Terminological Explanation and Recognition Method of Candlestick Diagram

Note that the understanding of the description of the candlestick pattern described in this article goes beyond the pattern itself to the grasp of market psychology.

The candlestick chart not only shows the market price changes during the day, but also the price changes it shows and the associated price changes before and after, which can accurately see the price trend of the market so far, and also hints at the future trend of the market.

This paper is only based on the k-line, and correct judgments must be combined with relevant indicators.

In addition, I have also seen some articles about the k-line, which is quite incisive. Here is a brief quote for your reference. Because the k-line can detect the long-term changes in the market as soon as possible in a relatively short period of time, the k-line chart is called a very powerful sword. But as everyone knows, a sharp sword also needs to be controlled by a martial arts master, otherwise, it is very easy to hurt yourself while dealing with the enemy.

basic form

Opening price: The starting price of the day. This price is actually determined by the buy and sell orders placed before the start. If the order quantity is small, the opening price may also appear after the market opens.

Highest price: The highest price among the prices bought and sold on that day.

Lowest price: The lowest price in a single day.

Closing price: The last price established in the day's trading. It is not necessarily the price at the close of the market. When there is very little volume, there may also be situations such as the opening price and the closing price. When the market falls sharply, there is a large amount of selling in a period of time close to the closing, resulting in a sharp drop in the market price after the closing time. (This is the reason why the US-Canada market rose sharply to around 1.38 the day before yesterday.)

Types and judgments of candlesticks

upper shadow

There is only the upper shadow, or the k-line where the upper shadow is longer than the lower shadow. Indicates that during a certain period of the day, although there is a large amount of buying that causes the price to rise, the situation then reverses, the seller's power tends to gain advantage, and the price falls as a result. Both positive and negative lines signal a decline in price.

lower shadow

Only the lower shadow, or the k-line chart where the lower shadow is significantly longer than the upper shadow. Indicates that there is a lot of selling gas at a certain time of the day, but then the situation reverses and the buyer's power becomes stronger, causing the price to rise. Both positive and negative lines suggest that the market outlook will rise.

bald wire

A long k-line chart without hatching. It is easy to appear when there is consensus material in the market. The price extends sharply in one direction. The positive line indicates that the buyer is overpowering, and the negative line indicates that the seller is overpowering. It is generally believed that a trend reversal will occur when a bald line appears at the reserve price and a bald sinister appears at the high price.

Open shaved line

The long K line of the shadowless line in the opening direction. The positive line is after the opening, the price rises sharply, but near the end, the rise cannot be sustained, and the price falls slightly and closes. The negative line is after the opening, the price falls sharply, but near the end, the price rises slightly. Although it is not as powerful as the bald line, it is also considered to express the advantages of their respective buying and selling forces.

The closing bald line refers to the long k line of the shadowless line in the closing direction. The positive line indicates that although the price fell for a period of time, the price rose sharply by the end of the day. The negative line indicates that the price rose for a period of time, but then the situation reversed and the price was closed at a price significantly lower than the opening price. Like the bald line, it indicates a considerable degree of strength in each case.

Small line physical and shadow line are very short k line. Refers to from the opening to the closing, the price does not change much during the day. The market atmosphere is confused and has no sense of direction. Indicates that the market is recuperating and confused. When the current period appears at high and low prices, it indicates that the market trend for a period of time no longer exists and is about to reverse.

Abandoned child line K line with a short entity and a long shadow line. The market is mixed. For a period of time, the buyer is strong, the price rises, and then the seller is strong, and the price falls accordingly. Finally, the price closes without much change. Because both sides are very powerful, there is a confrontation, and the sense of direction is not obvious. It means that the person who picks up the child returns to the place where the child was abandoned in order to determine the parents of the child.

The long lower shadow is three times the length of the entity. It is named because it looks like an umbrella and strongly supports the price. The positive line indicates a period of heavy selling pressure, followed by a large number of buying orders, so that the price is higher than the opening price. Indicates that the buyer's power is stronger, indicating the subsequent rise. The negative line indicates that the buyer's power is less than the seller's power, and the price is lower than the opening price. When it appears in the high price circle, it indicates a decline, and when it appears in the low price circle, it indicates an increase.