based on the basic supply and demand of the market. Simply put, liquidity is the cost of quickly executing a certain number of transactions. The higher the liquidity of the market. The lower the cost of conducting an instant transaction. In general, lower transaction costs mean higher liquidity, or a correspondingly better price. How to measure liquidity?
Market Depth: The depth indicator is mainly the depth of the quote, which is the number of orders at a certain price (usually the best bid price).
The depth of the deal: the size of the deal, which is an afterthought indicator that measures the number of trades at the best bid-ask price.
Deep improvement: refers to the case where the order is sold at a price equal to or better than the quoted price when the quantity of the order exceeds the quantity on the best bid-ask price.
Turnover rate: The ratio of the submitted orders actually executed in the market. The transaction rate includes three indicators: one is the probability of the entire real-time transaction of the market order and the limit order that is better than the best bid price; the second is the ratio of the order to the total price of the order; the third is the volume of the order when the order part is executed. The ratio. The turnover rate is also a very important indicator for limit orders that are inferior to the best bids.
Forex trading, each transaction involves two currencies, which contain two different interest rates, and the payment or collection of interest is based on the interest difference between the two and the direction of the position. The interest rate is based on the difference between the two countries' currency interest rates. As a basis for calculation, when an investor sells a currency with a higher interest rate/lower interest rate, it needs to pay overnight interest; when the investor has a higher interest rate/sell rate, the currency can be Earn overnight interest. Interest is delayed according to bank practice according to T+2, that is, two banks start counting after workday. See Forex calculation
counting after workday. See Forex calculation Overnight interest = annual interest rate difference / 360 days * 1 bidder contract unit * lot number * exchange rate price (multi / empty) * interest bearing days
Throw risk out to the market or liquidity provider (banking institution)
The scalping transaction refers to a fast-forward and fast-out ultra-short-term trading method, which means that trading investors frequently perform orders and close positions in a very short period of time. Very simple fast forward and fast out of short-term trading. This kind of requirement for investors to make certain accurate judgments on market trends and support resistance levels, and then use high-leverage interest rates to make profits is a mode of profitability mostly based on probability.
The PAMM management model is an abbreviation of Percentage Allocation Management Module, which refers to a kind of customer wealth management account. Investors and account fund managers distribute profits according to the agreed proportion. Investors can use the wisdom and rich trading experience of the PAMM account manager to invest money into the PAMM account, and the account manager uses a centralized management interface to trade on his behalf. The account manager draws a portion of the proceeds from the transaction proceeds as management compensation.
MAM is a multi-account management software that helps professional traders to manage multiple accounts. The MAM account can add an unlimited number of trading accounts, and the distribution mode can be allocated in percentage or asset proportion. MAM account orders can be sold in batches, multiple management accounts can be assigned instantaneously, or all orders can be filled, which is set for the fund manager.
The LAMM management model is an abbreviation of the Lot Allocation Management Module, which means that the money manager has the ability to separately trade different customer accounts and manage them through a single interface, so that the money manager can trade and supervise multiple Account and print reports for multiple accounts without having to log in to each customer account separately. Since the money manager manages each customer's account separately, the margin, profit and loss and rollover fees of different customers will be different. LAMM is a total management account. Customers must sign a Limited Power of Attorney to entrust the trader to manage their trading account with the LAMM account, and the client's account will be placed under LAMM. Each time the LAMM account is placed, you can choose to operate on those accounts under the name and set the amount of operation. Accounts under the LAMM name are read-only accounts and customers are not allowed to trade on their own. Customers can complete the “Revocation of Limited Power of Attorney” to evacuate their account from LAMM, after which the customer can trade their own account.
Position is a market agreement, the initial part of the contract for the sale and purchase, the buyer is long, the position is expected to rise; the selling contract is short, in the hope of falling.
The transaction is expected to fall in the future foreign exchange market, that is, to sell a certain amount of currency or option contracts at the current market price, and then replenish after the price falls.
Traders expect that the foreign exchange market price will rise in the future, buy a certain amount of currency at the current price, and wait for a period of exchange rate to rise, and hedge the portion of the contract at a higher price to earn profits. This method belongs to the transaction method of buying and selling first.
It is neither a long nor a short, which is called parity or flat. If the investor does not have a part, or if all parts cancel each other out, it is called flat.
Any transaction that has not been paid in solid terms or settled in an equivalent or opposite transaction.
