Text/Chen published on: 2011-7-20 20: 05: 58?

The definition of trend in Lu Xiwu's trend trading law;

The definition of trend is simply the direction of price fluctuation in a certain period, or the direction of movement. In a given period, the price cannot break through the defined trend line and inflection point line, and the market will continue to maintain the previous trend, which we call trend. There are three trends: upward trend, downward trend and horizontal consolidation (no trend). In a certain period of time, the market price constantly broke through the previous wave of highs and hit a new high, but the process of not falling below the previous wave of lows in the callback process is an upward trend.

In a certain period of time, the market price kept falling below the low point of the previous wave, hitting a new low, but it did not rise above the high point of the previous wave during the rebound, which is the downward trend.

In a certain period of time, the market price can't break through the high point of the last wave, and then it can't fall below the low point of the last wave, so the process that has been maintained is horizontal consolidation.

As the saying goes, direction is always more important than speed, and the biggest feature of the trend is directionality! This is the same as taking sides, supporting, opposing and being neutral in the political sense! If the team stands right, it can be said that a person has gained enlightenment. Stand on the wrong team, the future is dim, and even people will die. No one will support a neutral attitude that no one will object to. In the end, no one will support and no one will object! Homeward trading means that the team is right, of course, it is always profitable, and it will be profitable over time; Trading against the trend is equivalent to standing in the wrong team, and it is bound to stop losses frequently. Over time, blood will be lost. At the same time, contrarian trading is equal to neutrality and natural breakeven. Hard work does not necessarily make money. There are three trends. In this sense, the probability of investors entering the market is not determined according to the two mutually exclusive events, that is, whether they will fall or not, the profit and loss will be 50% respectively. Instead, it should be calculated according to the probability of the combination of homeopathy and contrarian. If you don't understand the trend, the possibility of making money is only 1/3, and the possibility of losing money is as high as 2/3. If you still have some subjective bias, you will lose 80% to 90%, and more than 95% of the losses are normal. The fact that financial transactions kill people will be believed. Knowing trend trading, the possibility of losing money is only 1/3, while the possibility of making money is as high as 2/3. If we cooperate with other forecasting methods, the profit will be 80% to 90%, and occasionally the positive market of 100% is not too much. Even after listening, investment profits will follow!

When trading in the market, we need to understand the trend from a relative perspective! This is why Mr. Lu Xiwu always emphasizes a certain (specific) period in his definition. It has a starting point and an ending point. In the quotation software, the lateral displacement from the starting point to the end point is also the time period when the trend occurs. It has a bottom point and a vertex, and the price difference between the bottom and the top we see is the spatial displacement of the trend.

The two sister characteristics of the trend, timeliness and spatiality, jointly construct the level of the trend! Based on trend

Frank, the originator of trends, Dow Jones divided trends into major trends, basic trends and secondary trends. In this regard, we further understand this division from the perspective of time and space!

In terms of time, there are short-term trends, medium-term trends and long-term trends. By subdividing these short-term, medium-term and long-term trends, we can easily understand why market software has a series of cycles, from 1 minute, 5 minutes, days to weeks, months, years and so on. I think at least one piece of information can be extracted because of this design. The trend is 1 minute, 5 minutes, hours, daily line, weekly line, monthly line and so on. What kind of time level reflects the continuous trend of the trend, and is a multiple of this time period. Therefore, the 1 minute level belongs to the entertainment nature, and the 5-minute level trend can be used to look at the market trend within 30 minutes, which is often used for short-term speculation in the electronic trading market of bulk commodities. The hourly level can be used to look at the trend of the day, and it is mostly used for investors to do T-trading. The daily level is often staged in short-term trading in the stock market. The weekly level has certain reference value for mid-line investment in the securities market. Some long-term investors can look at the monthly level. The annual level is generally used to look at the national macroeconomic era, and it is rarely used in the limited investment career of investors!

Corresponding to short-term, medium-term and long-term trends, the trend level can be divided into small trends, medium-term trends and big trends from a spatial perspective. Judging from the dialectical relationship between the main contradiction and the secondary contradiction in philosophy, the general trend determines the middle trend, and the middle trend determines the small trend; Small trends can evolve into medium trends and further evolve into big trends. As for how to communicate, it depends on where the trend line and strange dotted line break through, so Lu Xiwu can't break through the trend line and inflection point line in definition, and the market will continue to maintain the previous trend, that is to say, the level reflected by the trend line and inflection point line depends on which high point meets which high point and which low point meets which low point in the drawing process.

In addition, from the time and space level of the trend level, it will also let us know an important reason why the market software arranges the commonly used trading day coordinates and occasional natural day coordinates in time, while arranging the less used logarithmic coordinates and the more used ordinary (arithmetic) coordinates in space. The trading day coordinates reflect the transaction continuity of the trend level, and the natural daily coordinates reflect the time discontinuity of the trend level. Weekends, holidays and the closing of individual stocks can be understood as a space gap, which is called the time gap for the time being. Ordinary coordinates play a key role in the speed of looking at trends, while logarithmic coordinates are more used to show the acceleration of trends and observe the expansion and contraction of market trends. In this way, we also infer two other characteristics of the trend from the level of the trend: the continuity of trend time gap and trend space construction, and the speed of the proportional relationship between trend time and trend construction!

