1, rising trend

It consists of a series of rising trends, each rising trend continues to cross the previous high point, and the downward trend of the intermediate inclusions will not fall below the low point of the previous wave. In short, the upward trend is composed of a series of increasing price trends.

2, the downward trend

It consists of a series of declines, each of which continues to cross the previous low point, and the rebound trend in the middle will not cross the previous high point. In short, the downward trend is composed of a series of price trends with low points and high points falling continuously.

Four stages of the market

Any market must be in one of four technical stages:

1, accumulated and bought by long-term investors;

2, distribution, long-term investors sell;

3. An upward or downward trend;

4. Consolidation refers to the adjustment after profit taking in the confirmed trend.

In other words, if the market has no trend, it is in a narrow consolidation state, usually lasting for two or three weeks or longer, with a fluctuation range of about 5%.

Market Significance of Narrow Finishing

Narrow consolidation usually occurs at the top or bottom of the medium-term market. At the top of major markets, long-term investors try to clear (not a lot of) portfolios for a period of time, and don't want to drive down prices significantly. Because the bullish speculative atmosphere in the market was still quite strong at that time, they could ship in batches and transfer their chips to traders and speculators. Therefore, in a few weeks or longer, the price will fluctuate within a narrow range, with no obvious upward or downward trend, forming a narrow consolidation trend. Finally, when the market knows that the price will fall, it is often an excellent time to short below the lower limit of the narrow finishing range.

The same thing often happens at the bottom of major markets, but in the opposite direction. When the price fell sharply, wise long-term investors thought that the price at that time had long-term investment value, so they began to open positions on a large scale. Maybe it's for a trial offer, or maybe they don't want to raise the price. They have been selling silently for weeks to months, and the result will be a narrow consolidation trend. Finally, when the market knows that the price will rise, it will break through the upper limit of the narrow finishing range-the ideal time to do more.

In addition, there will also be a narrow consolidation in the middle of the confirmed major trends. This may be due to one of the following reasons: when the price trend (up or down) is quite steep and many traders and speculators take profits, it will cause a temporary pause in the trend, which can be called "consolidation"; In other words, the market's uncertainty about future development and divergent views keep the price at a relatively fixed price. This situation can be called "waiting for the market".

Relationship between trend and volume.

In the overbought market, prices are mainly driven by feelings, hopes and expectations, not based on reasonable economic judgments and value considerations. In this case, people who have clear information have left the market, and the enthusiasm of the general participants will gradually cool down. The market has the conditions of panic, as long as there are some signs, it is enough to trigger layers of selling pressure. Therefore, in the overbought market, there is usually a phenomenon that the price rises and falls.

Similar reverse reasoning also applies to oversold situations. When the oversold market develops to a certain stage, because the price is obviously low, savvy investors begin to buy and sell at a low level. There is a rising hope and expectation in the market for the future. With a little stimulation, the price will soar upward in the case of large turnover.