I believe that many foreign exchange friends have read the book "Japanese Candlestick Chart Technology". Impressed. But in this book, there are a lot of K-line patterns and K-line combinations, which may cause friends to be confused in the real trading process, or have blurred memories, etc., so I will use a few articles Let's talk about the K-line shape in detail.
K line is still very important to me personally. Because I mastered the use of K-line, I was able to be familiar with the way in the subsequent trading process, like a fish in water. So since we are going to talk about K-line, let’s start with its origin.
K-line, also called candle chart, originated in Japan and was invented by a Japanese rice shop owner to record the market and price of the rice market. Because of its incomparable advantages of bamboo charts and line charts, it was gradually introduced into the stock market and futures markets, and was introduced from Japan to Western countries, favored by global investors. After Steve Nison introduced the candle chart to the West, traders combined it with Western trading techniques, making the candle chart more widely used. When you are communicating now, you should be able to see that many people use candle charts to tell stories, while only a few people use bamboo charts or line charts.
Many Hui friends think that the candle chart is very simple at the beginning, and it is precisely because of this erroneous perception that the subsequent transactions are not smooth and so on. Because you don't pay attention to it ideologically, you won't pay attention to its usage and form, so the result will be a loss for you, and it will seriously cause you to lose confidence in the analysis of candlestick charts. Then in this section, I will tell you the classic form of candle chart and the correct use method from the shallower to the deeper, laying the foundation for the following chapters. Please read patiently.
Definition of candle chart: Candle chart is also called K line, which is generated by the imbalance of market supply and demand within a certain period of time. It is drawn using five forms: open price, close price, high point, low point, and different colors (also solid and hollow). According to the different time periods, we can generally see nine periods of monthly, weekly, daily, 4-hour, 1-hour, 30-minute, 15-minute, 5-minute and 1-minute periods on our disk. For example: if we are looking at a 4-hour period, what the single k-line represents is the record of the highest price, lowest price, opening price, closing price and color of the 4 hours (the color mainly indicates the long-short direction), the daily chart It is to record the 24-hour price of this day, and so on.
As shown in the figure above, when the opening price of the K line is higher than the closing price, it means that this K line is in the direction of a short position, which is also called Yinxian. On the contrary, when the opening price of the K line is lower than the closing price, it means that this K line The line is the long direction, also called the Yang line.
In our disk, we will see that the size or fluctuation range of each k-line is different. So let's briefly talk about the two kinds of K-lines later:
1. Big Yinxian and Big Yangxian
As shown in the figure above, the solid part of the K-line circled in the two circles is obviously larger than the other K-lines. The one on the left is the big Yin line, and the one on the right is the big Yang line (according to different personal habits, the color may vary. different, and will not be repeated here). Generally speaking, the big Yin line or the big Yang line have very short or almost no shadow lines, and very large entity parts. The big Yin line represents that during this period, the bears are very strong, and the big Yang line represents that the bulls are very strong during this period.
If the big negative line appears in the bullish trend, it can basically indicate that there is relatively strong resistance above, then this wave of bullishness may be reversed. If the big negative line appears in the process of falling, it can basically show that the bear force is still strong, and the probability of breaking new lows in the market outlook will be higher. The big Yang line is just the opposite of the big Yin line.
As shown in the picture above, there are three big positive lines, and the price is constantly hitting new highs.
Small Yinxian and Xiaoyangxian:
For the four candlesticks circled in the picture above, the green ones are small positive lines, and the red ones are small negative lines. The entities of the small Yinxian and Xiaoyangxian are very small, and the shadow line is not too long. The meaning it represents is that the original trend is gradually weakening to a certain extent, and the trend will come to an end, but it does not necessarily mean a change in trend, and it may also turn into a shock; in addition, the small Yin line and the small Yang line also represent an unclear direction. Therefore, a single small yin line and small yang line can hardly be used to judge the market outlook, so it is necessary to cooperate with other reversal or continuation K-lines to judge the market outlook. As shown below:
Here is the small Yang line combined with the cross star on the left, which finally changes the originally rising market into a falling market. What I want to explain here is that not every time such a situation occurs, it can be judged that the market has changed its trend. Here is just an example.
We will stop here today, please pay attention!
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