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Wyckoff defines emerging strength and emerging weakness as follows:
SOS (Sign of Strength) appears strong, the price rises and the volume increases at the same time, and the price difference becomes larger. The first signs of strength often occur after the spring, and Wyckoff analysts use this to determine whether the previous reading of the market was correct.
SOW (Sign of Weakness), weak signal, this is the behavior of falling to the lower edge of the trading range, or slightly falling below the lower edge. Usually a decline in a weak signal will result in an increase in spread and volume. Automatic declines and signals of weakness indicate the beginning of a change in the characteristics of prices: now supply has the upper hand.
The strong or weak K-line at the end of the structure is the guide of the fairy, which clearly indicates the next direction of the market for us, as follows:
Strong appearance
W bottom right leg
right shoulder
right shoulder of head shoulder relay
There was a violent rebound on the right shoulder, and the top of the head and shoulders became a relay of the head and shoulders.
False break of M head
After falling below the head, a strong breakthrough returned above the neckline.
Weakness appears
M head right head
head shoulder right shoulder
Backtest after breakout
After falling below the head, the neckline was tested back, and the volume fell.
Break below the ascending channel
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