The stock market is unpredictable, and no investor can guarantee that they will always be invincible in the stock market. There are many excellent investors in the market, and investment strategies and methods can be used as references, but it is important to understand that even the essence of other people's ideas will always be someone else's, and the most important thing is how to find the most suitable for yourself in the vast sea of theories and transform them into your own investment style, which requires a long time of practice and accumulation. Therefore, after investors enter the actual combat, they must pay attention to the accumulation and integration of knowledge, constantly adjust the investment strategy according to their own preferences, and will definitely form their own investment style over time.
In the stock market, the BIAS indicator, also known as the deviation rate indicator, is a technical analysis indicator derived from the average line, which is used to measure the degree of deviation of the stock price from the average line, the higher the index index, the more obvious the deviation. When the BIAS value reverses, the direction of the stock price will also change, so we can confirm the buy and sell points of the trade according to this classic pattern. So, today we will explain and introduce the buying opportunity of "BIAS double bottom reversal"!
The double bottom reversal pattern is often seen in the stock price candlestick chart, and if it is seen in the BIAS indicator, it can indicate a typical reversal signal. When the BIAS indicator takes the lead in completing the double bottom pattern, a buy signal appears in the low price zone. In particular, the double bottom of the BIAS indicator appears in a divergence pattern, and its bottoming significance is more clear. Divergence can indicate the emergence of a low-price buying point, and investors can take the opportunity to buy low to expand their returns.
Morphological characteristics:
(1) Divergence of the waterfall line: During the downward divergence of the waterfall line, the decline of the stock price expands. During the decline in the form of a long black candlestick, the stock price is significantly detached from the waterfall.
(2) BIAS divergence from the double bottom indicates the buying point: During the rebound of the BIAS indicator from the low, two bottom patterns appear. During the divergence phase, the two bottom divergences of the BIAS indicator recovered, pushing the stock price to extend the rally.
Morphological interpretation:
As shown in Figure 1-1, the waterfall line diverges downward at the F position, and the stock price shows a downward trend. The stock price has hit new lows in the form of a long black candlestick, and the BIAS indicator has rebounded from position A to position B, indicating the emergence of a divergence double bottom pattern between position A and position. After the stock price touches the waterfall line at the C position, there is more room for a rebound.
As shown in Figure 1-2, during the recovery of the waterfall line from A to B, the stock price fell below the waterfall bonded at N and touched the closing low D. Next, after the BIAS reversal with the A and B positions diverging from the double bottom began to form, the waterfall lines quickly bonded at the N1 position. Next, the waterfall diverges upwards, driving the stock price to a rapid surge.
Determination of buying and selling points: In Figure 1-1, the bias divergence from the double bottom is completed at the A position and the B position, and a double bottom pattern is formed at the H position, and the buying point at the 1 position is prompted in the process of callback to the H1 position; The buy level at the C position can be verified by the BIAS double bottom pattern, and the buy price is not much different from the 1 level. In Figure 1-2, after the waterfall line bottoms out from position A and position, the BIAS divergence rises. During the BIAS indicator completed the double bottom pattern at position A and position B, the waterfall lines were glued at position N and then at position N1, indicating that the stock price stabilized strongly.
Practical Guide:
(1) In Figure 1-1, when the stock price enters the downward phase, the long black candlestick clearly reflects the oversold pattern of the stock price. The BIAS indicator indicates that the stock price has fallen in place after the divergence of the A and B positions from the double bottom.
(2) In Figure 1-1, with the divergence of the BIAS indicator, the speed of the stock price to the C and 1 positions will be accelerated. After the completion of the low double bottom of the BIAS indicator, the typical buy point appears at the 1 level. This is the trading point before the waterfall short-term sticks and diverges.
(3) In Figure 1-2, the stock price performance is not a one-sided decline during the bonding of the waterfall line at the N position. At this time, the low price of the D position has been verified by the BIAS double bottom. Next, after the waterfall sticks upwards at the N1 position, the bullish trend accelerates significantly.