freespincasinonodepositbonuscodes2021| Explanation of stock trading terms: Application of LSI indicators

In the stock marketFreespincasinonodepositbonuscodes2021Every trader and investor needs to master certain technical analysis tools to better understand market dynamics and make wise investment decisions. Among them, LSI (Legend Stock Index) is one of the important analysis tools. In this article, we will explain in detail the principle and application of LSI index and how to use it to guide stock trading decisions.

1. The basic principle of LSI index

The LSI index is a momentum index invented by Steve Legler. It is mainly used to measure the intensity of the stock price relative to its own historical fluctuations, in order to evaluate the trading pressure of the stock. The calculation formula of LSI index is based on the difference between the stock price and its historical average price, and a value between 0 and 100 is obtained through certain mathematical transformation.

2. The application method of LSI index

oneFreespincasinonodepositbonuscodes2021. Overbought and oversold signals: when the LSI index reaches 80 or more, this usually means that the stock is overbought and there may be the risk of price correction; on the contrary, when the LSI index falls to 20 or less, the stock may be oversold and has the potential to rise in price.

two。 Cross signal: when the LSI index crosses the dividing line of 50 from below, it can be regarded as a buy signal, while when the LSI index crosses 50 from above, it is a sell signal.

3. Deviation phenomenon: if stock prices hit new highs, but the LSI index does not hit new highs at the same time, it may indicate that prices are about to peak; conversely, if stock prices hit new lows and LSI indicators fail to synchronize new lows, it may indicate that prices are about to hit bottom.

III. The combined use of LSI indicators and other technical indicators

In order to improve the accuracy of trading decisions, investors usually use LSI indicators in combination with other technical indicators. For example, LSI indicators can be combined with indicators such as the relative strength Index (RSI) or the moving average (MA) to obtain more comprehensive market information.

IV. Limitations of LSI indicators

Although LSI index can provide valuable trading signals in some cases, it also has some limitations. First of all, LSI indicators may produce lag phenomenon, that is, the emergence of index signals is often later than the actual changes in the market. Second, LSI indicators may be affected by market fluctuations, resulting in misleading signals. Therefore, when using LSI indicators, investors should combine other analysis tools and market information, make comprehensive judgments and make prudent decisions.

V. case study

Through the above cases, we can see the application effect of LSI indicators in the actual operation. On March 15, 2022, the stock price reaches 55.00, while the LSI index value is 85, indicating that the stock is overbought and investors can consider selling; while on April 5, 2022, the stock price falls to 45.00 and the LSI index value is 15, indicating that the stock is oversold and investors can consider buying.