In the previous section, we discussed an article that helps you tackle 90% of investment challenges: the uncertainty of volatility and the stability of trends. Buy based on trend, sell based on volatility.

Once this statement is made, we understand what we should rely on for buying and selling. In the past, when we used indicators or other tools, it was easy to resolve issues when they malfunctioned.

For example, let's look at these three indicators on the chart.

1. RSI

You can see the first indicator, RSI. It fluctuates wildly, with very high volatility, no discernible pattern, and it's not easy to see any so-called trend.

If you happen to catch it in an upward trend, you might succeed. But if at this moment the indicator is in a sideways trend or a downward trend, the likelihood of failure greatly increases, right? Therefore, the RSI indicator is too volatile and should not be used as a basis for buying.

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2. KDJ

The KDJ indicator is obviously slightly better than RSI. It has some elements of trendiness, but it's very subtle and still primarily characterized by volatility.

So, the KDJ indicator might work well if it happens to be in an upward trend, but if it's in one of the other two trends, it might not be as effective. Therefore, its volatility is still quite strong, and KDJ is also not very easy to use.

3. MACD

The MACD indicator is a combination of two lines, the MACD line and the signal line. It is designed to show the relationship between two moving averages and can be used to identify trends and potential reversal points. However, like the other indicators mentioned, it also has its limitations and should be used in conjunction with other analysis tools for a more comprehensive understanding of the market.The MACD indicator has a relatively clear trend.

However, has it significantly removed the component of volatility? Volatility still exists, and there is no distinction between high and low positions. The trend is already quite evident, but it is not enough.

4. Moving Averages

The trend of moving averages is the best. But long-term moving averages have too much lag, and short-term moving averages are too volatile. In this process, a choice dilemma will arise among many investors, whether to choose the 5-day moving average, or the 10-day moving average, or the 60-day moving average?

So we need to recognize what characteristics this indicator has, whether it is volatility or trend.

If you want to buy, and we only have these traditional indicators in the computer system, we should try to choose MACD, because its trend is relatively good, and there is some optimization of lag. The moving average can be used as a reference.

How to solve the lag of indicators

Next, according to our needs for volatility and trend, if we use a certain indicator to buy, then we optimize the buying indicator, which is called the dynamic accumulation indicator.

Its idea comes from MACD, but we have further optimized it, and you will find that the red and blue lines of the dynamic accumulation indicator in front of us have a very obvious trend, and its volatility is almost non-existent.

At the same time, we simulate the process of the bottom trend of some stock prices just moving from bearish to flat, and from flat to bullish, through some functional operations. Thus, we obtain the yellow block at the bottom.The yellow block here, we refer to these strips as "chip strips." When these chips appear, it signifies that the current stock price is at a trough, indicating accumulation activities, which greatly increases the likelihood of forming a bottom.

From this chart, we can see that this is the historical trend of Valin Steel. These three accumulation areas have very accurately captured the bottoms of multiple stocks, especially this accumulation interval.

We may not necessarily buy stocks that will rise the next day within this interval, but as long as you have enough time, the probability of making a profit in the end is still very high. Of course, there is also an extremely small possibility of losing money, which is if the stock steps on a mine and may be delisted, right? That's another matter.

Next up is the issue of our selling technique.

We've said that selling relies on volatility because volatility has a very sensitive characteristic. It doesn't have the significant lag that moving averages or the trend of our current indicator has after a rise. When selling, the trend has this lag, leading to us missing the selling point and allowing profits to fall back.

Based on the volatility indicator, we have optimized another indicator called the "High-Wave Ladder Wave."

We can see that this indicator has a black ladder line and a white arc line. It is concave and rises upwards. The stock price rises more and more slowly, but the white line starts to rise slowly and then accelerates, ensuring that if there is a continuous rise, the white line will quickly lift. This also ensures that we can sell at a higher point later on.

So today, we are focusing on introducing these two tools: one is the dynamic accumulation buying indicator, and the other is the High-Wave Ladder Wave selling indicator. With buying and selling, we then hand over the task to time, and our profits will be generated.

We must understand the correct use of volume, price, time, and space when trading stocks. Time is not used to measure when a turn will occur after a certain number of K-lines, but rather to use the element of time to understand that great profits are endured. It is through time that we can achieve them.

If you are in a hurry to make short-term gains and losses every day, by the end of the year, you may not make much money, and your position will still be small.Only through the accumulation of time can we achieve significant upswings in large waves, and since our positions are substantial, substantial profits will follow. Therefore, this is a fundamental issue of investment philosophy.

Here, I would like to caution everyone with a phrase: Choose the right stocks and the right timing, and profits are within reach. Making the right choice once is far better than making countless efforts, so we must select the correct investment methods and tools. I hope everyone's skills will greatly improve, and then our stock accounts will turn red with gains.