Candlestick map originated in Tokugawa shogunate era in Japan, and was used by businessmen in rice market in Japan at that time to record the market and price fluctuation of rice market. Later, it was introduced into the stock market and futures market because of its ingenious and unique drawing method. Investors can judge the strength of both long and short sides and the trend of the market outlook according to the yin and yang of the K-line entity and the length of the upper and lower shadow lines.

I. K-line composition

K-line chart consists of opening price, closing price, highest price and lowest price. When the opening price is lower than the closing price, it is called the closing price, and this K line is called the positive line, whereas the opening price is higher than the closing price, which is called the negative line.

Second, the basic classification of K-line

According to the fluctuation range of opening price and closing price, K-line can be divided into extreme yin, extreme yang, small yin and small yang, middle yin and middle yang, and big yin and big yang.

Their general fluctuation ranges are as follows:

The fluctuation range of extreme yin line and extreme yang line is about 0.5%;

The fluctuation range of xiaoyin line and xiaoyang line is generally 0.6-1.5%;

The fluctuation range of Yinzhong Line and Zhongyang Line is generally1.6-3.5%;

The fluctuation range of Yin Da Line and Dayang Line is above 3.6%.

K-line chart can be said to be the perfect combination of eastern philosophy and western statistics, which shows the mutual transformation of "potential" between long and short sides with the change of yin and yang. However, a single K-line can only represent the battle results of both sides in a day, which is not enough to reflect the continuous changes in the market. Only in this way can the K-line combination chart describe the transformation of "potential" between long and short sides in more detail-after either side breaks through the market and gains an advantage, it will form a rising or falling market.

When studying a single K-line, the number of Yin and Yang lines represents the overall long and short trend, while the size of the K-line body represents the internal power and trend of the market, and the length of the shadow line reflects the willingness to turn. The purpose of studying the K-line combination chart is to observe the strength and fluctuation of long and short forces, feel the transformation of both sides, follow the trend, find and participate in the bottom that is ready to go, firmly grasp the rising market of the general trend, and avoid the top risk of a spent force.