Although there are hundreds of indicators for technical analysis, in the end, the most basic ones are price and volume, and other indicators are just variations or extensions of these two indicators.
We all know that the basic principle of the volume/price relationship is "Volume is the cause, price is the effect; volume is first, price is second", which means that volume is the intrinsic motivation for stock price changes, thus people have derived a variety of rules of volume/price relationship, which are used to refer to the specific investment of the people. However, in practice, people will find that according to the volume of the relationship to buy and sell specific stocks, there are often mistakes, especially in the judgment of the main force according to the volume of shipments and wash, the rate of error is higher, either the wrong wash when the shipments, prematurely sold, thus losing a good opportunity to profit, is the wrong shipments when the wash, the out of not, the result is to lose a good opportunity to ship.
So, in the actual investment in how the change in volume, the correct judgment of the main force in and out of the direction, or how, according to the change in volume, accurate judgment of the main force is in the shipments or washboard it? Generally speaking, when the main force is not ready to pull up the stock price, the performance of the stock price is often very dull, the change in volume is also very small, at this time, the study of volume has no practical significance, but also bad to determine the intention of the main force.
However, once the main force pulling up the price of shares, the main force's whereabouts will be exposed, we call such a stock strong Zhuang shares, then the study of volume changes have very important practical significance, at this time, if you can accurately capture the signs of the main force wash, and decisive intervention, often in a relatively short period of time to obtain very desirable earnings. Practice has shown that, according to the following characteristics of volume changes, you can make a more accurate judgment on whether the main force of the strong banker is in the washout.
First of all, due to the active involvement of the main force, the original dull stock in the volume of the obvious enlargement to promote the active, there is a price rise in the volume of the trend. Then, the main force in order to the future of the large pull up to level the obstacles, had to wash away the short term profit taking, this washing behavior in the k-line chart performance for the yin and yang of the horizontal oscillation, at the same time, because the main force is the purpose of the general investors out, therefore, the k-line pattern of the stock price often into a clear "Head pattern".
Secondly, in the main washing stage, the k-line combination is often large yin constantly, and the number of closing yin, and each closing yin are accompanied by huge volume, as if the main force is a big shipment, in fact, otherwise, careful observation will find that when the above huge amount of large yin, the stock price rarely fell below the 10-day moving average, the short-term moving average of the stock price constitutes a strong support, the main force low back to fill the signs at a glance, this is what technical people call "Huge amount of long negative price does not fall, the main force wash must have up".
Once again, in the main force wash, as the main indicator of volume change OBV, the average volume line will also appear some obvious features, mainly: When the above large negative huge amount, the stock price of 5 days, 10 days average volume line always keep running up, that the main force has been increasing positions, stock trading active, the market bullish. In addition, the quantitative indicator of volume, OBV, always stays up during the period of high stock price shock, even if it instantly falls back, it will quickly pull up and be able to make a new high in the near future, which means that from the perspective of volume alone, the stock price already has the conditions for a significant rise.
If a stock after a wave of rise, its volume changes in the above characteristics, it means that the main force of the stock wash may be great, the future market bullish.