Chapter 2 Trend Quantification on K-line and Time-sharing Chart

比特币大手子-Web3研究院 · 2022-11-03T04:29:23.000Z

Since we have removed all indicators and only have bare K-lines, how should we analyze the continuation and reversal, strengthening and weakening of the trend? Some people may say, technical analysis, market sense! But any technical analysis or market feeling The sense must have a reliable basis and convincing evidence. In this chapter, we will answer this question and discuss the quantification of trends on K-lines and time-sharing charts. 1. Quantification of trend on K line Follow me and continue to share trading knowledge and trading systems😃 When studying the K-line trend, we need to focus on its center of gravity, direction, quantitative continuation or reversal during the consolidation period, and quantitative performance of key points. The evolution of any trend is completed under the action of the center of gravity, thus producing upward, downward and horizontal directions. The research in the horizontal direction is to predict the possibility of continuation or reversal in the future. The quantification of the performance of key points helps us analyze the market trend from another angle.

Now that we have removed all indicators and only have naked K-line left, how should we analyze the continuation and reversal, strengthening and weakening of the trend? Some people may say, technical analysis, market sense! However, any technical analysis or market sense must have a solid and reliable basis and must have convincing evidence. In this chapter, we will answer this question and explore the trend quantification on the K-line and time-sharing chart.
1. Trend quantification on K-line
Follow me and continue to share trading knowledge and trading systems😃
The research on K-line trend should focus on its center of gravity, direction, quantitative continuation or reversal during the consolidation period, and the quantitative performance of key points. The evolution of any trend is completed under the action of the center of gravity, so there are upward, downward and horizontal directions. The research on the horizontal direction is to predict the possibility of continuation or reversal in the future. The quantitative performance of key points helps us analyze the trend of the market from another perspective.
1. Trend center of gravity
The center of gravity in the market is a combination of price and volume, a superposition of the two factors, rather than a simple center of a geometric figure. In a rise with shrinking volume, the trend center of gravity may not catch up with the price. This is a stable and good state, and you can hold it with confidence. It is not too late to close the position when the market center of gravity shifts to the top. With continuous volume increases and a turnover rate of up to 10% per day, the center of gravity is constantly moving up, and the risk is constantly increasing. The emergence of any buying and selling points does not mean that the center of the market has shifted, but that the trend center of gravity has shifted.
(1) What role does the center of gravity play in the cycle of market trends?
①Trend is the direction of market development. The directions mainly include upward, downward and horizontal. The development of trend is accompanied by the shift of center of gravity.
② Any trend in which the market development direction and center of gravity are the same is the main trend; the direction and center of gravity in the trend are a brief rest for the main trend, rather than a change in its direction and center of gravity, which we call a secondary trend; any phenomenon in which the center of gravity of a trend remains unchanged but the direction shifts is called a short-term trend.
(2) Any theory must be combined with practice. In the process of market operation, what use does it have for our operations?
① The formation of any bottom is a process of continuous accumulation of trading volume, some may take a long time, some may be short. No matter whether the bottom price fluctuates violently, the coincidence of the center of gravity and the center is clear and unmistakable.
② The increase in volume and price in the early stage of the market is a benign coordination. The trend is constantly moving forward. A short-term correction may cause the price to stagnate slightly, but the continued upward center of gravity allows us to hold on with confidence.
③As the trend continues to develop, the amplitude and duration of the pullback are constantly increasing, but this is only a secondary trend in the development of the trend and does not change the direction of the market. The shift of center of gravity is always lagging, but this is indeed the safest state.
④ As prices fluctuate at high levels, or as prices consolidate at secondary highs after a correction, the center of gravity and center coincide again, and the risk increases dramatically, making us start to stay away from this market.
⑤ The market always rises slowly and falls quickly. When the trend reverses, the center of gravity begins to move downward sharply and begins to lead the direction of the trend development and the center of the trend. Under the continuous action of the center of gravity, the speed of decline begins to accelerate.
⑥ A short-term consolidation in a downward trend is still unable to resist the downward shift of the center of gravity, and the short-term rebound in prices is just a last gasp before a sharp drop.
⑦ As the downward trend of the market slows down and divergences continue to occur, the downward trend of the center of gravity begins to slow down and coincides with the center of the market again. The quiet market begins to become restless, and the next round of trends may be slowly brewing.
Follow me and continue to share trading knowledge and trading systems😃