Capital Hunting for Growth: Investors Will Regret Not Learning - Deng Xiaochen

Don't fantasize about every transaction always being round and fulfilling. Profit and loss need to be balanced, and gains and losses also need to be felt. Investing in the market is like traveling, always in a hurry, with so much confusion and confusion.

A very simple and practical design of the standard deviation principle for Bollinger index statisticsKLine technical analysis indicators. Due to its flexibility, intuitiveness, and trend, the Bollinger index has gradually become a popular indicator widely used by investors in the market.

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The three tracks of "up", "middle", and "down"

The composition of the Bollinger index mainly consists of three Bollinger trajectories, which we refer to as upper, middle, and lower trajectories. Three tracks together form oneKThe channel for fluctuations in line prices. The upper and lower tracks of the price channel are the highest and lowest prices that display the safe operation of market prices.

(The yellow line, white line, and purple line in the figure represent the upper rail, middle rail, and lower rail, respectively)

Generally speaking, when the price runs above the middle track of the Bollinger Line, it indicates that the market is in a strong trend; When the market price moves below the middle trajectory of the Bollinger Line, it indicates that the market is in a weak trend.

The upper rail isKThe pressure line of the line trend, with the downward trend as the support line, whenKThere will be some resistance near the upper and lower tracks of the line, and there is a high possibility of a reversal in the market trend. It is not difficult to see from the graph that many rising prices are hindered and falling on the upper track, while falling prices are also supported and rebounded on the lower track.

How to judge the trend

1When the upper, middle, and lower trajectories of the Bollinger Bands run upwards simultaneously, it indicates that the market's strong characteristics are very obvious and will continue to rise in the short term. Investors should choose to go long.

2When the upper, middle, and lower trajectories of the Bollinger Line run downwards simultaneously, it indicates that the market's weak characteristics are very obvious and will continue to decline in the short term. Investors should choose to short.

3When the upper track of the Bollinger Line is running downwards, while the middle and lower tracks are still running upwards, it indicates that the market is in a consolidation trend. If the market is in a long-term upward trend, it indicates that the market is a strong consolidation in the upward trend, and investors can hold long for the rise or buy long on dips; If the market is in a long-term downward trend, it indicates that the market is a weak consolidation in the downward trend, and investors should mainly hold short to wait for the fall or short when the market is high.

4The upper trajectory of the Bollinger Line runs upwards, while the possibility of the middle and lower trajectories running downwards simultaneously is very small. The principle of judgment is similar to the previous rule.

5When the upper, middle, and lower trajectories of the Bollinger Line are almost simultaneously running horizontally, we need to judge based on the current market trend. We believe that this is a calm period in the market, and there are often some unilateral breakouts at the end.

In addition to the above situations, Bollinger tracks can also be further refined into many small forms, which will not be listed one by one here. This requires everyone to pay attention to and accumulate in their daily lives.

Bollinger track andKDJThe coordinated use of indicators

We should know,The upper rail in the Bollinger Line has a pressure effect,The middle and lower rails have a supporting (pressure) effect, When the price drops to the middle or lower range of the Bollinger Line,You can ignore itKDJTake action based on the signals emitted by the indicators. of course,IfKDJThe indicators have also reached a low level,So it should be regarded as the result of mutual verification between short-term trends and medium-term trends, Thus adopting a more proactive operational strategy.

It should be noted that,When the price drops below the Bollinger Line,Even if supported and stabilized,KDJThe indicators have also increased synchronously,The signal for trend turning has been sent out,So at most, we can only grab one rebound. WhenKDJ Indicators moving up80At high position,It is safer to take a selling action,Because when the stock price falls below the middle track of the Bollinger Bands, it will cause the opening of the Bollinger Bands to narrow,At this point, repairing the indicators requires at least a long period of consolidation,So, regardless of preventing downside risks,Or from the perspective of considering the opportunity cost of holding,It is not advisable to continue holding.

As shown in this figure,KDJThe indicator showed a bullish signal, with the Bollinger Bands moving upwards and then opening up, resulting in a rapid unilateral breakthrough in prices.

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The above content is for reference only. Investment carries risks, and caution is required when entering the market. If the operation of hedging and locking orders is not ideal, please communicate with me.

Author: Deng Xiaochen