1, Five-Wave Trend: Also known as Eliot's wave theory, it is believed that the market trend consists of five rising or falling waves. Among them, waves 1, 3 and 5 are trend waves, and waves 2 and 4 are reverse waves. This waveform can help analysts predict future market trends.
2. Three-wave trend: also known as wave adjustment theory, it is believed that the market trend consists of three rising or falling waves. Among them, wave 1 and 3 are trend waves, and wave 2 is reverse wave. This wave pattern usually appears in the middle of the trend, forming a short-term reversal.
3. Inverted hammer and hammer: Inverted hammer is a reverse signal in the downward trend, with a long shadow line and a small entity, indicating that the buyer's strength is increasing. Hammer is a reverse signal in the upward trend, with long shadow line and small entity, indicating that the seller's power is weakening. These two forms usually appear at the top or bottom of the trend.
4. Cobra form: Cobra form is a form in the volatile market, which consists of two parallel trend lines. This pattern usually appears in the process of market callback or rebound, indicating that the market is sorting out and differentiating.
Waveform characteristics:
1. Reflects the market psychology: the wave shape reflects the psychology and emotions of market participants through the shape and structure displayed by the price trend. It can reveal the buying and selling power of the market, the relationship between supply and demand and the behavior pattern of investors.
2. Trend identification: Wave shape can help identify market trends, including upward trend, downward trend and lateral shock. By observing the formation and development of waves, investors can judge the overall trend of the market and make trading or investment decisions according to the trend.
3. Turning point prediction: Wave shape is also widely used to predict the turning point of the market. For example, when the market forms a specific wave structure and proportion, it may indicate a greater possibility of reversal. This is valuable information for investors and can help them buy or sell at the right time.
4. Strict rules: The analysis of wave forms is based on certain rules and proportions, such as the five-wave and three-wave structures in Eliot's wave theory. These rules make the analysis of waveform reliable and accurate, and help investors to better understand the market trend and predict the future trend.
5. Combined with other technical indicators: Although the waveform itself can provide useful information, it is more reliable to combine other technical indicators and analysis tools for comprehensive analysis. For example, trading volume analysis, moving average and other indicators can be combined with wave patterns to enhance the judgment and prediction of market trends.