Does the trend have no other characteristics except directionality, timeliness, spatiality, hierarchy, continuity and speed? In his definition, Lu Xiwu pointed out that the upward trend should hit a new high, the downward trend should hit a new low, and the horizontal trend can neither hit a new high nor hit a new low. We summarize this as the innovation of the trend! Investors must pay attention to innovation. Usually, when we say the so-called new highs and new lows, we mean the direction of the trend, not the need to open positions immediately. On the contrary, hitting a new high is more of a short-term fall, and hitting a new low is more of a short-term rise, because there will be a callback and rebound! Callback or not.

It's a rebound, which we call a trend retracement. The problem is the degree of retreat. In view of this, Lu Xiwu mentioned in the definition of the upward trend that he did not fall below the low point of the previous wave in the callback process, and mentioned in the downward trend that he did not rise above the high point of the previous wave in the rebound process. In the horizontal consolidation, there is no mention of historical highs or retracement, but the market price can't break through the high point of the previous wave, and then can't fall below the low point of the previous wave. In this way, we can also see that retreat and innovation actually go hand in hand. If * * * survives * *, then there will naturally be no innovation and retreat without trend. I read Lu Xiwu's Trend Trading Law, which was published in: 2011-7-318: 25: 26, 276 1 reading.

Open the trading quotation software, the abscissa is time series and the ordinate is price series, so that each transaction can be represented by a point coordinate (current time series, current trading price), and countless trading point coordinates are drawn into a graph, which forms the market trend of the trading market, that is, the trend. It can be said that the trend is a point set composed of point coordinates of countless transactions. The problem is that it is too complicated to list every point coordinate of this point set. In order to simplify the complex, from the time and space of the trend, we might as well use the point coordinates of the first transaction and the last transaction in this market to represent the trend of this market. If the first letter of the English word T stands for time series, P stands for price series, T stands for trend, F stands for the first transaction and E stands for the last transaction, then the mathematical expression of trend can be written as t = [(t (e)-t (f), p (e)-p (f).

Isn't this a vector? Yes, the essence of the trend is the collection of vectors! Each wave of the trend is also a directional line segment, which can be drawn by the arrow line segment on the market analysis software. The arrangement and combination of many arrow segments make the trend ever-changing. The length of the arrow segment reflects the size of the trend, the slope of the arrow segment reflects the speed of the trend, and the positive and negative slopes of the arrow segment reflect the rise and fall of the trend.

Since the trend is a set of vectors, the changing law of the trend must obey the vector addition principle, that is, the triangle law. Teacher Lu Xiwu mentioned in the Trend Trading Law that the upward trend is the arrangement and combination of the main upward wave and the adjustment wave, and the downward trend is the arrangement and combination of the main downward wave and the adjustment wave, which means that the change of the trend is nothing more than the arrangement and combination of the main downward wave and the adjustment wave, and the combination characteristics of the trend also reflect the change form of the trend. However, this arrangement and combination can be that there is only one main wave and adjustment wave, and only one is only a single trend direction. Even if there are both main waves and adjustment waves in the process of trend change, no matter which one is more, which one is less, which one is earlier and which one is later, it may be called circular trend direction. The circular trend direction can better reflect the triangular law of trend change.

If the adjustment wave direction is consistent with the main wave direction, then the trend is very strong, rising or falling strongly, and vice versa. But in most cases, the adjustment wave direction is opposite to the main wave direction, that is, the slopes of the main wave trend and the adjustment wave trend are positive and negative, and usually the combined periodic trend vector and the main wave trend vector are positive or negative, which we will understand.

Why did Mr. Lu Xiwu clearly point out in the definition of the upward trend that the previous wave reached a new high (the downward trend was a new low) and the retracement did not break through the previous wave's low point (the downward trend was a high point)? However, there are exceptions. The direction of the new trend vector of the combination of the main wave and the adjustment wave is the same as that of the adjustment wave, but the direction of the main wave trend vector is opposite. This usually happens when The 5th Wave fails or the market enters the stage of expansion adjustment (knocking out both high and low points).