The currency position previously bought (sold) is closed by selling (buying) the same currency.
Hedging transactions is an idea. As a trading method, it follows the principle of “market neutrality”. It regards a specific position as a financial vector, and the direction of the vector is open. Hedging transactions are the management of exposure through financial instruments in different directions. Absolute gains under risk exposure management are usually achieved by pairing positions to fit the exposure (arbitrage). The arbitrage space formed by finding the efficiency gap between the market or the commodity is mainly used. By using two or more transactions, the hedging mechanism is used to avoid risks and minimize the market risk. A simple explanation is a transaction in which the profit and loss are offset, that is, a transaction in which two market-related, opposite directions, equal amounts, and profits and losses are simultaneously offset.
Stop loss means that when the loss of an investment reaches a predetermined amount, it will be released in time to avoid a larger loss. The purpose is to limit losses to a small range when investing in mistakes.
Take profit means that when the stock price rises a few percent or rises to a certain price, it will lighten up. In this way, profits can be controlled to a certain height to maximize their own interests.
The extent to which money fluctuates up and down over time.
The currency fluctuates back and forth in a certain interval.
Money fluctuates back and forth in a certain interval.
An important support level for the next step.
Long-term: one month to more than half a year (200 points or more); medium term: one week - one month (100 points to 200 points); short term: one day - one week (30 to 50 points).
The bull market is a long-term one-way market upward; the bear market is a long-term one-way market down.
The bull market is a long-term one-way market upward; the bear market is a long-term one-way market down.
Lightness means that the trading volume is small and the volatility is small; when active, the trading volume is large and the volatility is large.
The value of money has a clear directional development due to news or other factors.
The market is unclear and the range is narrow.
After a rapid rise or fall, encountering resistance or support, it began to move up and down slightly, which is about 15%.
In the general trend of price fluctuations, the reverse market appears in the middle.
When the price falls to a certain location, the fluctuations are not large for a period of time, and the interval is reduced (such as box sorting).
Break through the support or resistance level (generally need to break through 20-30 points).
Suddenly broke through the support or resistance, but immediately turned back
The price at which the sale is expected.
When you hear a certain message, you sell the position, regardless of the price.
The market is a short market, after which it has changed to a long market (into the market or closed); it was originally a long market, and it was sold (sold out) due to news or data (selling in the city or closing the market) or closing the market) .
Originally empty (more) /, but in the afternoon to more (empty) /, and exceeded the opening price
Selling orders on rallies; paying for low prices
After short selling in the foreign exchange market, the exchange rate did not fall and rose, and forced shorts to buy back.
Is one of the methods of margin operation, that is, the number of lots is the same, but the open position
The drifting order means that the order is in a loss state, and it is not timely to stop or close the position, let it float, and wait for the market to look back. This is the biggest killer of the big account, and the killer is still a big hit.
The trader retains the order and buys or sells at a fixed price. The order is always valid until cancelled by the customer.
Buy at the limit price or below the limit price, or sell at the limit price or above the limit price.
A transaction is closed immediately, but the funds are usually completed within two days of the transaction.
According to the exchange difference between the two currencies, the settlement of one transaction is extended to another interest rate.
Currency is a country-customized currency. The eight currencies most commonly traded (US Dollar USD, Euro EUR, JPY JPY, British Pound GBP, Swiss Franc CHF, Canadian Dollar CAD, Australian Dollar AUD, New Zealand Dollar NZD) are called major currencies, all other currencies are called times. Want money. The currency pair is the exchange rate quoted by the intersection of two currencies, for example EUR/USD (EUR/USD).
In the international foreign exchange market, the currency of a country is directly exchanged with the US dollar. It is simple to understand that any direct connection with the US dollar is straight, for example: EUR/USD (EUR/USD), USD/ CAD (US$/CAD), etc.
There is no cross-currency exchange rate quoted in US dollars, that is, not linked to the US dollar, such as EUR/GBP (EUR/GBP), GBP/JPY (GBP/JPY).
The foreign exchange rate (FXRate, Foreign Exchange Rate) is the price of the national currency in another country's currency. If the USD/CHF exchange rate is 1.0022, it means that 1 US dollar is equal to 1.022 Swiss francs.
