Question: What is the annual line? What does the annual line mean?
The so-called annual line, in essence, is still a simple moving average line, only its parameter has a certain special significance. As an annual line, the parameter is usually set to 250 days, and some investors also use the original number of 360 days. The reason why 250 days is used as the standard for the annual line is that according to the calculation of 365 days, deducting all kinds of holidays in a year, the remaining trading time is roughly around 250 days. Therefore, based on the principle that analysis tools closely follow the trading time standard, the market eventually defaults to 250 days as the annual line parameter. From the above description, we can pay attention to one issue: from the calculation process, the result of 250 days is quite rough, meaning that the annual line itself is not a moving average line representing precise annual trading days (in fact, if calculated strictly according to trading days, deducting all market closure days, the annual line parameter should be around 230).
250-day annual line: This is the average stock index or stock price over 250 days. This average is generated every day, and after a period of time, a relatively smooth curve can be seen.