Part One: How to tell whether people are inclined to buy a share?

Hi, mooers!
The 5th TA challenge is live! If you stick with us from the first TA challenge, you have definitely learned a lot about using different technical analysis indicators. TA challenge is a healthy recipe for taking in technical analysis knowledge. We will make the content easy to understand and teach you how to use combinations of them, so you can become a better technical analysis trader! Hope you enjoy the healthy food for the mind and earn more from the market!

In this new session, we're going to learn how to use people's emotions to time entry and exit points. Sounds fantastic, right? Scroll down, and let's explore the new indicator!

What's PSY?
The Psychological Line (PSY) is an indicator based on the presumption that people will resist paying more for a share than others unless the stock continues to move up. Conversely, people resist selling a stock for less than others have been getting for it, except if the price continues to decline. Finally, people who purchase the stock at the top of a trading range tend to wait until the price comes back before they get out.

How does PSY work?
When PSY crosses line 70, the security is considered overbought. When its value is below 30, the security is considered oversold.

PSY case study

Part One: How to tell whether people are inclined to buy a share?

In February 2022, the stock's PSY crossed line 70, indicating that the stock price had been up for days and reached the overbought area. After that, a downward trend came, and the price fell. In March 2022, the stock's PSY crossed line 30. Its price went up for over 7 days until the PSY crossed line 70 and fell again.

Tips: Psychological Line can't predict the exact moment when the reversal strikes. You may spot the dip by combining it with other indicators based on your experience.

USD 20 Stock Cash Coupon Giveaways
Post your learning results by taping the discussion: TA Challenge: Emotional trading is bad? PSY doesn't think so!

Which of the following statement is correct?
PSY 70/30 indicates overbought/oversold
PSY 70/30 indicates oversold/overbought

Previous TA Posts:
MA:
Technical Analysis Challenge Day 1 -MA
Technical analysis challenge day 2 - MACD
Technical analysis challenge day 3 - EMA
Technical Analysis Challenge Day 4 - DMI

BB:
What are Bollinger Bands and how do you read them
How to recognize patterns with Bollinger Bands like a pro?
Ways to become an advanced trader with Bollinger Bands

RSI:
Seek to buy the dip with the RSI indicator
How do I use the RSI to trade?

KDJ:
What's KDJ & how does it work?
How do I use KDJ to trade?

Disclaimer: This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal.

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