1. Relative Strength Index (RSI)
RSI is the relative strength index (relativestrengthindex), which is an indicator to measure the market's rising and falling strength. If the rising force is greater, the calculated index will rise; if the falling force is greater, the index will fall, and thus the strength of the market trend can be measured.
Application of RSI
1. Generally speaking, RSI turns down at a high position as a sell signal, and turns up at a low position as a buy signal.
2. You can sell when the M top appears on the RSI, and you can buy when the W bottom appears.
3. RSI can be sold if there is a top divergence, and you can buy if there is a bottom divergence.
4. RSI falling below its support line is a sell signal, and rising above its resistance line is a buy signal.
5. RSI parameters usually take 5-14. An indicator line with a large parameter has a strong trend but a lagging response, which is called a slow line; an indicator line with a small parameter is sensitive, but prone to erratic feeling, and is called a fast line. If the slow line and the fast line go up together, the uptrend is stronger; if the two lines go down together, the downtrend is stronger; if the fast line crosses the slow line, it is a buy signal; if the fast line crosses the slow line, it is a sell signal .
Bollinger Channel (Bull)
Bollinger Channel is a method invented by Dr. Paulinger to judge the market resistance/support level by standard deviation.
A channel consists of three lines. The middle line is a simple moving average, usually a 20-day simple moving average. The top of the channel is the 20-day moving average plus 2 times the standard deviation, and the bottom of the channel is the 20-day moving average minus 2 times the standard deviation.
If the price is above the moving average, it is a good idea to "sell", conversely, if the price is below the moving average, it is a good idea to "buy".
Traders often use the Bollinger Channel to gain insight into sudden price changes, capture trend changes, identify potential support/resistance levels, and find breakthroughs through the widening and narrowing of volatility.
2. Moving Average Divergence Indicator (MACD)
MACD is a more specific method of using moving averages to find trading signals in price charts. It was invented by Gerald Appel to plot the difference between the 26-day exponential moving average and the 12-day exponential moving average. In addition, the 9-day moving average is often used as a strength trigger line, which means that when the MACD and this line cross downward, this is a downward signal; when the MACD and the 9-day line cross upward, it is an upward signal.
Like other indicators, traders study the MACD indicator for early signs of technical divergence between the technical indicator and the market price. If the MACD is rising and its phase bottom is raising, while the price is still falling to new lows, this could be a strong buy signal. On the contrary, if the MACD is falling and its high point is gradually lowering, but the exchange rate is making a new high, this is a strong bearish divergence and a sell signal.
According to the deviation from the market price, look for market opportunities:
a) When the price continues to rise and MACD continues to fall, it indicates that the buyer's power is weakening, indicating that the market may enter a decline
b) When the price continues to fall, and MACD begins to continue to rise, indicating that the seller's power Weakening, the market may enter an uptrend
Use histograms and market divergences to find market opportunities