The legendary woman who was reborn from the ashes

Chapter 18 The most valuable bottom-picking signal in a bull market

The classic book "Rich Dad" says that when poor people sell their time for money, they are actually "selling their lives". When poor people complain that they have no money, they actually do not realize that investing in their brains is the fastest way to get out of poverty and become rich.

The poor can invest in their own brains, learn from the experiences of successful people, make them their own, and quickly create their own wealth. This is the fastest way to get out of poverty.

Investors all want to make money in the stock market, but as an investment, there must be losses if there are gains, and the proportion of losses is often relatively large.

Some investors may think that making money in the stock market is nothing more than buying low and selling high, and then repeating the operation to make continuous profits. This seems to make sense and is correct. However, actual trading is not like this.

In the stock market, everyone wants to find a way to buy stocks that will definitely rise. How can we really find a way to definitely rise? We can only analyze and judge to a certain extent and operate under the premise of ensuring the best possible success.

When Jiang Juan first entered the market, by the time she smelled the scent of a bull market, the market had already risen a lot. She felt annoyed and frustrated. Sometimes the feeling of missing out is more devastating than being trapped.

Jiang Juan always has an extraordinary dream in her heart, and eventually becomes a legend in the stock market.

Jiang Juan has always been curious about and yearning for the stock market. She has heard of many stock market heroes who have opened up many roads to wealth in the stock market with wisdom and courage. When Jiang Juan first entered the stock market, she was determined to become a hero like them, to change her own destiny, and to let her family live a happy life.

However, the stock market is not as simple as imagined. Jiang Juan encountered many difficulties when she first entered the stock market. She kept learning and exploring, but she could never find the way to success. Just when she was confused and hesitant, a trading veteran appeared in front of her.

The predecessor told Jiang Juan that there is a mysterious money-making opportunity hidden in the stock market. This money-making opportunity lies in the lower leads. Only by interpreting the mystery of the lower leads can one truly master the rules of the stock market.

Jiang Juan was deeply attracted by the words of her predecessor and decided to learn the skills of interpreting the lower lead from her predecessor. Under the guidance of her predecessor, Jiang Juan began to study the historical data of the stock market in depth to find the law of the lower lead. She studied and practiced day and night and gradually realized the secret of the lower lead.

After a wave of market decline, many stocks have shown the K-line pattern of the lower lead. According to traditional technical analysis theory, the lower lead often means that the decline is coming to an end and the last energy of the short position has been released, which is one of the typical bottoming signals.

The upper shadow line represents selling pressure, which is the embodiment of pressure; the lower shadow line represents buying, which is the embodiment of long positions, and also indicates the scope of short-side testing. It represents the solid support of long positions and the victory of the last defenders.

The appearance of the lower lead is basically the beginning of a reversal from a morphological perspective.

The lower part of the lower shadow is the part of the short-side suppression during the trading session. The longer the lower shadow is, the deeper the suppression by the short-side. However, it is recovered by the long-side at the close of the day, indicating the strong resistance and support of the long-side.

Which positions are likely to produce K-lines with long lower leads?

1. In the process of stock price decline, since the bears occupy the absolute initiative in the market and the bulls are unable to fight back, K-lines with long lower shadows rarely appear at this stage.

2. During the rising process of stock prices, since the bulls have the absolute initiative in the market, the bears cannot significantly suppress the stock price, so K-lines with long lower shadows rarely appear in this stage.

3. K-lines with long lower leads will often appear only when prices have fallen continuously or the stock price has risen to a stage high.

If a bullish candlestick with a long lower shadow appears at a low level, it indicates a signal that the market has bottomed out or is not far from the bottom. If a bullish candlestick with a long lower shadow appears after trading sideways at the bottom for a long time, there will usually be a wave of increases in the future.

In the low range after the price has fallen continuously, if the stock closes a K-line with a lower lead, investors should pay attention to it. The longer the lower lead, the greater the value of the investment.

On the trading day when the lower shadow is formed, although the bears pushed the stock price down, the bulls' strong counterattack pulled the stock price back. Such a K-line shows that the bulls have enough ability to compete with the bears at the current position.

The changes in the K-line of a day initially reflect the power balance between the long and short sides. This internal change is very worthy of attention. However, as the market environment becomes increasingly complex, the effectiveness of this single K-line pattern is also difficult to understand in the changing environment.

Therefore, investors should be reminded that after seeing the lower lead, they cannot rely solely on a single traditional technique to conclude that the decline has ended and that the market has entered the bottom area. They need to combine other technical indicators to conduct a multi-dimensional analysis in order to improve the accuracy of their judgment.

The K-line pattern is the most common technical pattern in stock technical analysis. The daily K-line trend of the stock price reveals the stock's trend changes on that day. The stock price shows the long-term change pattern of the stock price in the continuous K-line pattern trend chart.

From this point of view, the K-line pattern well explains the rise and fall of stock prices, so we must learn to find the starting point of stock prices in the K-line pattern.

However, as the market environment becomes increasingly complex, the effectiveness of this single K-line pattern is also difficult to determine in the changing environment. Generally speaking, the lower lead is the last sell-off of the shorts, while the longs enter the market to support the stock price.

However, after seeing the lower lead, investors cannot rely solely on traditional technology to think that the decline has ended. If they combine other technical indicators to conduct a multi-dimensional analysis, they can improve the accuracy of their judgment.

With the cooperation of trading volume, if the previous trading intensive area is broken through, the bottom will be very solid, and its accuracy and stability will be more reliable.

The following leads are the standard bottom signal combined with the effective bottom divergence structure of the MACD indicator, the accuracy and stability of the market launch will be greatly improved.

The bottom divergence of the MACD indicator in the long period combined with the long lower lead of the K-line is the most valuable bottom-picking signal in a bull market.

Case 1, Tianfu Communication. On April 2022, 4, the weekly MACD bottomed out. At that time, the price of the lower lead K line was 29 yuan. After 18.45 weeks of upward fluctuations, the increase was 59%, and the highest price reached 580 yuan.

Case 2, Xinchangsheng, on October 2022, 10, the weekly MACD bottom diverged. At that time, the price of the lower lead K line was 14 yuan. After oscillating upward, the 20.02-week increase was 33%, and the highest price reached 338.9 yuan.

(The above cases are past tense and are not investment advice)

There are many such cases, and investors must strictly follow all conditions when choosing these stocks.

As time went by, Jiang Juan's performance in the stock market became more and more outstanding. With her unique insights into the down-leads, she successfully predicted the trend of the stock market and earned huge profits. Then her name gradually spread in the stock market and she became a legend.

However, Jiang Juan was not satisfied with this. She knew that there were risks and opportunities in the stock market, and only by continuous learning and improvement could she be invincible in the stock market. So Jiang Juan decided to write her experience and insights into a novel to share with future generations.

To sum up in one sentence: the rate of return comes from financial management ability, and financial management ability is the key to determining the final value of compound interest.

Work hard and treat everything with your heart, whether it is studying, working or living. The world will also prepare to reward you with its heart.

If you are not destined to win by doing nothing, then stand up and run. We do not have the ability to emerge out of nowhere, but only the efforts that are not known to others. Every second you waste now is making way for others.

What can really support you is a rich reserve of knowledge, sufficient financial foundation, a continuously stable emotion, a controllable pace of life and the invincible self.

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