Technical indicators that make investment more efficient

Technical indicators that make investment more efficient

Three technical indicators form a trading strategy, namely RSI, MACD and moving average.

RSI

RSI is a technical indicator that can measure momentum. The RSI minimum is zero. The maximum value is 100. No matter how the stock price rises or falls, Rsi will only fluctuate within zero to 100. RSI can be used in many ways. First, we divide RSI into two halves. It is RSI50. When RSI is 50 or above, it means that the momentum of the stock price is very sufficient, and the stock price is on an upward trend. When RSI is below 50, it means that the momentum of the stock price is insufficient, and the stock price is in a downward trend.

So when the stock price is at RSI50 or above, you can try to buy. When the stock price is below RSI50, you can try to short.

MACD

MACD is a technical indicator that measures trend and momentum. There are two lines in MACD. One is the blue line, which is EMA12, which is the fast line. There is also an orange line, which is EMMA26, which is the slow line. And the line in the middle is the zero axis. When the fast line crosses the slow line upwards, it is the golden cross, which means that the short-term upward trend of the stock price is very strong, and the market outlook is bullish. Weakened, or from an upward trend to a downward trend, the market outlook is bearish. After the golden cross below the zero axis, it is bullish. If the death crosses above the zero axis, you must be bearish.

The moving average is a technical indicator that allows people to judge the stock price trend at a glance. When the stock price is above the moving average, it is considered an upward trend. When the stock price is below the moving average, it is a downtrend. The moving average parameter suggests 60MA. We use 60MA to judge the long-term trend of the stock price, so only when the stock price is above 60MA, we will consider buying more. When the stock price is below 60MA, we will only step in to short.

RSI plus MACD plus MA trading strategy, three steps. The first is to judge the long-term trend of stock prices. The second is to judge the short-term trend of stock prices. The third is to ensure that the momentum of the stock price is sufficient. We use MA to identify the long-term trend of the stock price. Use MACD to identify short-term trends in stock prices. As well as using the RSI to confirm that the momentum of the stock price is sufficient.

Do more conditions. First, the stock price must be above the 60MA. Second, MACD is about to make a golden cross. It doesn’t matter whether it is above the zero axis or below the zero axis. In the third step, the RSI must be greater than or equal to 50. When all three steps meet the conditions, you can try it. The stop loss point is set at the previous low position. The take profit point is set twice the stop loss point. So the profit-loss ratio is 2:1.

Short conditions. First, the stock price must be below the 60MA. Second, the MACD must undergo a death cross, whether it is above the zero axis or below the zero axis. Third, the RSI should be less than 50. After these three steps meet the conditions we set, we will intervene short. The stop loss point is set at the previous high position. The take profit point is set twice the stop loss point.