V-shaped reversal is due to the great power of sellers in the market, which makes the stock price fall steadily and continuously. When this selling right disappears, the buyer's power completely controls the whole market, causing the stock price to rise sharply and recover all the lost land at almost the same speed as when it fell. Therefore, the operation of the stock price on the chart has formed a V-shaped trajectory.
V-shaped reversal is a common and strong reversal form in actual combat, which often appears when the market fluctuates violently. There is only one low point or high point at the bottom or top of the price, and then the original running trend is changed, and the stock price changes sharply in the opposite direction.
I. Trend analysis
1. Descending stage: Usually, the left side of the V-shape descends very steeply and lasts for a short time.
2. Turning point: The bottom of the V-shape is very sharp. Generally speaking, it only takes three or two trading days to form this inflection point, and the number of transactions at this low point has increased significantly. Sometimes the turning point occurs in a panic trading day.
3. Recovery stage: Then the stock price rebounded from the low point, and the trading volume also increased.
The trend of "extending V" is the deformation of "V trend". In the process of V-shaped trend formation, there is variation in the rising (or falling) stage, and some stock prices appear in the horizontal trading area, then break through the wandering area and continue to complete the whole pattern. The extended V-shaped trend is in the rising or falling stage, and some of them are in the rampage area. This is because some people have no confidence in the pattern during the formation of this trend. When this force is digested, the stock price will continue to complete the whole pattern. When there is a wandering area that extends the V-shaped trend, you can buy at the low point of the wandering area and wait for the completion of the whole type. Extended V-shaped and V-shaped trends have the same forecasting ability.
Second, the operation method
1. Before the bottom of V-shape appeared, there was a very obvious trend in the market. Moreover, in the process of V-shaped bottom fluctuation, there is basically no adjustment, and there is often a gap, which is often interpreted by investors as the market is out of control. This model usually appears when there is significant positive news in the foreign exchange market.
2. After the appearance of V-shaped bottom, it generally means that the foreign exchange market will usher in a round of inflation in the later period. If investors misjudge the direction of operation at this time, they must seize the time to flee, and stop loss and take profit should be set properly in specific operations.
3. Under normal circumstances, the V-shaped bottom in the fluctuation trend of the foreign exchange market is generally not very solid, and a false V-shaped bottom often appears. When operating, you must confirm it repeatedly and trade carefully. [2]