Refers to the first few digits of the exchange rate. These numbers rarely change in normal market volatility and are therefore often omitted from traders' quotations, especially when market activity is frequent. For example, the USD/JPY exchange rate is 107.30/107.35, but there is no first three digits when quoted orally, only "30/35".
The fixed exchange rate is based on the gold content of the currency and forms a fixed ratio between the exchange rates. This kind of established exchange rate is either regulated by the input and output of gold, or fluctuated within the legal range under the control of the monetary authorities, and thus has relative stability. It is basically fixed, and exchange rate fluctuations are limited to a specified range of exchange rates.
Floating exchange rates (floating exchange rates) refer to the exchange rate of a country's currency according to the supply and demand of the market currency, allowing it to freely rise and fall. Governments and central banks do not impose restrictions in principle, nor do they assume obligations to maintain exchange rate stability. The exchange rate is the floating exchange rate system. Its formal implementation was initiated after the dollar crisis intensified in the late 1970s.
It means that after the basic exchange rate is established, the exchange rate of the local currency against other foreign currencies can be calculated through the basic exchange rate. The exchange rate thus obtained is the cross exchange rate, also called the hedge exchange rate (also called the crossover). Foreign exchange transactions often involve two non-US dollar currencies, while international financial market quotes are mostly quoted from the US dollar to another currency. In this case, exchange rate calculations are required.
Also known as the inter-bank exchange rate, it refers to the exchange rate when inter-bank foreign exchange trading. It is higher than the buying exchange rate, lower than the selling exchange rate, and is generally a middle price between the two. The foreign exchange bank determines the exchange rate to the customer after adding a certain difference to the inter-bank exchange rate. The bank exchange rate is the wholesale price, and the customer exchange rate is the retail price.
According to the definition of exchange rate, it is expressed as the unit of the base currency that can be exchanged for a unit of the base currency, that is, the fixed amount of money under the various price methods is called the base currency, and the currency with the quantity changes is the price of the currency. (Quoted Currency). For example, the EUR/USD EUR/USD quote is expressed in terms of how many US dollars is equal to 1 Euro, so the base currency is EUR and the quoted currency is USD USD.
Also called the price payable, which means that the foreign currency of a certain unit (usually 1) is used as a standard to calculate the quoted price of the national currency. That is, the national currency is used as the list currency, and the foreign currency is used as the base currency. Most countries in the world use the direct price method, for example USD/JPY 113.307, which means 1 dollar = 113.307 yen.
Also called the receivable price, which means that the domestic currency of a certain unit (usually 1) is used as a standard to calculate the quotation of how much foreign currency should be collected. That is, the national currency is used as the base currency, and the foreign currency is used as the list currency. For example, GBP/USD 1.06025, which means 1 pound = 1.06025 US dollars.
Interest rate swap refers to the exchange of fixed interest rates and floating interest rates for two funds with the same currency, the same amount of debt (same principal) and the same term. This exchange is for both parties. For example, Party A exchanges the fixed interest rate for Party B's floating interest rate, and Party B exchanges the floating interest rate for Party A's fixed interest rate. The purpose of the swap is to reduce capital costs and interest rate risk.
Currency swaps (also known as currency swaps) refer to the exchange of two funds with the same amount, the same maturity, the same method of calculating the interest rate, but different currencies, and currency exchange of different interest amounts. To put it simply, the currency swaps exchange money with each other, and their respective creditor-debtor relations have not changed.
There are currently 6 currency warrants on the market, including AUD/USD AUD/USD, USD/JPY USD/JPY subscription card (C) and PIN (P). For example, [email protected], US stands for US dollars, YEN stands for Japanese yen, C is for subscription, if it is a subscription card, it is optimistic about the US dollar, and bearish the yen; the certification card is a bearish dollar, optimistic about the yen. Optimistic about one while representing a bearish one.
The difference between the bid price and the ask price is also the cost of a trade round. A trade round is a buyer (or sell) transaction of the same quantity, the same currency pair, and a sell (or buy) transaction for offsetting. In the EUR/USD example in Table 4.1, the transaction cost is three points. The formula for calculating the transaction cost is: transaction cost = selling price - buying price
Expired delivery is the process of extending the original delivery date of one transaction to another. The cost of this process is determined by the interest rate differential between the two currencies.Using margin to conduct foreign exchange trading can increase your purchasing power. If you have $2,000 in your margin account and the allowed leverage is 100:1, you can buy up to $2,000,000 in foreign exchange, because you only have to pay one percent of the purchase price as a mortgage. . In other words, you have a purchasing power of $2,000,000.
