Candle charts, which we often call K-line charts, were originally created by an owner of a rice company in Japan, and later introduced to Western countries. They were adapted by traders in Western countries by combining analysis techniques such as line charts and bamboo charts. Later, it began to become an indispensable analysis tool for trading markets such as stocks, foreign exchange, and futures.
Candle charts have four components: opening price, closing price, highest price, and lowest price. The structure is very simple, but because of its simplicity, many traders do not pay attention to candle charts, resulting in many losses or There hasn't been a good improvement in trading for many years. Today I will simply talk to you about the meaning of the "single" candlestick chart.
Candle charts are divided into two types: positive lines and negative lines. A positive line means that the opening price is at the bottom and the closing price is at the top, which means that the price has risen; We generally call it an entity. In order to distinguish better, the candle chart is generally divided into two colors. In the domestic stock market, the positive line is generally red and the negative line is green, but in the international market it is just the opposite. The positive line is green and the negative line is red. Today all The pictures are all using the colors in the international market.
According to the distribution of time periods, candlestick charts can be divided into monthly charts, weekly charts, daily charts, 4-hour charts, 1-hour charts, 30-minute charts, 15-minute charts, 5-minute charts, and 1-minute charts. It represents the price position that the commodity has reached within 24 hours a day, the 1-hour chart represents the price position that the commodity has reached within this hour, and so on.
According to the strength of the candle chart, we can basically divide the candle chart into 5 levels: very strong, strong, average, not strong, and weak. Through the following figure, we will explain in detail:
Very strong: the body is very long, with no or almost no upper and lower shadow lines. The long body of the positive line means that the bulls (rising) are strong, and the market outlook is likely to continue to rise. There is a high probability that it will continue to fall.
Strong: The entity is a small positive line, with no or almost no upper shadow line, and a long lower shadow line, which means that the price once fell, but in the end, the strength of the short side was not as strong as that of the bulls, and it was swallowed up. The market outlook is likely to continue to rise; the entity is a small negative line , there is no or almost no lower shadow line, and the upper shadow line is very long, which means that the price once rose, but in the end the strength of the bull side was not as strong as that of the bear side and was swallowed up, and the market outlook is likely to continue to fall.
General: The upper and lower shadow lines and entities are relatively long, with no obvious advantages or very small advantages, and it is difficult to judge the market outlook.
Not strong: The entity is small and the upper and lower shadow lines are very long, which means that the long and short sides are competing fiercely. Although there is no obvious direction, if this form appears at a relative high or low point, it is likely to be a reversal Signal.
Weak: This situation is similar to the "strong" K-line shape, but it is not difficult to see that there is a longer upper shadow line above the Yang line, and a longer lower shadow line below the Yin line, so this K-line shape is not obvious direction at all.
The above five types can basically cover most of the single K-line forms, but the trading market is not a science, it is more like an art, so there will always be a fly in the ointment, and the K-line feedback form on the icon will also be slightly different , but as long as you can grasp the essentials of these five K-line patterns, you will get twice the result with half the effort in trading. But it has to be mentioned that any shape of a single K-line is not enough to be the only criterion for opening a position. We also need to judge whether it is necessary to open a position based on specific trends, positions and other conditions.
Thank you for your patience in reading, if you have any questions, please leave a message below. In the next article, I will explain several K-line combinations in detail for you. If you want to read it as soon as possible, please click the free follow. Your support is the biggest motivation for me to continue to output information!
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