Dong Qiangqiang's Story of Leaving Germany

Chapter 209 209. Imperfect Metrics
"So?" Dong Qiangqiang took a sip of Kim Baker, "What indicators are you looking at now?"

"First of all, I will look at the Bollinger Bands of a stock." Duanmu clicked the browser on the computer twice casually, but when the browser opened, it was blank, "I forgot to connect the network cable, do you have internet?" Duanmu He lowered his head to find the network cable port in the kitchen.

"Wait a minute." Dong Qiangqiang put the beer on the table and walked out of the kitchen.After a while, he walked in with a crystal port of a long network cable in his hand, and threw it on the table.

After connecting to the Internet, the browser page slowly unfolded, and the beautiful K-line chart and stock price of the public stock were presented in front of the two of them.

"There is a magical place in the German stock market that you must not have imagined. It is different from Asia and North America. They do not have the kind of brokerage institutions that we often see in China, so there is no free stock trading software. Many free broadcasts The stock price on the stock information platform is lagged by 15 minutes, so when placing an order, you should leave some margin in the transaction price. I heard that some platforms can provide real-time stock prices, but the cost is not low, and I haven’t paid for it yet. Duanmu lowered his head and took out an A4-sized notebook from his schoolbag, and after turning over a page, a K-line chart of a stock appeared in front of Dong Qiangqiang.

Dong Qiangqiang saw at a glance that the K-line chart on the notebook was exactly the same as the public stock K-line chart on the computer: "Did you draw this?"

"The yellow line above the K-line chart is the Bollinger Band, as are the purple line below and the dotted line in the middle." Duanmu said it directly without waiting for Dong Qiangqiang to ask. He looked at Dong Qiangqiang while drinking beer, "You What do these three Bollinger Bands look like?"

"It's like a channel." Dong Qiangqiang tilted his head and looked at it for a while, "The K-line chart you drew has been moving up and down in the Bollinger Bands."

"That's right, the Bollinger Band is like a highway, and the K line is like a car speeding inside."

"Just relying on these three lines is enough?" Dong Qiangqiang looked suspicious.

Duanmu laughed: "No, no, no. This is just the first indicator. But don't underestimate these three lines, they allow us to see the movement track of the stock price. I calculated these lines one by one according to the formula value, and then the line. You won't find that on those free stock information sites."

"Then what's the next step?" Dong Qiangqiang had never been exposed to this kind of stuff when he was trading in stocks before. Hearing Duanmu's eloquence, it seemed very interesting, and he couldn't help but also greatly increased his interest.

"The next indicator is a heavyweight," Duanmu smiled mysteriously, "it's called RSI."

"What is that?" Dong Qiangqiang wrote three letters on the napkin in a daze.

"Its full name is Relative Strength Index, translated into Chinese as Relative Strength Index, which was first used in the futures market in the United States. Its curve is based on the number of points and the rise in a stock price within a certain period of time, such as 7 days or 14 days. It is drawn by the ratio of the sum of points down. It is a very useful indicator of overbought and oversold, which is very suitable for short-term trading, especially for a T+0 stock market like Germany."

"T+0 means that you can buy and then sell the same stock on the same day?" Dong Qiangqiang has just accumulated a lot of stock knowledge, and hurriedly learns and sells now, "But what is the overbought and oversold indicator?"

"Look at the RSI chart of the previous stock prices of the public stocks I drew first. What do you find?" Duanmu proudly turned the book to the next page, and Dong Qiangqiang saw a curve that kept moving up and down between 0 and 100%.

"Well, this line always changes between 0 and 1?"

"According to the theory of relative strength index, the RSI value of the stock price will always fluctuate between 0 and 1. Most of the time, the RSI value will be between 30% and 70%, but do you see here, here, and here? ?” Duanmu said while pointing his fingers at the three red circles marked on the RSI line.

"The RSI values ​​in these three places are all below 10%." Dong Qiangqiang quickly found the common ground of the three red circles.

"Then look at the change in the RSI value after the red circle." Duanmu reminded.

"After the first red circle, the RSI slowly...returned to 30%? After the second red circle, the RSI returned to 70%? After the third red circle, oh my god, this RSI rushed to 90%? "Dong Qiangqiang felt incredible.

"According to its theory, if the RSI value exceeds 80%, it means that it has reached an overbought market, which means that investors need to be careful that the stock price will fall back at any time. But once the stock price is sideways at 30%, or even continues at 10 If it is sluggish below %, be careful that the price will suddenly rebound strongly.”

"But when I was investing in stocks in China, I always heard people say that 'every time will fall'. Isn't this RSI also like this?" Dong Qiangqiang questioned.

"People say that a high level will fall for a long time," Duanmu explained with a smile, "and the second half of the sentence, a low level will rise for a long time. What I understand about this high level is that the RSI value is always higher than 70% or even 80%. That is, the RSI value continues to be below 10%."

"So this is a technical indicator that can help us quickly judge whether it is suitable to buy stocks immediately?" Dong Qiangqiang looked at the confident Duanmu and asked with a smile, "And this is the stock price of Volkswagen in the past few weeks, and the curve of the last 14 days Have you already drawn the picture?"

Duanmu had a good time, and turned another page. As expected, the picture had already been drawn.

Dong Qiangqiang saw at a glance that the recent RSI value of Volkswagen's stock price was fluctuating around 20%, and he couldn't help but shudder.He pointed at the picture with his finger, looked at Duanmu ecstatically and said, "Now is the time to buy?"

"Any technical indicator is not perfect, and it is deceptive." Duanmu suddenly changed the subject, "RSI is no exception, just looking at it is not enough."

"Huh?" It turns out that being so lively is a useless indicator?Dong Qiangqiang almost sprayed the notebook with a sip of wine.

"The RSI value is calculated using the opening price and closing price. If the stock's trading price on the previous day has skyrocketed or plummeted, this value will be unstable. After all, German stocks have no ceiling and circuit breaker mechanism. An increase of 100% to 500% is possible."

Dong Qiangqiang was speechless for a while, he knew that German stocks did not have a limit on the rise and fall of stock prices.

"Second point, there are many factors that affect stock price changes. In addition to many normal factors, such as the recent financial situation of listed companies, market risks of products, policy uncertainty, etc., there will also be some random, hidden, and unquantifiable factors. Factors can affect stock prices, such as people's expectations."

"Is that what you said before, investors' views and judgments on a company's future?"

"Yes." Duanmu said with a serious expression, "If a listed company's financial data is average, but it discloses some news that meets people's expectations, then the company's stock price may first rise and then fall. At this time, the stock price There will be lag. If this is the case, looking at any one technical indicator is one-sided.”

"Is there no other way at this time?" Based on Dong Qiangqiang's understanding of Duanmu, he believes that Duanmu must have the answer.

"Hey," Duanmu smiled secretly, raised his head and drank the beer in the bottle, "One more bottle."

(Special acknowledgment for this chapter: Zhao’s family members and shark wolf’s recommendation tickets)
(End of this chapter)