Volume-price-time-space

Volume-price-time-space is an important theoretical framework for stock market technical analysis. It comprehensively analyzes the trend of stocks and market behavior through four dimensions: volume (Volume), price (Stocks), time (time periods), and space (space, i.e. price changes or trend structures). The following will discuss and explain from the perspectives of volume, price, time, and space, combined with operational strategies.

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1. Volume: Volume

Core Idea: Volume is the driving force behind price changes, and changes in volume often indicate the future trend of prices.

Key Points of Observation:

1. Relationship between Volume and Price:

Rising price with increasing volume: Healthy uptrend with continuous capital inflow.

Rising price with decreasing volume: Weak uptrend, may face correction.

Price decrease with increasing volume: panic selling, accelerating the downtrend.

Price decrease with decreasing volume: weakening selling pressure, may see a rebound.

2. Abnormal changes in trading volume:

Breakout with volume surge: when the stock price breaks through key resistance levels, accompanied by increased volume confirming the trend.

Consolidation with low volume: a brief adjustment in the trend, potential continuation of the original trend after consolidation.

Practical advice:

Focus on the effectiveness of price breakouts during high volume, follow up in a timely manner.

Observe during low volume periods, wait for signals of volume and price alignment before taking action.

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2. Price: Price

Core idea: Price is a direct reflection of market supply and demand, and is the core of analyzing trends and trading decisions.

Key observations:

1. Trend Analysis:

Upward trend: Continuously higher highs and higher lows.

Downtrend: Continuously lower highs and lower lows.

Sideways consolidation: Price fluctuates within a certain range.

2. Key Price Points:

Resistance: A position where bid is stronger during the decline, usually an entry point.

Support: A position where ask is stronger during the rise, usually a profit-taking point.

3. Candlestick and Moving Averages:

Short-term moving averages (e.g. 20 days) are used to capture short-term fluctuations.

Long-term moving averages (e.g. 60 days, 200 days) are used to determine medium to long-term trends.

Practical Suggestions:

Buy when the price breaks through important resistance levels, stop loss when it falls below important support levels.

In combination with volume observation, avoid relying solely on price behavior.

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3. Time: Time Period

Core Idea: Time is a key dimension of trend evolution, the market's ups and downs and adjustments all have their periodicity.

Observation Points:

1. Trend Period:

Short-term: daily and hourly charts are suitable for capturing rapid fluctuations.

Medium-term: weekly charts are suitable for observing trending market movements.

Long-term: monthly chart, suitable for determining the major trend.

2. Time window:

Key time periods: The market may experience reversals at certain important time points (such as earnings release dates, policy announcements, etc.).

Duration: The longer the trend continues, the higher the probability of a reversal.

Implementation suggestions:

Combine short-term operations with daily charts to avoid neglecting the long-term trend.

For medium to long-term trends, observe whether the time window is approaching potential turning points.

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4. Short: Space

Core Idea: Space reflects the magnitude of price movements, serving as a direct measure of profit and risk.

Key Observations:

1. Price Movement:

Exercise caution when the price rises too sharply, and pay attention to the possibility of a correction.

When the price falls sharply, observe for signs of stabilization.

2. Spatial Structure:

Breaking Space: The potential target level after the stock price breaks through the consolidation range.

Pullback Space: Is the stock price approaching the key support level when it pulls back?

3. Relative Spatial Position:

High Position: There is higher risk when the stock price is at a relatively high level.

Low Position: There are more opportunities when the stock price is at a relatively low level.

Practical Suggestions:

Set reasonable target prices in an uptrend, and take profit in batches.

In a downtrend, avoid blindly buying on dips and wait for stabilization signals in the space.

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Application of the integration of volume and price over time and space.

Comprehensive Principles:

1. Volume is the leader, price is the result:

Volume confirms the effectiveness of prices, focus on price breakthroughs or pullbacks when volume increases.

2. Time determines trends, space determines profits:

The longer the trend lasts, the greater the probability of adjustment.

Reasonably evaluate target space to avoid chasing highs and selling lows.

Practical case study:

Trend breakout trade:

Observe whether the stock price breakthrough of resistance accompanied by an increase in volume.

If there is a breakout with high volume, set target and stop-loss levels after entering the market.

Buy on pullback trade:

In an uptrend, observe whether the stock price stabilizes with decreasing volume when pulling back to the support level.

After confirming the support, buy and set a stop-loss below the support level.

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Summary: The trading philosophy of volume-price-time.

Volume is essential: Immeasurable, the change in volume reveals the market's capital intentions.

Price is the core: Price behavior reflects the psychological expectations and supply-demand relationship of market participants.

Timing is crucial: Choose the right time to enter and exit, and follow the market's rhythm.

Space is the target: Evaluate the size of the space, ensuring a reasonable risk and reward ratio.

Through a comprehensive analysis of volume, price, timing, and space, traders can better grasp trends, avoid blind trades, and achieve steady profits.