Principles and calculation methods of bias indicators

20 deviation rate indicator-bias

The deviation rate bias index, also called the Y value, is a technical analysis indicator derived from the moving average principle. It is a technical analysis tool that can be used to analyze stock markets in a short and long-term manner.

Section 1 principles and calculation methods of bias indicators

I. Principles of bias indicators

The deviation rate bias index is a technical analysis indicator derived from the eight rules of the groambo moving average. It calculates and summarizes the extent to which the price deviates from the moving average by using a certain mathematical formula, specifies the timing of buying and selling.
The deviation rate bias indicates the stock price index during the calculation period or the gap between the closing price of individual stocks and the moving average. It is an important supplement to the moving average theory. Its function is to estimate the deviation between the stock price and the moving average during the change process, so that when the stock price changes sharply, the deviation from the moving trend is too far, which may cause a return and rebound.
Bias believes that if the stock price is too far away from the moving average, neither the stock price above the moving average nor below the moving average will remain too long, and there will be a reversal at any time, so that the stock price moves toward the average line again.

Ii. Calculation Method of deviation rate indicators

Because the selected calculation cycle is different, the deviation rate indicators include N days, N weeks, N months, year, and n minutes. It is often used in stock market research to determine the daily and weekly ratio. Although their values are different during calculation, the basic calculation method is the same.
The calculation formula is as follows:
Bias = (closing price of the current day-moving average price of the next day) × n moving average price of the next day × 100
There are many numerical values used for N, and there are two common ones. A value is a number multiple of 5 on the 5th, 10th, 30th, and 60th; one is 6, 12, 18, 24, and 72. However, although their values are different, the analysis method and determination function are not much different.

Section 2 General Evaluation Criteria for bias indicators

The general evaluation criteria for the deviation rate bias indicators mainly focus on the positive and negative conversion of the deviation rate and the value of the deviation rate.
Analysis and determination.

1. Conversion of positive and negative values of the deviation rate

The ratio is positive and negative.
1. If the stock price is above the moving average, it is a positive deviation rate. If the stock price is below the moving average, it is a negative deviation rate. If the stock price and the moving average are at the intersection, the deviation rate is zero. The higher the positive deviation rate, it indicates that the short-term stock price has increased too much, followed by the short-term profit of multiple bulls. Therefore, the pressure on the stock price to rise again increases, the share price may fall under the pressure of short-term profit margins, which may increase. On the contrary, the larger the negative deviation rate, the larger the share price rebound caused by short replenishment.
2. In a highly speculative market and individual stocks, the higher the speculative market, the higher the flexibility of the off-going rate. The off-going rate of individual stocks is more different and changes with stocks.

Ii. Value of the deviation rate

The value of the off-peak rate can be directly used to study the phenomenon of oversold stock prices and determine the timing of buying and selling stocks. Because of the different parameters of the deviation rate period, the market evaluation criteria will also change, but the approximate method is basically similar. Take the deviation rate on the 5th and 10th days as an example. The specific method is as follows:
1. Generally, in a weak market, the stock price's 5-day off rate is above-5, indicating that the stock price is oversold. You can consider buying the stock; when the stock price's 5-day off rate exceeds 5, it indicates that the stock price is overbought and you can consider selling the stock.
2. In a strong market, the stock price's 5-day off rate reaches-10 or above, indicating that the stock price is oversold, which is a short-term buying opportunity. When the stock price's 5-day off rate reaches more than 10, indicates that the stock price is overbought, which is a short-term opportunity to sell the stock.
3. Combined with the actual situation of China's Shanghai and Shenzhen stock markets, when the stock price rises and falls sharply, when the ratio of 10 to 10 is greater than 10, it indicates that the stock price index has already exceeded, you can start to sell shares at an on-demand high. When the off-peak rate on the 10th day is less than-5, it indicates that the stock price index has exceeded, and you can start to accept shares at an on-demand low. For individual stocks, when the 10-day off rate is more than 15 is the time to sell short-term, when the 10-day off rate is less than-10, is the time to buy short-term.

