Trading system is divided into forecasting type and following trend type! I used to be inclined to predict, now I am inclined to follow! Trading system is divided into judgment trading system and mechanical trading system, I now tend to mechanical trading system! Xiao Bian’s application of the four laws is incisive. It’s also a trading system that looks stupid and simple, with a low winning rate but a high profit loss ratio. Like the moving average, it’s a trend following trading system! It can be said that everyone will use the moving average, but there are few good ones! Including me, have been on the moving average system with bad! After careful analysis, it is not that the moving average system is not good, it is that there is no deep understanding of the moving average system and there is a problem with the usage of the moving average system!
The weakness of the moving average is that it lags behind the price. In the shock period, it sends out signals frequently and can’t eat the head and tail of the trend. Therefore, many people give up the moving average and go to find some higher indicators and systems to do single! In fact, this is a misunderstanding of the moving average! In my opinion, the moving average is the best indicator to follow the trend, as well as the price and shape. Now I don’t look at the big cycle, such as the daily line and the 4-hour K-line, and the K-line less than 4 hours. I only look at the moving average and shape, and shrink the chart to the minimum!
Moving average is the average price. It eases the price glitch and shows the current state of the price with a relatively stable trend curve. If the current state is volatile, it means that this is not the best trading time. Even if you don’t use moving average and use other indicators, it is difficult to operate in the volatile period! As for the head and tail, I think the head is part of the trend confirmation. Without confirmation, how can we say that the trend has changed?
The tail is the confirmation that the trend is about to reverse. This part of the operation is very risky. So for the trend, the moving average signal gives the safest operation space. In this way, the disadvantages become the advantages instead! As for the average price of repression and support, may be a psychological resonance effect, I think it is not reliable! Moving average cross mechanical operation, combined with capital management is the most important!