The drawing method of K-line chart in stock market and futures market includes four data: opening price, highest price, lowest price and closing price. All K-lines are centered around these four data, reflecting the general situation and price information. If you put the daily K-line chart on a piece of paper, you can get the daily K-line chart, and you can also draw the weekly K-line chart and the monthly K-line chart.
K-line chart is a kind of chart source in Tokugawa shogunate era in Japan. It was used by businessmen in Japanese rice market at that time to record the market and price fluctuation of rice market, and then it was introduced into stock market and futures market because of its ingenious and unique drawing method.
At present, this chart analysis method is particularly popular in China and even the whole Southeast Asia. Because the chart drawn in this way looks like candles, and these candles are black and white, it is also called yin-yang line chart.
Through the K-line chart, we can completely record the daily or periodic market performance. After a period of trading, the stock price forms a special region or form on the chart, and different forms show different meanings.
We can find some regular things from these morphological changes. The forms of K-line chart can be divided into reverse form, arrangement form, gap and trend line.
So, why is it called "K-line"? In fact, the word "K" in Japan is not written as "K", but as "_" (Japanese pronunciation reads kei). The K-line is the pronunciation of "_ line", and the K-line chart is called "_ line", which is developed from the literal translation of the first letter "K" in western English.
Although the analysis of indicators and K-line chart is an essential process of trading, it can only be used as a reference tool for technical analysis.
According to a classic K-line chart or a commonly used indicator, the conclusion may not be valid, and the specific analysis should be different.
The application of indicators is often a statistical analysis or observation of data changes over a period of time, but there may be operational factors in the data during this period, or the changes caused by fundamentals and news in a period of time have affected the trend as a whole, which may affect the accuracy of indicators, as does the K-line chart.
Are more or less affected by some external factors, which are not absolute.
In daily trading, some traders often make a comprehensive analysis of several different technical indicators, but only using indicators or K-line charts comprehensively may not only blur the original correct direction, but also make the trading process more complicated.
Global Jinhui said that the correct approach is to comprehensively use technical indicators and K-line charts to think in two directions, as an auxiliary tool for analysis, so as to make the conclusion more credible.