I. Cross between bias lines in different periods

In most stock market analysis software, bias indicators are mainly composed of three bias curves in different periods (generally short, medium, and long. The Analysis and Determination of bias indicators mainly focus on the movement of the three curves in the short, long, and mid-length periods and cross-border conditions. Take the daily bias index as an example. The specific analysis process is as follows:
1. When the short, medium, and long-term bias curves are always centered around the 0-degree line and moving up and down within a certain narrow range, it indicates that the stock price is in a consolidation pattern, at this time, investors should focus on watching.
2. When the short-term bias curve begins to break through the long-term bias curve at the bottom, it indicates that the weak structure of the stock price may be broken, and the stock price will move upwards in the short term. Investors can consider creating a small number of long-term warehouses.
3. When the short-term bias curve breaks through the long-term bias curve and moves up quickly, and the mid-term bias curve breaks through the long-term bias curve, the stock price has started to rise in the long term, investors can increase their efforts to buy stocks.
4. When the short, medium, and long-term bias curves begin to get rid of the narrow range in the early period and move up quickly at the same time, it indicates that the stock price has entered a strong position in the short term and should be firmly held to rise.
5. When the short-term bias curve starts to turn around at a high position after a fast upward movement, it indicates that the stock price has risen too fast in the short term and will begin to be adjusted in the short-term. Investors can sell stocks in the short-term.
6. When the mid-term bias curve also begins to turn down at a high position, it indicates that the short-term rise of the stock price may end, and investors should sell the shares in the middle line.
7. When the long-term bias curve also begins to turn down at a high position, it indicates that the stock price's medium-and short-term rise has ended, and investors should leave the stock.
8. When the long-standing bias curve moves down from a high position at the same time, it indicates that the decline trend of the stock price has been formed, and investors should firmly hold on to the sidelines.

2. Analysis of a single bias Curve

In any stock market analysis software, we can set a bias curve as the main analysis and determination curve. Other bias curve parameters are set to 0, in this way, we can use this curve to analyze and judge the market. Take the bias index on the 12th day as an example. The specific analysis is as follows:

1. Shape of bias Curves
The various forms of bias curves are also an analysis method to determine the market trend and determine the buying and selling opportunities.
(1) When the bias curve forms a reverse shape at the top of the M header or the top three, it may indicate that the stock price has changed from strong to weak, and the stock price is about to drop sharply, so the stock should be sold in time. If the stock price curve also appears in the same form, it can be confirmed that the decline can be determined using M-headed or triplicate theory.
(2) When the bias curve shows a bottom-W or triple-bottom reverse pattern at a low position, it may indicate that the stock price has changed from weak to strong, and the stock price is about to rebound upwards. In this way, the stock can be absorbed in a small amount at a low position. If the stock price curve also appears in the same form, the increase can be determined by the W bottom or triple bottom theory.
(3) In bias curves, the accuracy of m head and triple top shape is greater than W bottom and triple bottom.

2. Use of bias and stock price operation Curves
(1) When the stock price curve and the bias curve rise from the low position, the stock price is expected to rebound or continue to rise in the short term. At this time, investors can buy or hold shares to rise at bargain.
(2) When the bias curve breaks through the 0-degree line from the bottom up and the stock price also breaks through the pressure of the short-term moving average, it indicates that the stock price will rise strongly in the short term, and investors should buy the stock in time.
(3) When the stock price curve and the bias curve fall from a high position, it indicates that the stock price will form a head or continue to fall in the short term. At this time, investors should sell stocks or hold coins on a regular basis.
(4) When the bias curve broke the 0-degree line from top to bottom and the stock price also fell below the support of the medium-and long-term moving average, it indicates that the stock price has started to fall in the long term and investors should wait and see in a timely manner.
(5) When the bias curve begins to fall down from a high position, the trend of a peak is lower than a peak, while the stock price curve is still slowly rising, forming a trend of a peak to a peak, it may mean that the stock price trend has a "Top deviation" phenomenon.
(6) When the bias curve starts to rise from the low position, the base-to-bottom trend is higher, while the stock price curve is still falling slowly, forming a bottom-to-bottom trend, it may mean that the stock price trend shows a "bottom deviation.

Iii. Analysis of different types of stock market Software

Currently, bias indicators have two different analysis interfaces in China's typical stock market analysis software, Qian Long and analysts. Therefore, bias indicators have different analysis methods on these two types of analysis software.

