The red line, yellow line and blue line of the stock market are all moving averages, representing the average share price in different time periods. For example, the 5-day line and the 10 line and the 20-day line represent the average stock prices for 5 days, 10 days and 20 days respectively. Specific lines of different colors represent those time periods, which can be found in the K-line diagram.

I. Elements of K-line diagram

It is based on the opening price, the highest price, the lowest price and the closing price of each analysis period. Take the daily K-line as an example, first determine the opening price and closing price, and draw the part between them into a rectangular entity. If the closing price is higher than the opening price, the K line is called the positive line, which is represented by a hollow entity. On the contrary, it is called a negative line and is represented by a black entity or a white entity. Many softwares can use colored entities to represent negative and positive lines. In the domestic stock and futures markets, red is usually used to represent the positive line and green is used to represent the negative line. Connect the highest price and the lowest price with the entity with thin lines. The line between the highest price and the entity is called the upper shadow line, and the line between the lowest price and the entity is called the lower shadow line.

Similarly, if you draw a K-line chart with one minute's price data, it is called a one-minute K-line. Draw a K-line chart with one month's data, which is called a monthly K-line chart. The drawing cycle can be flexibly selected as required, and K-lines with a cycle of 2 minutes and 3 minutes can also be seen in some professional drawing software.

K-line is a special market language, and different forms have different meanings.

Second, the advantages and disadvantages of K-line chart

Advantages:

Can fully and thoroughly observe the real changes in the market. From the K-line chart, we can not only see the trend of the stock price (or market), but also understand the daily market fluctuation.

Disadvantages:

The drawing method of (1) is very complicated and it is one of the most difficult charts to make.

(2) There are many changes in the line of Yin and Yang.

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.