Moving averages, as they follow the stock price on an upward trajectory, do not imply a perpetual rise without any dips. Thus, when the upward momentum gradually diminishes, the trend at the top will tend to flatten out, which is analogous to the situation at the bottom. After the downward momentum is exhausted, the trend will flatten out, and similarly, the force driving the rise will be consumed during the process of the ascent, leading to a period of consolidation in the K-line chart at the end or in the middle of the uptrend.

As the stock price and the K-line chart flatten out, the moving averages will also slow down relatively. During this process, since the K-line has been following the daily trend while the moving average is an average over many days, it cannot keep up with the pace of the K-line.

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Therefore, during the uptrend, the distance between the K-line and the moving average will only narrow when the K-line flattens out. During the narrowing process, the K-line breaks down from above through the moving average.

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When the stock price and the K-line break through the moving average and rise again from the bottom without passing through the moving average, this is generally an opportunity for us to sell.

Because as the stock price slows down or moves lower, the price of the moving average will also slow down and turn downward, completing a certain phase of the uptrend and beginning its downtrend.

So, do not attempt to sell at the highest point or buy at the lowest point; that is the principle. During the ascent, each of your buying and selling actions may be a mistake.

However, you only become the winner, you are only correct, if you sell at the highest point. Compared to the numerous mistakes in selling in the middle, the probability of this choice is very small. Therefore, we should sell at relatively certain opportunities when the trend is downward, just as we do not buy at the lowest point, and do not attempt to sell at the highest point, but rather sell after the breakdown and when the upward push fails to pass through the moving average. This is the first opportunity to sell.

2The second timing to sell is when the stock price is falling and the moving average is also moving downward. We think it has reached the bottom, and it breaks through the moving average upward. At this time, the first buy signal we previously discussed is triggered—entry. However, after buying, it turns around and falls again, breaking through the moving average once more. This is the timing we previously mentioned for selling, which is the second sell signal.

What needs to be noted here is that the farther the K-line is from the moving average, the greater the chance of a pullback after breaking through and then breaking down again. In other words, a rebound that deviates far from the moving average consumes a lot of bullish momentum. Therefore, when it breaks down through the moving average again at this point, it accumulates a lot of short-selling force and energy.

So, generally, after selling at this time, it is not recommended to buy, even if it turns around and goes up, it is not recommended to buy temporarily. This requires everyone's attention.

Especially when all cycles are moving downward, if we sell out at this point, and it clearly stands up, you don't let me buy in. When should I buy in? Further upward, when it pulls back upward again, it does not break through the high point of the first breakthrough of the moving average. At this time, there are opportunities to enter, so for a big trend, do not try to buy at the low point, that's the principle.

In addition, when the stock price trend line is below the average line and has been below it all along, when the rebound does not break through the moving average, but just approaches the moving average, and it falls back again, this is our selling opportunity. Similarly, as we previously discussed, when my upward trend steps back and does not break the moving average, that is my opportunity to add to my position.

This is exactly the opposite. When the rebound does not even break through the moving average and goes downward upon touching it, it indicates weakness, and this is a time to sell. If this happens in futures or foreign exchange, this is an opportunity to add to short positions. Stocks do not have short selling, so stocks are excluded.

The third type is when the stock price is in an upward process but is above the average line, and suddenly there is a sharp rise or pull-up. Although we do not aim to sell at the highest point, when there is a sudden acceleration upward and the moving average cannot keep up, because the moving average is the price over a period of time, for example, the 20-day moving average, the arithmetic average of your stock price over 20 days and the value on a certain day, the increase is different, and the slope is different.

So when there is a significant pull-up that moves far away from the average line, it is likely to trend back towards the average line, and when it moves down and approaches the average line, this is the time for us to sell. This is similar to buying when it is far away from the average line during a downward process, which is the third sell signal.As for selling, there are probably these three types, and everyone must adhere to one principle, which is still the issue of the angle of the moving average. When it's rising, we emphasize that there should be an angle, preferably above 45 degrees, to use these buying opportunities.

Similarly, during the process of falling, we will also adopt this method. If the moving average tends to flatten and remains in a horizontal fluctuation state for a certain period, we do not recommend frequently using this method to enter and exit, or you sell once, and it turns around and rises again, unless it breaks a new high, then we will choose this kind of selling and the timing based on the moving average line to issue this kind of signal.

The third situation is when the stock price suddenly soars and is far from the moving average. If its first step back is close to the moving average line, we can take a small, short entry to make a rebound. If it breaks through directly, we will stop loss immediately.

Of course, this method is more difficult in stocks because it cannot be sold immediately, so what should we do?

So I would choose to sell 5 or 10 minutes before the market closes, using time to eliminate the risk of the buying opportunity. The shorter the time, the less risk we have, which is very important and a practical choice. We have also given this method a name called "early out, late back."

What is "early out, late back"?

In the morning, I will sell it, and when it's almost time to close, very late, I will buy back. Through this method, there will be a better way to avoid the risk of sudden falls in the market during a bear market, and this method is also for everyone's reference.

The above is the three ways of selling signals I have talked about:

1. When the stock price is rising, the stock price is flat, and the stock price breaks through the moving average line downward, sell, this is the first situation;

2. The second situation is the rebound generated during the falling trend process, breaking through the moving average line, when the stock price falls through the moving average line from above, this timing is my choice to sell;3. A continuous decline followed by a rebound that fails to break through the moving average line above, and then turns back down, is a time for me to sell. If this occurs during futures, forex, or gold and crude oil trading, I can add to my short position.

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