In the process of judging the reversal, we all know that it should conform to the K-line pattern, or the market trend needs to conform to a specific graph to determine whether the reversal is true or not. However, many people do not have a particularly complete understanding of the pattern. It is easy to cause damage to the investment by following the script.
Today I want to take you to understand what details should be paid attention to about the reversal state. Through these details, how can we judge whether the reversal state is true?
This detail is the "shadow line" . This signal is often ignored by investors, but it is the decisive key. For a simple example, we all know that the shadow line is the trajectory of price fluctuations, so how much do you know about the shadow line? ?
This picture represents the inclusive pattern among the basic patterns of the K-line. I believe you all know it, but it is difficult to grasp the market conditions brought about by the pattern when it is used in the market. The line is "making trouble".
Different ways of moving the shadow line will lead to different interpretation methods of the pattern. For example, the presentation method in the picture below does not meet the requirements of the inclusive pattern, including the shadow line being too long, the relative position of the reference point is wrong, etc. wait.
Upper left : The upper shadow line of the falling K-line is too long, breaking the closing price of the rising K-line, and the containment pattern is broken.
Upper middle : The upper shadow line of the rising K line is too long, which means that there is still a certain amount of downward selling pressure.
Upper right : The lowest point of the rising K-line cannot be lower than the previous falling K-line.
Bottom left : the highest price of the falling candlestick breaks through the closing price of the rising candlestick, and is even higher than the highest point of the new candlestick.
Bottom and middle : Both sides have reverse long shadow lines, resulting in increased market uncertainties.
Bottom right : The lows and highs of both sides are equal, and the market has no basis for direction.
Theoretically speaking, first of all, the opening price of the previous falling K-line and the highest point of the shadow line must be below the closing price of the new rising K-line. Neither should be too long. Secondly, the lower shadow line of the new rising K-line is better to be higher than the lower shadow line of the previous falling K-line. Low, it means that the current market still has the ability to continue to hit new lows, and it is not suitable to use tolerance as a reversal point of view.
When the upper shadow line is quite long, it is particularly prominent compared with the K-line entity or the lower shadow line. It can be interpreted as a strong upward fluctuation during this period, but at the same time, there are other A more powerful downward force is suppressed, and at the end of the closing, it is the downward force that wins. Therefore, a negative line is displayed at the end. On the contrary, if the final closing shows an upward K line, it means that the bulls are still stronger, but the latter cannot. Include the reversal state for consideration.
In addition, it is also necessary to match the appropriate market to optimize the use of the pattern. For example, the rising K-line with a long lower shadow must appear at the low point of a certain market to be the most effective time. The falling K-line with a long upper shadow appears at the high point of a rising market, as shown in the two market charts below. If the position is wrong, the entire reversal signal will not exist, and these investors who operate according to the reversal logic will also be at the risk of losing money.
Regardless of the signal, shape, or trend of a single K-line, the shadow line accounts for a very important part. Although we mostly use the closing price of the real K-line as the basis for judgment in the process of analyzing the market, when we deal with details It is still necessary to take the shadow line into consideration, because the K-line can only tell you the result, while the shadow line trend can show the long-short pull during this period.
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