In a foreign exchange market transaction, if you want to buy a product, you must have another person to sell the product at the same time, and the transaction can be achieved. This supply and demand relationship forms a liquidity, and the receiver of the order becomes a counterparty. That is to say, when you make money, the counterparty loses money; when you lose money, the counterparty wins. When the broker becomes the client's counterparty, it is the B-book mode; when the broker's upper-level liquidity provider: medium-sized bank, market maker bank, etc. becomes the customer's counterparty, it is A-Book.
When the broker becomes the client's counterparty, it is the B-book mode; when the broker's upper-level liquidity provider: medium-sized bank, market maker bank, etc. becomes the customer's counterparty, it is A-Book.
Pending order transaction refers to the transaction currency, the amount and the target price of the transaction. Once the quotation reaches or exceeds the price specified by the customer, the customer's order is executed and the transaction is completed. The transaction price is the bank's real-time quotation. It is better than the real-time exchange rate of our bank. Otherwise, it will be sold according to the real-time exchange rate. The pending order is valid on the same day. Before the transaction, the customer can also withdraw the unfilled order. After the customer performs the pending order operation, the amount of the pending order is immediately frozen. This amount cannot be used for payment or other purposes during the day unless the transaction is cancelled.
There are four types in pending orders: buy limit buy limit, sell limit sell limit, buy stop buy stop loss, sell stop sell stop loss.
sell stop: If you think that the exchange rate will drop to the x price level and then determine the downtrend, continue to go down, you can short at the x price, when the price goes to the x price, the system will automatically complete the transaction.
Buy stop: If you think that the exchange rate will rise to the x price level and then determine the uptrend, continue to go higher, you can do more at the x price, when the price goes to the x price, the system will automatically complete the transaction.
Sell limit: If you think that the exchange rate will rise to the x price level and then rebound downward, you can short the price at the x price. When the price goes to the x price level, the system will automatically complete the transaction.
Buy limit: If you think that the exchange rate will rebound after falling to the x price, you can do more at the x price. When the price goes to the x price, the system will automatically complete the transaction.
Slippage refers to a transaction phenomenon in which a transaction or pending order transaction has a difference between the actual order transaction price and the preset price. Because trading through the Internet, there will inevitably be a slippage of investor-server-bank one-time or even multiple price confirmations. At the same time, the lack of liquidity, the volatility of the market, and the release of big data are also the cause of slippage.
Moving Average Convergence Divergence (MACD indicator), also known as the moving average convergence index, according to the construction principle of the moving average, smoothing the closing price of the stock price, and then calculating the arithmetic mean Is a trend indicator.
Homeopathic operation - Golden Fork / Dead Fork
It is chasing up and down, in the long market, Jincha buys, and in the short market, the fork sells.
Reverse market operation
It’s just escaping from the top, selling short at the top, and buying more when you’re away from the bottom.
The Relative Strength Index (RSI) analyzes the market's intentions and strengths by comparing the average closing gains and the average closing declines over a period of time to make future market trends.
1) Limited by the calculation formula, the value of the strength indicator is between 0 and 100, regardless of the price level.
2) Strength and weakness indicators above 50 indicate a strong market, while below 50 indicate a weak market.
3) Strong and weak indicators fluctuate between 70 and 30. When the 6-day index rises to 80, it means that the stock market has been overbought. If it continues to rise, more than 90, it means that it has reached a serious overbought warning zone. The stock price has formed a head, and it is likely to be reversed in the short term. Turn the turn.
4) When the strength indicator of the 6th day drops to 20, it means that the stock market is oversold. If it continues to fall below 10, it means that it has reached a serious oversold area, and the stock price is likely to have a chance to rebound.
5) The overbought value of each type of stock is different. Before we take a buy/sell action on a stock, we must first find out the overbought/oversold level of the stock. As for measuring the overbought/oversold level of a stock, we can refer to the stock's record of strength and weakness over the past 12 months.
6) When the strength indicator rises and the stock price falls, or the strength indicator weakens and the stock price rises, this situation is called “drawback”. When the RSI is at 70 to 80, the price is broken and the RSI cannot break, which forms a “top-down”. When the RSI is 30 to 20, the price is broken and the RSI cannot break. Bottom back."The divergence between this indicator of strength and weakness and the movement of stock prices is usually a signal that the market is about to undergo a major reversal."
