K-line is generally divided into daily K-line, weekly K-line, monthly K-line and minute K-line according to different calculation units. Its formation depends on four data in each calculation unit, namely: opening price, highest price, lowest price and closing price. When the opening price is lower than the closing price, the K line is the positive line (generally in red); When the opening price is higher than the closing price, the K line is the negative line; When the opening price is equal to the closing price, the K line is called a cross star. When the K line is the positive line, the thin line between the highest price and the closing price is called the upper shadow line, the thin line between the lowest price and the opening price is called the lower shadow line, and the column between the opening price and the closing price is called the entity.
Because the drawing of K-line contains four basic data, we can judge the length of trading time from the type of K-line. When the opening price is equal to the lowest price and the closing price is equal to the highest price, the K line is called the bald Dayang line, indicating a strong rebound; When the opening price is equal to the highest price and the closing price is equal to the lowest price, the K line is called the big yinxian line, indicating that the exchange rate plummeted; When the opening price is equal to the closing price, and the upper shadow line is equivalent to the lower shadow line, the K-line is called the big cross star, indicating that the competition between long and short positions is fierce and evenly matched, and the market outlook often changes. When the cross star appears in a relatively high position on the K-line chart, it is called the sunset star; When the cross star appears at a relatively low position on the K-line chart, it is called the morning star. The comprehensive K-line type represents the difference of long and short power, with the cross star as the balance point, the positive line is dominant, the positive line is the strongest, the negative line is dominant, and the big negative line is the strongest. It should be noted that when investors look at the K-line, a single K-line is of little significance, but it is meaningful to compare it with the previous K-line.
Anti-transformation state (medium and long-term type):
A single K-line can reflect the change of price strength in a single day, but it can't accurately reflect the trend of price change in a period of time. Then, for the price changes in a period of time, we no longer judge by the shadow line of the K line, but by the medium-and long-term form formed after the connection of the K line. The long-term basic types of K-line are: head and shoulder top type (head and shoulder top, head and shoulder bottom); Double top (m head); Double bottom (W bottom), arc bottom (top) shape, etc.
① Head-shoulder type
After the K-line gathers for a period of time, there will be three vertices or bottoms in a certain price range, but the second vertex or bottom is higher or lower than the other two vertices or bottoms. This type is called head-shoulder type. One with two shoulders is the top of the head and shoulders; The one with one bottom and two shoulders is the head-shoulder bottom type. However, sometimes there may be more than three vertices or bottoms. If there is one or two heads (or bottoms) and two left and right shoulders, it is called a composite head and shoulder top (or a composite head and shoulder bottom).
Comments: Because the gold market is small and volatile, the probability that the head-shoulder shape appears in a long period (month, week) or a short period (daily chart) is relatively small, and the time required to build the shape does not need to be too long, generally 1 to 2 months. As shown in the following figure, from mid-September 2006 to the end of 10, the price of gold constructed a head-shoulder-bottom inversion pattern in less than two months, thus reversing the mid-term downward trend since the high of 730 in May.