To form a valuable technical trading system, it is a prerequisite for traders to master graphic analysis. In technical analysis, graphic analysis is the most important and commonly used analysis method, including the following three basic price graphs.
(1), K-line diagram
K-line chart, which originated in Japan, was used by Japanese rice market businessmen to record the rice market and price fluctuation at that time, and was later introduced into futures market and stock market because of its ingenious and unique drawing method. Because the chart drawn by this method looks like a candle, it is also called a candle chart. In the K-line chart, the vertical axis represents the price and the horizontal axis represents the time. According to different time units, K-line charts can be divided into time-sharing charts, daily charts, weekly charts and monthly charts. K-line drawing is relatively simple. Take the daily chart as an example. Two tips, the upper shadow line and the lower shadow line, represent the highest price and the lowest price of the day respectively. The candle-like rectangle in the middle represents the opening price and closing price of the day. The following figure 1 records the market with low opening and high going, that is, the closing price is greater than the opening price, which is called the positive line; In the figure, the solid part is shown in white. Figure 2 below records the market with high opening and low going, that is, the opening price is greater than the closing price, which is called the negative line; In a black-and-white diagram, the solid part is represented by black. Because the price fluctuates differently 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 is used to represent the negative line. Observing the K-line chart, we can clearly see whether the market of the day is "low opening and high walking" or "high opening and low walking", which is vivid, intuitive and practical.
Figure 2: Yinxian
When analyzing the form of K-line diagram, we should pay attention to the following points besides its basic form:
First, we should 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 shows that the seller is strong in the market and suppresses the buyer; When the shadow line is extremely long and extremely short, it shows that the seller is stubbornly resisted by the buyer in the market.
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 strength of buyers and sellers.
Third, pay attention to the price range where the K-line chart is located. For the same K-line form, when it appears in different places, their meanings and explanations are different, even completely opposite. For example, K-line entities have long upper and lower shadow lines. If it appears at the end of the rising market, it generally means the formation of sky-high prices; If it appears at the end of the downward trend, it generally means the emergence of the reserve price.
Another example is the male hammer and the female hammer with upper and lower shadow lines. If they appear at high prices, it generally indicates that the market outlook will turn down. If they appear at a low price, it generally indicates that the market outlook is bullish. Therefore, to analyze the K-line chart, it is necessary to observe the ratio of the length of each part of the Yin-Yang line and the combination of the Yin-Yang line, so as to judge the strength of buyers and sellers and the price trend.
② Bar chart
Bar chart is the simplest price chart. According to different time, it can be divided into time-sharing chart, daily chart, weekly chart and monthly chart. Take the daily chart as an example (see Figure 3). Each trading day is represented by a vertical line connecting the highest and lowest prices of the day, and the opening price of the day is represented by a short horizontal line intersecting the vertical line and located on the left side of the vertical line. The closing price of the day is represented by a short horizontal line, which intersects with the vertical line and is located on the right side of the vertical line (usually omitting the opening price).