Graphs provide a brief price history, which is the most basic element of information for any trader. Graphs can give traders a good sense of market fluctuations, which is important for anticipating risks. Charts can be used as a tool to time market entries, and traders who use fundamental analysis methods also use charts to determine when to enter the market. Graphics are also a tool for fund management and can be used to determine the specific price of stop loss. Graphs reflect market behavior, especially some repetitive types.

For traders to form a valuable technical trading system, mastering graphic analysis is a prerequisite. In technical analysis, graphic analysis is the most important and common analysis method, including the following three most basic price graphics.

①. K-line chart

This kind of chart originated in Japan and was used by merchants in the Japanese rice market to record the market conditions and price fluctuations of the rice market. The delicate and unique marking method was introduced to the futures market and stock market. Because the shape of the chart drawn by this method is quite like a candle, it is also called a candle chart. In the K-line chart, the vertical axis represents price and the horizontal axis represents time. According to different time units, K-line charts can be divided into time-sharing charts, daily charts, weekly charts, monthly charts, etc. K-line chart drawing is relatively simple. Take the daily chart as an example. The two tips are the upper shadow line at the top and the lower shadow line at the bottom, which represent the highest price and lowest price of the day respectively. The middle is a rectangle similar to a candle. Indicates the opening and closing prices of the day. In Figure 1 below, the market situation of low opening and high closing is recorded, that is, the closing price is greater than the opening price, which is called a Yang line; in the figure, the real part is represented in white. In Figure 2 below, the market situation of high opening and low closing is recorded, that is, the opening price is greater than the closing price, which is called a negative line; in the black and white picture, the real part is represented in black. Since the price fluctuations are different every day, the shape of the negative line or the positive line that appears every day is also different. In order to enhance the visual effect, red is usually used to represent the positive line and blue to represent the negative line. Observing the K-line chart, it can be clearly seen that the market conditions on that day are "open low and close high" or "open high and close low", which is vivid, intuitive and practical.

Figure 2: Yin line

When analyzing the K-line chart form, in addition to paying attention to its basic form, you should also pay attention to the following points:

First, Pay attention to the length relationship between the upper shadow line and the lower shadow line. When the upper shadow line is extremely long and the lower shadow line is extremely short, it indicates that the seller is strong in the market and suppresses the buyer; when the lower shadow line is extremely long and the upper shadow line is extremely short, it indicates that the seller in the market is stubbornly resisted by the buyer.

Second, we should pay attention to the proportional relationship between the physical part and the relative length of the upper and lower shadow lines, so as to analyze the power of buyers and sellers.

Third, pay attention to the price area of ??the K-line chart. For the same K-line form, when it appears in different places, their meanings and interpretations are different, or even completely opposite. For example, the K-line entity has long shadow lines both up and down. If it appears at the end of a rising market, it generally means the formation of a sky-high price; if it appears at the end of a falling market, it generally means the emergence of a low price.

Another example is the positive hammer and the negative hammer on the upper and lower shadow lines. If they appear at a high price, it generally indicates that the market outlook will turn downward. If they appear at a low price, it generally indicates that the market outlook will be bullish. Therefore, when conducting K-line chart analysis, it is necessary to observe the length proportional relationship between the various parts of the Yin line or Yang line and the combination of Yin and Yang lines, so as to judge the increase and decrease in the strength of buyers and sellers, and to judge the price trend.

②. Bar chart

The bar chart is the simplest type of price chart. According to different times, it can be divided into time-sharing chart, daily chart, weekly chart, monthly chart, etc. Taking the daily bar chart as an example (see Figure 3), each trading day is represented by a vertical line connecting the highest price and lowest price of the day. The opening price of the day is represented by a short horizontal line that intersects the vertical line and is located to the left of the vertical line. Represented; the closing price of the day is represented by a short horizontal line that intersects the vertical line and is located on the right side of the vertical line (usually, the opening price is omitted).