If the first wave that constitutes the periodic trend is the main wave and the last wave is the adjustment wave, then no matter how many waves are in the middle, the periodic trend vector obtained according to the triangle law extends backward, that is, the upward trend line or the downward trend line; On the contrary, if the first wave that constitutes the periodic trend is the adjustment wave and the last wave is the main wave, then no matter how many waves are in the middle, the periodic trend vector obtained according to the triangle law is backward, that is, the upward extension line or the downward extension line. So extension line and trend line are actually a concept, but the circular trend vector here is named differently because of the different order from the main wave to the end of the adjustment wave or the end of the adjustment wave, which is why Teacher Lu Xiwu gave the definition of trend line drawing, and it is not necessary to define extension line drawing. If the trend vector of the extension line is regarded as the mode of adjusting the wave tail from the main wave, then we only need to rotate the market trend by 180 degrees, and the trend line obtained is also an extension line. As for the inflection point line, Teacher Lu Xiwu often talks about drawing parallel lines of the line first, and then drawing first, which actually implies that the line drawn first is either a trend line or an extension line, and the inflection point line is just their parallel lines, so there are two kinds of inflection points, namely, parallel trend line inflection point line and parallel extension line inflection point line.

Back to the rule of trend trading, Teacher Lu Xiwu's definition of trend is: the trend line and inflection point line in the definition cannot be broken, and the market continues to maintain the previous trend; According to the trend trading law, the first trading principle is that the trend line and the inflection point line set the direction; The first assumption is that the trend line and inflection point line must be broken at the same time before the previous direction changes. I can't help asking here, why does teacher Lu Xiwu always emphasize that we should look at the rise or fall through the trend line and the inflection point line? And why is it easier to break through a single trend line or a single inflection point line? Why is the trend trading method more used to look at the persistence of the trend than the reversal of the trend? Why can you do homeopathic trading through trend lines and inflection points?

In fact, the trend line only reflects a periodic trend vector in the process of market development, rather than the only trend vector composed of all wave combinations at this level. Due to the continuation and failure of the main wave, the adjustment wave forms are various, and it is completely normal for the market trend not to follow the trend line. If the inflection point line of the parallel extension line is observed in the adjustment process, it is understandable that the inflection point line of the parallel extension line becomes a support or resistance, so it is not difficult to understand that the inflection point line often mentioned by Teacher Lu Xiwu can be used as an opening point or a closing point. Both the trend line and inflection point line of the parallel extension line have been broken, ending the two-cycle trend direction. At this moment, it is more likely to change the direction of the trend than to maintain the previous trend! In order to see the trend clearly, Mr. Lu Xiwu repeatedly stressed that the price difference should not be crossed in the middle of the inflection point line of the trend line extension line, and the longer the interval, the better. The reason why the middle does not cross the price difference is to make the internal vector of circular trend better obey the triangle law, and the longer the interval between them is, the more comprehensively this circular trend vector summarizes it.

Trend essence of market segments. From the trend essence, because the trend line and inflection point line can't fully express the circular trend vector of this market with 100%, and because the best expression of the circular trend vector of a market is the Gann angle line connecting the highest and lowest points of this market, it is inevitable to make mistakes occasionally. If trading in strict accordance with the trend trading method is still wrong, then the stop loss is yes, but it does not mean that the trend trading method is invalid. If the trend line and inflection point line are broken, Teacher Lu Xiwu is talking about dividing a market into two parts, while the trend trading method only mentions breaking the trend line and parallel extension line inflection point line to divide a wave 1 or a wave A into two parts, without mentioning how the extension line and parallel trend line inflection point line divide a wave into these two parts. In either case, the unbroken part is generally regarded as a cyclical trend vector in this market before the market comes out; If the breakthrough part is aimed at the adjustment of this market, it is generally that retail investors are rushing to adjust, and the main funds intend to open positions again where the chips are cheaper. If the trend is reversed, it is generally planned to open positions in the opposite direction of the main capital shipment. If the trend accelerates, it is often contributed by retail investors. Before reaching the trend line and inflection point line, start running in a new trend direction ahead of schedule. Teacher Lu Xiwu can talk about K-line inversion signal. In fact, according to the same logic, if it does not reach the inflection point line of the trend line and the parallel extension line, the trend will often accelerate and enter the main wave. If you don't reach the extension line and inflection point line of the parallel trend line, the trend tends to slow down and enter a larger level to adjust the waves, that's all. From the above discussion, it can be said that the trend trading method only tries to express the true meaning of the trend through some circular trend vector, but since the trend line and inflection point line cannot explain the essence of the trend, how to express the true meaning more comprehensively and how to show it to speculators in an easy-to-understand way needs further study and discovery! I read Lu Xiwu's article "Trend Trading Rule III-Trend Level"/Chen.

Published on: 2011-8-2613: 02:14 ┊ Words 23 10 ┊ Reading ┊.

In officialdom, clerks-section chiefs-directors-directors-ministers-standing committees-prime ministers, and civil servants have climbed up level by level to realize their political ambitions; In the market, employees-managers-supervisors-directors and wage earners realize their career dreams step by step. Trading is no exception. How to judge the grade difference of the trend is directly related to the profit and loss of the transaction, just like the bright and dark political and economic prospects.

Looking back at the definition of trend in Lu Xiwu's trend trading rule, the upward trend hit a new high and the downward trend hit a new low. The horizontal consolidation is neither broken before high nor broken before low, which virtually tells us that the rising trend is not broken before low and the falling trend is not broken before high belongs to the same trend level.