Stochastic indicator by George C. Lane was created. It combines the advantages of momentum concept, strength and weakness indicators and moving averages to measure the degree of variation in stock prices from the normal range of prices.
The KDJ indicator considers not only the closing price, but also the recent high and low prices, which avoids the weakness of ignoring the true volatility by considering only the closing price. The stochastic indicator (KDJ) is generally based on the principle of statistics, the highest price, the lowest price, and the closing price of the last calculation period that have occurred in a specific period (usually 9 days, 9 weeks, etc.) and the three The proportional relationship between the two, to calculate the immature random value RSV of the last calculation cycle, and then calculate the K value, D value and J value according to the method of smooth moving average, and draw a graph to judge the stock trend.
The stochastic indicator (KDJ) is calculated based on the highest price, the lowest price and the closing price. The obtained K value, D value and J value respectively form a point on the coordinates of the index, connecting countless such points. It forms a complete KDJ indicator that reflects the trend of price fluctuations. It is mainly a technical tool that uses the true volatility of price fluctuations to reflect the strength of price movements and overbought and oversold, and to issue trading signals before prices have risen or fallen. In the design process, it mainly studies the relationship between the highest price, the lowest price and the closing price. It also combines some of the advantages of the momentum concept, the strength indicator and the moving average. Therefore, it can be judged quickly, quickly and intuitively. Quotes. Since the KDJ line is essentially a concept of random fluctuations, it is more accurate for grasping the short- and medium-term market.
The BOLL indicator is a very simple and practical technical analysis indicator designed by US stock market analyst John Brin based on the standard deviation principle in statistics. Generally speaking, the movement of stock prices always changes within a certain range around a certain value center (such as moving average, cost line, etc.). The Bollinger Band indicator is based on the above conditions and introduces the “share price channel”. The concept, which believes that the price gap of the stock price changes with the magnitude of the stock price fluctuation, and the stock price channel has variability, it will automatically adjust as the stock price changes. Because of its flexibility, intuitiveness and trending characteristics, the BOLL indicator has gradually become a popular indicator in the market where investors are widely used.
Among the many technical analysis indicators, the BOLL indicator is a relatively special type of indicator. Most technical analysis indicators are constructed by quantitative methods. They do not rely on trend analysis and morphological analysis themselves, while BOLL indicators have an inextricable link between the shape and trend of stock prices. The concept of “stock price channel” in the BOLL indicator is a visual representation of the stock price trend theory. BOLL uses the "share price channel" to display various price levels of stock prices. When the stock price fluctuations are small and the stock price is consolidating, the stock price channel will be narrowed, which may indicate that the stock price fluctuations are temporarily quiet; when the stock price fluctuations exceed the narrow The upward trend of the stock price channel indicates that the unusually high upward fluctuation of the stock price is about to begin; when the stock price volatility exceeds the narrow track of the narrow stock price channel, it also indicates that the unusually strong downward fluctuation of the stock price will begin.
Investors often encounter two of the most common trading traps. One is to buy low traps. After investors buy in the so-called low position, the stock price not only does not stop falling but falls continuously; the second is to sell high traps, the stock is in the so-called high After the point of sale, the stock price has risen all the way. The Bollinger Band has specially used Einstein's theory of relativity. It believes that all kinds of markets are interactive. The changes in the market and between the markets are relative. There is no absolute. The stock price is relative. The stock price above the upper trajectory or below the lower trajectory only reflects that the stock price is relatively high or low. Before the investor makes the investment judgment, it must refer to other technical indicators, including price and quantity coordination, psychological indicators, analogy indicators. , related data between markets, etc. In short, the stock price channel in the BOLL indicator plays an important role in predicting the trend of the future market. It is also a unique analysis tool for the Bollinger Band indicator.
The homeopathic indicator is also called the CCI indicator. Its English name is “Commodity Channel Index”. It is used for the judgment of the futures market at the earliest. It is used for the judgment of the stock market and is widely used. Different from the various technical analysis indicators invented by the closing price, opening price, highest price or lowest price of most single stocks, the CCI indicator is based on the statistical principle, the degree of deviation between the introduction price and the average range of the stock price during the fixed period. The concept emphasizes the importance of the average absolute deviation of stock prices in the technical analysis of stock markets and is a relatively unique technical analysis indicator.
