Is short-term trading always being harvested by quantitative main players? Then using the 60-day line is enough. It tracks the medium-term fluctuations and can avoid over 85% of adjustment traps.
First, understand the core: the 60-day line represents the average cost over the past 60 trading days and is the "watershed" for judging medium-term trends. If the stock price is above it, it indicates that medium-term funds are making profits, and the trend is likely upward; if below it, medium-term funds are trapped, and the trend is weak. In simple terms, it serves as a guide to help you decide whether to "step on the gas" or "hit the brakes."
Here are 3 practical tips that beginners can use directly:
1. Buy on pullbacks that do not break: In an upward market, if the stock price pulls back to near the 60-day line but does not break below it (closing price above the average for 2-3 consecutive days), it is a buying opportunity.
2. Buy when it turns up: If the 60-day line slowly levels off from a downward trend and then starts to turn up, while the stock price stabilizes above the average, this is a signal of a medium-term trend reversal with a very high win rate.
3. Sell decisively on a break: This is the most critical risk control! If the stock price effectively breaks below the 60-day line (a drop of over 3% or unable to stay above for 2 consecutive days), it indicates that the medium-term trend is weakening. Don't harbor any delusions; quickly reduce your position or liquidate.
The core of using the 60-day line is "to go with the trend"; remember the mantra: hold stocks when above the line, hold cash when below, buy on pullbacks, and exit on breaks. Treat it as a risk control line, and it can at least help you avoid 3 years of detours!