1. Analysis and Determination of bias indicators on analytics software
In analyticdb, bias indicators are mainly composed of three bias curves in different periods (generally short, medium, and long. The Analysis and Determination of bias indicators mainly focus on the movement of three curves in a short length and cross each other. The specific analysis method has been discussed above and will not be detailed here.

2. Analysis and Determination of bias indicators on Qianlong Software
In the Qian Long software analysis system, both the research and Determination of bias indicators in the dynamic system and the analysis and determination of static systems are the same, and they are from different periods (generally short, medium, and long) the bias curve and the biasma curve are composed of four curves. The bias index analysis and determination mainly focus on the movement direction and crossover of the four curves. In order to make the market more simple and clear, investors can use only two curves (one bias curve and one biasma curve or two bias curves of different periods) to study and judge the market. Take the daily bias index as an example. The detailed analysis steps are as follows:
(1) When the short-term bias curve begins to break through the biasma curve from the bottom up, it indicates that the weak stock price is coming to an end and investors can buy stocks at a low price.
(2) When the mid-term bias curve also begins to break through the biasma curve from the bottom up, it indicates that the weak stock price has ended, and investors can gradually increase their positions.
(3) When the long-term bias curve also begins to break through the biasma curve from the bottom, it indicates that the strong rise of the stock price has started and investors should buy all the shares in time.
(4) When the short, medium, and long bias curves break through the biasma curve, the three curves start to move up at the same time, indicating that the stock price has entered a strong upward growth stage, and the investment should be firmly held to rise.
(5) When the short-term bias curve begins to break down the biasma curve from the top to the bottom, it indicates that the strong stock price is coming to an end and investors can sell stocks at a high price.
(6) When the mid-term bias curve also begins to break down the biasma curve from the top to the bottom, it indicates that the strong rise of the stock price has ended, and investors can start to clear the stock and wait and see.
(7) When the long-term bias curve also begins to break down the biasma curve from the top, it indicates that the weakness of the stock price has started, and investors should sell all the remaining shares in time.
(8) When the short, medium, and long bias curves break down the biasma curve, the three curves start to move downward at the same time, indicating that the stock price has entered the medium-and long-term weak decline stage, investment should be determined by currency.
(9) When the short, medium, and long bias curves are always moving below the biasma curve, it indicates that the stock price is in a weak position to sort out the market, and investors should also hold the currency to wait and see.

Section 4 practical skills of bias indicators

The practical skills of bias indicators mainly focus on the intersection of different cycle curves of bias indicators, as well as the position and Operation direction of bias curves. The following uses the bias index with the daily parameter (5, 50) of analyticdb as an example to reveal the sale and wait-and-see functions of bias indicators.

I. Sales Signals

1. When the bias curve on the 5th day and the bias curve on the 50th day are fixed in a narrow range near the 0-Value Line, once the bias curve on the 5th day breaks through the bias curve on the 50th day to form a "golden cross, this indicates that the strong upward trend of the stock price begins to take shape, and the stock price will rise sharply. This is a medium-and short-term buy signal indicated by the bias indicator. This purchase signal is more accurate, especially when the stock price is higher than the stock price average. At this time, investors should promptly buy stocks at bargain hunting. (5-1.
2. When the bias curve on the 5th day and the bias curve on the 50th day are resized in a narrow range near the 0-Value Line, once the bias curve on the 5th day breaks through the bias curve on the 50th day to form a "dead cross, at the same time, when the stock price falls below the medium-and long-term average, it means that the decline of the stock price begins to take shape and the stock price will fall sharply, which is a medium-and long-term sales signal indicated by the bias indicator. At this time, investors should promptly sell shares. (5-2.

Ii. Currency Ownership Signal

3. When the 5-day bias curve exceeded the 50-day bias curve in the vicinity of the 0-Value Line, the stock price also runs upwards based on the medium-and short-term moving average, which indicates that the strong rise of the stock price remains the same, the stock price will continue to rise, which is a signal that the medium-and short-term shareholding is about to rise as indicated by the bias indicator. At this time, investors should hold shares all the way. (5-3.
4. When the 5-day bias curve breaks through the 50-day bias curve in the area near the 0 value line, the stock price is also squashed by the medium-and long-term average, this means that the weak market price of the stock price will continue to fall, and the stock price will continue to fall, which is a wait-and-see signal indicated by the bias index. At this time, investors should firmly hold on to the coin.