PSY – Sentiment indicator The PSY is used to study the psychology and fact that trades tend to be on the buyer or seller side over a period of time. It is used as an indicator, usually 12 days for short-term trades and 24 days for medium-term trades.
(1) Calculation method (with 12 days as the coefficient) : PSY=100X(12 days of rise /12)(2) Application rules: (a) 25% to 75% is a reasonable range of variation for psychological line index intervention.
If it is above 75% or below 25%, it will be overbought or oversold.
Overbuy and oversell can adjust to 83% and 17% in the early stages of the overbuy and airdrop market, and then to 75% and 25% near the end.
(b) The oversold nadir usually occurs twice before the rally begins;
The overbought peak usually occurs twice before the decline begins.
(c) The time to sell is when the peak occurs twice;
The time to sell is when the low density occurs twice.
(d) When it is below 10%, it is truly overbought and there is a high chance of a reversal, which is an opportunity to sell;
When it is above 90%, it is truly oversold and there is a significant chance of a reversal, which is a selling opportunity.
(e) Psyline (PSY) is used with volume ratio (VR), which determines short-term trading points and can find the highs and lows of each wave.(f) Psyline is used with counterclockwise curves to improve accuracy and clearly indicate tops and bottoms.
Markets shrugged off the Fed‘s doubling, the dollar fell from a three-week high and gold rallied more than $20.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
