Most investors in the market are short-term investors, mainly judging the rise and fall of stocks through various technical indicators and K-line patterns. So the techniques for short-term investment and long-term investment are completely different. Short term investment requires fast in and fast out, frequent trading. So the demand for trading signals is more sensitive. Below, we will discuss several commonly used technical analysis methods.

Upper rail compression and lower rail support

Stock prices are influenced by various information and factors in the short term, and at first glance, they exhibit irregular fluctuations. The stock price quickly reflects all publicly available information in the market, causing continuous fluctuations in the stock price. However, this seemingly random up and down fluctuation actually follows a pattern. In the short term, the most basic rule is that the stock price will oscillate between the upper pressure level and the lower resistance level. If there is no strong information stimulus, the stock price will remain within this range. The law of upper track suppressing lower track support is widely used in short-term investment. Usually, investors use the 5-day moving average as the short-term support level for stock prices, so whether the 5-day moving average is supported or not is the key decision-making basis for short-term operations.

When the stock price reaches a certain height, it usually forms a head. The head area is not formed at once, and the stock price does not fall all at once, usually after a period of fluctuation. During this period, the main force will engage in attracting excess sales, and only after the main force's chips are cleared will there be an accelerated decline. So when making buying actions, pay extra attention to the head signals to avoid being trapped at high levels. If a stock oscillates repeatedly at a high level, with a daily amplitude reaching or approaching 5%. Repeatedly fluctuating stock prices within a certain range on multiple trading days means that they do not reach new highs. At this point, attention should be paid to the possible obvious head area.

After a period of rising stock prices, it is common to choose sideways consolidation. This sideways trend often provides us with a very good observation period. If it is a strong consolidation, the amplitude of the up and down movement is narrow during horizontal trading, and the trading volume did not increase significantly during the early rise. After a strong consolidation, it usually forms another upward breakthrough. Once the upper edge of the previous oscillation is broken, a new wave of upward movement will appear. If the trading volume increases, it means that Dayang will directly break through, and this is a good opportunity to intervene.

Seize the opportunity to intervene using the 5-day and 10 day moving averages

After a period of rising stock prices, they will enter a plateau period, during which the rate of increase will slow down or even decline, leading to a downward trend in the 5-day moving average. At this stage, as long as the 5-day moving average does not fall below the level of the 10 day moving average, investors can consider intervening. If there is volume when the 5-day moving average touches the 10 day moving average, it indicates that there are not many chips to sell and the market is still in a state of reluctance to sell. This is usually a good opportunity for intervention.

The above are some commonly used techniques for short-term trading, hoping that these techniques can be helpful to everyone.