The moving average is just a tool that follows the price change and lags behind the price trend. When you can directly obtain information through the price trend and judge the market trend through the price trend, then you don't need the MA tool. For example, Dow Theory's definition of trend. The highs kept making new highs, and the lows kept rising. By observing the high and low points of the price, the current trend can also be judged.
If you use one sentence to understand the principle of support and resistance in the trading market, it is the "support and resistance formed in the market" in the PPT above.
For example, when many funds in the market are concerned about a key high point in the early stage of a large-scale cycle. Long orders are closed according to this position, and short orders are shorted according to this position. The operation of the order made the price reach the previous high point again, and the price reversed and fell.
This is the anchoring of funds in the market to a position, and there are orders based on this position, which leads to price changes.
Does a moving average serve as support and resistance?
What we need to see is whether most of the funds participating in the market are operating with orders based on this moving average, so that when the price reaches the moving average, there will be a price reversal and a market will start.
Therefore, assuming that a moving average really has the function of support and resistance, when the price reaches the moving average, there will definitely be actions of capital orders. The action of the order will affect the price change.
If the price reaches the moving average and there is no such price change, it can only mean that the funds in the market are not trading according to this moving average, or that there are not enough funds to trade based on this moving average.
Of course, it will also happen that a certain variety is in it for a period of time, and it completely fits with a certain moving average. Every time it reaches this moving average, it will receive support and start to rise, which shows that during this period of time, the funds participating in the market recognize the support and resistance of this moving average. However, when trading with moving average support and resistance, to understand the principle of support and resistance, there is an important step to go through, which is verification.
See if the market funds have always recognized the support and resistance of a certain moving average during this period of time, and whether there will be a price reversal when the price reaches the moving average. If there is no verification of the price trend, then the support and resistance will be impossible to talk about.
After understanding the function of the moving average, when using the moving average as your own analysis tool, you must fully understand the principle of the indicator, think carefully, and understand the advantages and disadvantages of a tool before you can apply it to the right place.
The price trend in the past period of time determines the trend of the moving average. Price fluctuations will cross the moving average up and down. If the price continues to rise, the moving average will slope upward. A longer period of continuous rise or a short-term sharply rising moving average will appear. Long arrangement.
Then think about what is not lagging? For example, during the market break, you know that macro indicators such as the US CPI appear, or some favorable policies are introduced. They are ahead of the stock market.
Enlightenment: As a leader or manager, a subject or a knowledge, master the most basic principles and the latest industry use, why use it, and the middle 10%~90% belong to the band of industry practitioners. It can be handed over to other partners. As far as stock transactions are concerned, although you are interested, you don't have that much energy, so master the basic theoretical knowledge to understand the market, and then refer to industry leaders or macro indicators to conduct transactions.