Detailed explanation of shock trend

2021-07-05

The shock trend accounts for the largest proportion of the three major market trends. 70% of the price movements in a year are shock trend, so a well understanding of the shock trend conducive to our investment. The features of shock trend: price fluctuates between a certain price range. The shock market is the cessation of the trend, which corresponds to the rising market and the falling market, and is a consolidation. According to the market position, it can be divided into: bottom shock; middle shock; top shock.

Bottom shock - trend reversal

When the market has gone through a period of decline, at the end of the downtrend, the strength of the short position gradually turns from strong to weak, and the power of the long position begins to gain momentum. The long and short position began to battle.

Features: The price stops falling sharply and fluctuates within a range, forming a bottom shock.

Trading method: Profit closing of short positions; and start to make long positions.

Middle shock - the trend continues

When the market shows a unilateral trend, it encounters resistance from the opposing force, but the original trend force prevails at this time. After several rounds of the two sides, the market continued to develop in the direction of the original trend.

Features: After the unilateral market appears, it will form a callback trend, the market outlook breaks through the shock range, and the unilateral market continues.

Trading method: When in uptrend, continue to make short positions at the high point of the price rebound. Or when there is a downtrend, continue to make long positions at the low point of the price correction.

Top shock - trend reversal

When the market has experienced a top shock, at the end of the uptrend, the power of the long position gradually turns from strong to weak, while the short position power begins to gain momentum. The long and short sides began to battle.