How to use trend line in spot gold trading? What are the techniques?
Spot gold is spot trading, which refers to delivery after the transaction or within a few days. Spot gold is a kind of international investment product, which is an investment and financial management project formed by the gold companies establishing trading platforms and trading online with market participants in the form of leverage ratio. Then, how to make full use of the trend line in spot gold trading.
The trend line is the line connecting more than two low points in the rising gold market and more than two high points in the falling market. The former is called the rising trend line, and the latter is called the falling trend line. The function of upward trend line is to show the support level of price rise. Once the price falls below this line in the process of fluctuation, it means that the market may reverse and turn from rise to fall. The function of downward trend line is to show the resistance of price rise in the process of price fall. Once the price breaks through this line in the process of fluctuation, it means that the price may stop falling and return to rise.
Investors should pay attention to the following points when drawing the trend line: 1) the trend line is divided into long-term trend line, medium-term trend line and short-term trend line according to the time of price fluctuation. The longer the time cycle is, the higher the effectiveness of the trend line is; 2) the more the number of high points or low points connected by the trend line is, the stronger the effectiveness is; 3) The short-term breakthrough of the trend line is not considered that the gold price will change the track of operation; 4) the trend line should not be too steep, otherwise it is easy to be horizontally sorted and broken, and lose the significance of analysis.
From the perspective of tangent theory, trend line is a part of it. It is a straight line formed by connecting the low point and the low point or the high point and the high point of the fluctuating price. If the price is operated in the way that a low point is higher than a low point, the trend line drawn is the upward trend line; if the price is operated in the way that a high point is lower than a high point, the trend line drawn is the downward trend line. There is also a horizontal extension of the low and high prices, with no obvious upward and downward trend, which is called horizontal consolidation or box consolidation.
The trend line can be divided into support line and pressure line. Connecting the low point and low point of the price band into a straight line is the support line; connecting the high point and high point of the price band into a straight line is the pressure line. The length of the trend line is directly proportional to its importance. The distance between the first and second points of the long-term trend line and the medium-term trend line should not be too close. If the distance is too close, the importance of the trend line will be reduced.