How to break the three methods of K-line rising trap (Part 1)?

How to solve the three methods of K-line rise trap (Part 1) has always been a hot topic for investors, but many of them are lack of relevant experience and skills. Today, I'd like to introduce it to you.

Brief comment: rising strong consolidation, sustained form, bullish future market, no need to confirm the form.
Features: three ascending methods, also known as ascending three steps, are composed of five Yin Yang K lines. It can be divided into three parts: the first part is the rising part; the second part is the callback part; the third part is the rising part again, which is a consolidation signal to maintain the original upward trend.
The first step in the process of the formation of the three rising methods is that in the continuous upward trend of the market, many forces push the stock price up strongly and close a long positive line. After Changyang, the stock price fell down and sorted out, showing three short negative lines (two or more in actual combat can also be used), indicating that the original upward trend is facing certain pressure. However, the entity of this small Yin line is not large, and the stock price declines very little. The actual rise and fall range does not exceed the high and low range of the previous positive line, and the trading volume decreases at the same time Two steps. The third step is that after a moderate adjustment of the stock price, many parties make efforts again. On the fifth day, the stock price has reached a new high, and has successfully stood above the closing price of the first day's positive line, and the stock price has reached a five-day high.
Generally speaking, the rise three method is similar to the rising flag, showing a big positive line (flagpole) in the upward trend, reflecting the strong buying. Then several small negative lines (flags) show that the market is digesting the profit taking, and the buyers are panting for opportunities, and then break through the adjustment depression, and then push the stock price up again. Please note that the three rising methods are not necessarily successful. It is better to wait for the final breakthrough of the big positive line before pursuing the goods.
The rules of morphological identification are as follows
(1) There is a big positive line in the rising trend.
(2) The opening price of the big positive line on the last day should be higher than the closing price of the small negative line on the previous day.
(3) The closing price of the last day's big positive line should be higher than that of the first one.
(4) The k lines in the middle are all short ones, and the ideal number is three (two can be accepted). The only condition is that they must be in the first big male line (the shadow line part can be ignored). In addition, these small K lines also have elasticity, which can be yin or yang, but most of them are Yin lines.
(5) In the middle of the form, three small Yin lines are arranged in a descending ladder, and the closing price of each day is lower than that of the previous day.
Technical meaning: the three rising methods indicate the temporary interruption of the price trend, but its strength is too weak to cause the reversal of the trend. The falling process is the "break" time of the trend. This situation generally does not change the original operation trend of the market. Therefore, investors can actively hold shares to wait for the real top to appear.
The three rising methods can be regarded as the time to suspend trading or take a rest, which is usually called consolidation period. The psychological background of this trend is that the market has doubts about the sustainability of the trend. When there is a consolidation trend with narrow fluctuation in the market, the suspicion will continue to increase. However, once the Bulls find that the price can not reach a new low, many parties will quickly resume the original momentum, and the stock price will also be rapid Set a new record.
To judge the form effect and operation points
(1) The "three up" method is not a turn signal, but a consolidation signal indicating that the upward trend will continue. Therefore, before the signal appears, the stock price has already had a small rise, which is different from other bottom signals.
(2) In terms of trading volume, the first big positive line should be larger, representing strong buying. The trading volume of the middle adjustment part should be reduced accordingly to show that the main force has not sold a lot during the adjustment, so it is a healthy profit taking. The last big positive line, break through the adjustment of boring situation, the volume of trading should be relatively increased, on behalf of optimistic parties to actively buy goods. It is important to remember that volume changes are in the form of "high, low and high".
(3) The third part should be the breakthrough of the previous part of the high point. The market has reached a new high since the upward trend. Investors who like to buy when the market breaks through should not be missed.
(4) The rising three methods should appear after the big positive line, which indicates that many parties rise rapidly, and then take a rest through the three small Yin lines. The positive line of the fifth day is to jump short of the opening and attack the high point formed on the first day.
(5) The rest time may be more than 3 days, but in any case, the high and low prices of the small Yin line (the shadow part can be ignored) always remain within the price range of the first day's big positive line.
2. Three methods of rising trap
After the stock price bottomed up, the market showed a long development trend, the strength of the upward attack did not decrease, and there was a big positive line in the K-line chart. However, many parties kept a steady and steady situation. After Changyang, many parties took the initiative to control the rising pace, and there were three small negative lines in succession. Then on the fifth day, the stock price opened and went high and swallowed up three small negative lines at one stroke. The stock price set a new record of trend and successfully stood above the closing price of the first day. The K-line combination forms the standard rising three method form, which is an opportunity to increase position or buy.
However, in the real offer operation, when investors buy people one after another, the stock price does not rise. Usually, on the second day after the formation of the pattern, when the bull rises, it is easy to encounter the inhibition of short positions, which can easily hinder the upward trend of the three methods and cause the form to fail. After the failure, the stock price will be reorganized horizontally to form another larger consolidation form or develop into the head form. Finally, the stock price will choose to go down and form the three methods of rising trap.
The main reasons for this kind of market are: 1) in the process of stock price rising, the energy loss of various parties is too large, the subsequent energy is not continued, and the upper attack is weak, which leads to the technical failure; 2) the upper part encounters strong pressure, and the stock price is blocked from falling down; 3) it may be that the strength of the makers is weak and can not open up the space for further stock price rise.
The main reasons are as follows: 1
First, in the last big positive line, the trading volume amplification is not obvious, reflecting that the buying is not positive. At this time, investors should be suspicious.
Second, the stock price did not continue to rise after the emergence of the three rising methods, reflecting the lack of long-term confidence.
Third, when the stock price falls back to the consolidation area within the three rising methods, it is suspected that a small head shoulder top pattern will be built. At this time, we should be vigilant. Once the small head shoulder top is formed effectively, we should clear the position immediately.
From the stock trend chart, we can see that the main reasons for the failure of the "three methods of rising": first, in the process of stock price adjustment, connecting the first two high points into a straight line will form a downward trend line, and the high point of the three rising methods is just near the upper track line of this trend line, so it has strong pressure on the stock price. The other is to connect the low points of stock price falling down several times into a straight line, forming a supporting line close to the level. The two straight lines together form a downward triangle, which is of bearish significance in theory, so there are big differences on the future market rise of stock price. Third, the rise of stock price encountered the pressure of two trading intensive areas in the early stage. One pressure area is the rebound high point close to the front, and the other is the most forward adjustment low point. Generally, it is difficult for the stock price to break through these two areas at one time. Therefore, it is expected that the stock price will fall back again.
Through the analysis of the above two examples, investors can think from the following factors when encountering such stocks:
First, when the three methods of rising appear, the rising range of the stock price should not be too large. If the stock price rises by a large margin, such as doubling or even several times, attention should be paid to this situation. This is often a technical trap deliberately created by the dealers to attract investors to follow suit and buy.
Second, in the form of a few days of adjustment, trading volume must show signs of shrinkage.
Third, in the last big positive line of the form, the buying must be quite positive, the trading volume will be significantly enlarged again, and there should not be a large number of active selling in the process of the stock price rising on the same day.
Fourth, in the next day or in the next few days, if the stock price falls, it must be reduced in the process of falling, and the falling range of stock price should not be too large, and it must be operated within the last big positive line of the three rising patterns. If the stock price falls below the 10 day moving average, then the rising three methods may lose the bullish function.
Fifthly, when the stock price goes up: when there is a shock resistance, there can not be a large number of selling in the intraday, otherwise the stock price is difficult to continue to move upward. In this process, the trading volume can be enlarged, but most of these trading volume is released by the initiative of buying orders.

Was this article helpful?

1 out of 1 found this helpful