Grabbing ** is a skill that many traders want to learn Xi. It can help us to make more profit at a lower cost after the stock price**.
Principle
The Bollinger Bands indicator uses the statistical concept of probability to determine the end of the rise and fall of the stock price. It consists of three lines:
Midline: Represents the average cost or average ** of the stock price.
Upper channel line: The middle line plus two standard deviations.
Lower channel line: The middle line minus two standard deviations.
According to the principle of Bollinger Bands, there is a 95% probability that the stock price will fluctuate within the channel. When the stock price falls outside the lower band line, it means that the stock price has overfallen, and there is a 95% probability that it will**.
The KD indicator uses the ** price and opening price of the stock price to calculate the momentum of the stock price. It consists of two lines:
*: Represents short-term momentum.
D-line: represents long-term momentum.
According to the principle of the KD indicator, the ** and D lines will form oversold below 50 and overbought above 70. When ** breaks through 50 from the oversold state, it means that the short-term momentum begins to strengthen, and there is a high probability that it will**.
How it works:
According to the principle of Bollinger Bands and KD indicators, we can summarize the following methods of operation:
When the stock price falls outside the lower band line, it means that the stock price has overfallen.
Breaking through 50 from an oversold state means that short-term momentum is starting to strengthen.
Wait for ** to break through the lower channel line, which means ** officially begins.
The stop loss is set at the low of the lower channel line.
Case study
Here are two examples of grabbing ** using the Bollinger Bands and KD indicators:
Example 1
The chart is the trend chart of Taiwan stocks Yanzhou.
On July 20, 2023, the stock price fell outside the lower band line, indicating that the stock price has overfallen.
On July 21, 2023, ** broke through 50 from an oversold state.
On July 22, 2023, ** broke through the lower channel line, representing the official start of **.
On July 25, 2023, the stock price touched the upper channel line and the stop loss exited.
Example 2
Shown here is the chart of Genetec Malaysia stocks.
On August 2, 2023, the stock price fell outside the lower band line, which means that the stock price has overfallen.
On August 3, 2023, ** broke through 50 from an oversold state.
On August 4, 2023, ** broke through the lower channel line, representing the official start of **.
On August 9, 2023, the stock price touched the upper band line and the stop loss was exited.
Summary
Bollinger Bands and KD indicators are two simple and easy-to-use technical indicators that can help us grab ** effectively. When using these two indicators, there are a few things to keep in mind:
It is important to wait for the stock price to fall outside the lower band line before considering entering the market.
It is necessary to wait for ** to break through 50 from the oversold state before you can determine the official start.
The stop loss should be set at the low of the lower channel line to avoid excessive losses.
Hopefully, this article will help you learn how to use Bollinger Bands and KD indicators.