Among the commonly used technical analysis indicators, CCI (homeopathic indicator) is the most peculiar. The CCI indicator has no operating area restrictions and varies between positive infinity and negative infinity. However, unlike all other indicators that do not have operating area restrictions, it has a relative technical reference area: +100 and -100. According to the common ideas of index analysis, the operating range of CCI indicators is also divided into three categories: +100 or more for overbought areas, -100 for oversold areas, and between +100 and -100 for oscillating areas, but the indicator is here. The technical implications of operations in the three regions are different from the definitions of overbought and oversold for other technical indicators. First of all, in the oscillating zone between +100 and -100, this indicator is basically meaningless and cannot provide much clear advice on the operation of the market and individual stocks, so it is invalid under normal circumstances. This also reflects the characteristics of the indicator - CCI indicators are specifically designed for extreme situations, that is to say, under normal market conditions, CCI indicators will not work, when CCI scans abnormal stock price fluctuations, seek speed Quick decision, the outcome of the win and loss immediately, the gambling loss must also be closed immediately.
The ADX (Average Directional Indicator) is another commonly used trend measure. Like the Trending System (DMI), Welles Wilder, using the change in long-short trend and the average trend of stock price changes, can reflect the trend of stock price movements, but not Controlling the band's profit level, therefore, the signal frequency is very high and the profit is unstable, which is often used to assist other indicator system operations.
ADX can't tell you where the trend is going. However, if a trend exists, ADX can measure the strength of the trend. Regardless of the uptrend or downtrend, ADX looks the same. The larger the ADX reading, the more obvious the trend. When measuring the intensity of the trend, you need to compare ADX readings for a few days to see if ADX is rising or falling. The ADX reading rises, indicating a stronger trend; if the ADX reading drops, the trend is weaker. As the ADX curve climbs upwards, the trend is getting stronger and stronger and should continue to develop. If the ADX curve falls, the trend begins to weaken and the likelihood of reversal increases. As far as ADX itself is concerned, since the indicator is behind the price trend, it is not a good indicator, and it is not suitable for the operation of ADX alone. However, if used in conjunction with other indicators, ADX can confirm whether there is a trend in the market and measure the strength of the trend.
The momentum indicator, also known as the MTM indicator, is the full name of the “Momentom Index” in English. It is a short-term technical analysis tool that specializes in stock price fluctuations. The Momentum Index aims to analyze the speed of stock price volatility, and to study the various accelerations, decelerations, inertias, and the phenomenon that stock prices change from static to dynamic or from static to dynamic during the volatility process. The theoretical basis of the momentum index is the relationship between price and supply and demand. The price increase of the stock price must be gradually reduced with time, the speed of change slowly slows down, and the market can be reversed. On the contrary, the decline is also true. In this way, the momentum index is calculated by calculating the speed of stock price fluctuations, and the different signals such as the peak of the stock price entering the strong trend and the low point of turning into the weak position become a kind of market measurement tool that investors prefer.
The momentum change of the stock price in the fluctuation can be reflected by the daily momentum point connecting the curve, that is, the momentum line. In the momentum index graph, the horizontal line represents time and the vertical line represents momentum range. The momentum is centered on 0, that is, the static zone. The centerline is the stock price rise zone, and the lower part is the stock price decline zone. The momentum line periodically revolves around the centerline according to the stock price wave, thus reflecting the speed of stock price fluctuation.
Gann Fan, also known as the Gann line, is a common technical analysis tool for domestic investors. However, due to the uniqueness of this tool, some stock analysis software is not well understood. It is undoubtedly a pity that I can't appreciate the powerful market-measuring effect of the Gann line. The angle line is an important part of Gann's theory series. It has a very intuitive analysis effect. The criss-cross trend line provided by the angle line can help the analyst to make a clear trend judgment. Therefore, the angle line is a set of inexpensive and analytical methods that can be easily learned by anyone with little time.
When talking about the meaning of the angle line, Gann declared: "When time and price form a square, the city's operational potential is close to the front." It shows that the angle line is not a trend line in the general sense, according to the concept of time and price two degrees of space. Promote a unique analytical system. Therefore, some analysts pointed out that the angle line is Gann's greatest invention, which opens up the irreconcilable but inseparable pattern of time and price. From an operational point of view, this is even the most valuable part of technical theory.