Make profit from the shock trends
The shock market accounts for the largest proportion of the market, and it is expected that 70% of the price fluctuations will be the shock market. For investors, the shock market has many trading opportunities and risks under control.
Observing the features of the price chart of the shock market, there are many trading opportunities:
1. Buy when the price drops to a low level;
2. Sell when the price rises to a high level;
What is a shock market? The shock market generally appears after a wave of rise or fall. In such a market, because the power between the long position and the short position is relatively balanced, the market will be limited to a certain area and will not go too far. Since the bullish or bearish news in the previous unilateral trend market has been digested by the market, there is no new fundamental news in the market for the time being, and both bulls and bears in the market maintain a cautious attitude. From the performance of the price chart, the price will fluctuate up and down in a certain range, and the moving average indicators are glued together and arranged horizontally. This kind of market is what we call a shock market.
How to make profit from the shock market?
First of all, we need to find out the range of oscillation, namely the support and resistance levels
Support level: refers to the price level that may encounter support when the price falls, and thus stabilizes, and is the low level of the shock range.
Resistance level: refers to the price level that may encounter pressure when the price rises, thereby reversing the falling price, which is the high level of the shock range.
Then, remember the shock trading principle
Trade in the shock range; make long positions near the support level and make short positions near the resistance level.