Not only does the moving flat represent the average cost of the trader and the trend, but we also introduce the cross and the death cross in the "What the trader says", which represent the buying and selling points respectivelyRelated Reading:: "The Truth Nobody Tells You: The Secret of the Moving Flat ** Golden Fork Death Fork Trading Strategy"). Due to its simple calculations and a certain trend guiding role,Become one of the most popular technical indicators in the financial markets. In addition to being used to identify trends, can we also apply ** to make other trades?
The answer is yes! A well-known expert in volume and price analysis in the United StatesGrambi(Joseph Granville) proposed the "Eight Rules" based on the mobile level. Through the logic of deviation and crossing, he built a trading systemThis "Grambi Eight" has become a high-profile investment strategy in the field of technical analysis, and it has also allowed Mobile Ping to fully demonstrate the core idea of the "Dow Theory".
Let's start by getting to know the character of Grambi. In addition to founding Grambi Eight Rules, he is also the founder of Mobile Flat, and he is also the first person to put forward the "volume price theory". On January 6, 1981, Grambi issued a warning to investors, predicting an imminent collapse and recommending a sell-off of all. Sure enough, the Dow Jones index was 42%, and in the following year, the Dow lost 14%. This accurate ** has made Grambi famous in the investment world.
Grambi VIII** thinks,The fluctuation has a certain regularity, while the moving flat represents the direction of the trend. Therefore, when the ** volatility deviates from the trend, that is, "the deviation from the moving average", there will be a correction in the direction of the trend in the future. Therefore, when a deviation occurs, it is a significant buy or sell signal.
We call the deviation from ** to **Obedient(bias), i.e. bias=price - ma, where price is **; MA is the moving average. The greater the deviation, the higher the probability of a correction, but on the other hand, if the trend is accelerating, it can also be expected that the deviation will expand in the future. Therefore, deviance is also an indicator of observance.
Grambi VIII uses the relationship between the price (stock price, futures price or exchange rate, etc.) and the moving level as the basis for selling signals. The main strategies include support, resistance, breakout, deviation, false breakout, etc., through which investors can get a reference in the operation.
Grambi believes that stock price fluctuations have a certain pattern, and the moving flat** represents the direction of the trend. Grambi VIII** summarizes eight different situations as the basis for entry and exit:
Breakthrough:When the stock price gradually turns from a downtrend to a horizontal consolidation or rise, and the stock price breaks through from below, it can be regarded as a signal.
False breakout:The stock price broke **, but then *** above, and at this time** still showed an upward trend, which can be regarded as a **signal.
Support:When the stock price trend is above **, although the stock price corrects** but does not fall below **, it will go up again**, which can be regarded as a **signal.
When the stock price falls sharply, not only falling below **, but even far away from the depths below, and the stock price begins to rise and tend, it can be regarded as a signal.
Fall below:When the stock price falls below from above, it can be considered a sell signal.
False breakout:When the stock price **breaks through**, but then reverses**falls below**, and at this time** still shows a downward trend, it can be regarded as a sell signal.
Resistance (counterpressure):When the stock price trend continues to go below **, even if the stock price ** cannot break through**, ** becomes the resistance of the stock price, which can be regarded as a sell signal.
Anti**When the stock price rises sharply upwards and deviates far above **, the stock price reverses and the stock price tends to **, which can be regarded as a sell signal.
The 4 core spirits of the eight ** rules of Grambi
1.*Upside should not be shorted, **Down should not be long.
2.The moving flat itself has the characteristics of support resistance, rising and falling, etc., so it is conducive to long and short research and judgment.
3.The bullish and short permutations of * are a combination of ** and **, once the trend of the permutation reverses, it is necessary to change the strategy and perform the reverse operation.
4.The intersection of the mobile flat and the death of the cross is the intersection of the cost of the past, once the intersection occurs, it can often make the formation of the trend or the opportunity to operate with the trend.
The 4 major application defects of the eight rules of Grambi
1.Since Grambilly's law is highly dependent on the movement of the plan, and the historical trajectory of the signal, the occurrence of the signal often lags behind, resulting in a time gap.
2.*When stuck in a consolidation trend, there are usually false signals.
3.When you choose a moving flat with a short period, such as 5 or 10 days, the time difference of the signal will be reduced, but there will be more false signals.
4.When choosing a move with a longer period, such as 120 or 200 days, the signal obtained will be significantly more effective, but there will be a time gap, such as **already** or ** a short period before the buy and sell signal appears.
Grambi VIII** is parameter setting
As mentioned earlier, the speed of change is more sensitive to the use of shorter periods (such as the 10-day line) than those with longer periods. On the contrary, the speed of change in the long period** will be slower and steady. Therefore, when the stock price breaks through both the long-term and short-term periods, it can be regarded as a turning point buy signal and a buying action, and if it falls below the short period, it can be regarded as a turning sell signal, and traders can even carry out short operations.
Therefore, it is quite important in the selection of the cycle. There will definitely be friends who ask: which parameter is the best! That's a great question to ask, because it's what every trader is looking for.
Here's a standard answer for you:There is no best and most accurate cycle parameters, only the most suitable period for yourself.
Some traders may be the first trader, so the period parameters do not need to be set too long to cope with the rapid fluctuations required for trading. Or if the trader is a swing operator, then the period parameters of ** do not need to be set too short, and can be used to judge the medium-term trend of **.
Find the best cycle of the commodity you are trading, and cooperate with your own operating logic and inertia to ensure the reliability and stability of the buy and sell signal.
Before traders really start to use the eight ** to buy and sell signals in and out of the market, they should first have a considerable degree of certainty in the accuracy and winning rate of the results obtained by each commodity and each cycle, and then they can be more handy in application.
Grambi VIII** is a practical application case
I believe that after learning the above content, you have understood the eight rules of Grambi.
Grambi Eight is highly dependent on mobile flats, so it can be used not only in markets, but also in markets.
Let's take a look at how Grambi VIII** is applied to trading.
Case 1: Buying timing in an uptrend
The chart above** is the daily chart of the Canadian dollar and the Japanese yen (CAD JPY), and the orange line is the 200-day moving level**, and in the uptrend above, the trader operates according to the grambi eight**, which is suitable for buying at the point and selling at the point.
Case 2: A good opportunity to sell in a **trend
The above chart is the daily chart of the New Zealand dollar yen (NZD JPY), and the orange line is the 200-day moving flat**, and in the trend above, traders operate according to the Grambi eight, which is suitable for waiting for the opportunity to sell at the point, and can wait for the opportunity to buy at the point.
Summary
Grambi Eight is different from the parameter definition of the moving flat, ** can be used as a parameter of 10 mA, medium and long term can be used as a parameter of 22 mA and 65 mA, the moving flat ** is actually the average cost of the holder, and the eight of Grambi is the mutual relationship between the cost of ** and the majority of people, and the change in it is used as the basis for buying and selling.
In addition to freely setting the parameters of the flat, you can also use the daily, weekly, monthly and other cycles of the trading software to judge the timing of buying and selling, if you want to be very accurate in the application, you must choose the appropriate ** cycle to apply, and cooperate with the wave theory to operate, so as to accurately grasp the ** fluctuations.