Effective trend line breakthrough

When the trend line breaks through the valid mark, the frequency of use in the market is quite high. I have not seen much about the key issues. The most critical issue in the application of the trend line has also been discussed more accurately in many theoretical books. Based on the experience and lessons learned from the market practice, I personally think that three principles must be grasped in practice.

First, the principle of breaking through the closing price:

That is, the closing price breaks through the trend line. Here, we need to explain that the breakthrough is effective based on the closing price, which is much more effective than breaking the trend line at the highest or lowest price in the day.

Second, the 3% breakthrough principle:

This principle is mainly used for identifying medium-and long-term trend line breakthroughs. That is, the farther away from the trend line after the breakthrough, the more effective the breakthrough is. Its basic point is that its closing price should exceed the trend line by 3%. Only when this standard is reached can it be deemed as a breakthrough. Other phenomena are: false breakthroughs!

Third, three days ago:

After the stock price breaks through the medium-and long-term trend line, it must be verified by time. The standard is that the stock price is above the trend line and has been firm for three consecutive days. (And vice versa) after breaking through the trend line, the longer the stay time on the other side of the trend line, the more effective the breakthrough!

 

[Blog supplement]

If it falls below, there is a theory of Three-stick.

1. fall below the latest trend line

2. The point-of-time adjustment below the latest low point

3. fall below ma20 or ma25