Period 1 K line
When it comes to the decomposition and combination of K-line, we should first mention the period of K-line. In the last article, I also mentioned the internal structure of K-line form. The purpose is to observe the specific trend more carefully, and K-line decomposition will be used here. In K-line combination, it aims to identify obvious and familiar K-lines from complex K-lines more clearly to assist decision-making.
Generally speaking, the trading system will include three levels of cycles, namely, direction cycle, operation cycle and trading cycle. Among them, the direction cycle is used to judge the general direction of the whole, thus determining the direction of buying and selling. The operation cycle is what we usually see, also called the position cycle, because this cycle is mainly used to predict the beginning and end of the trend. The buying and selling cycle is usually a smaller cycle to capture more detailed buying and selling points.
The decomposition and combination of K-line is to constantly switch the cycle of K-line. The switching here is not only the switching in the same proportion, but also the switching in different proportions (this allows us to freely combine K-line forms and relatively ignore the time factor).
Decomposition and combination method of 2 K line
The decomposition of K-line can only be realized by switching periods, because without switching periods, the internal structure of K-line in a certain period cannot be clearly seen. For example, you can't know the trend of the minute chart by looking at the daily chart, but you can know the trend of the daily line by looking at the minute chart, which is why the K-line combination can work.
There are generally two methods for K-line combination. One method, like K-line decomposition, directly sets the period with software, and then directly enlarges the period with shortcut keys or mouse. However, this method has a disadvantage, that is, it is inflexible, periodic scaling is fixed, and it will take time. Another method is the combination method as shown in the figure below:
No matter for the combination of 2K lines or multiple K lines, the basic method is the same: take the highest and lowest price of a set of K lines, add the opening price of the first K line and the closing price of the last K line, and draw a K line diagram, so that a new K line can be combined, and the combined K line will look more intuitive.
After mastering and using this method skillfully, you can save the inconvenience caused by switching cycles and combine the K lines you want more flexibly without worrying about the fixed ratio. When a mature trader sees a complex K-line pattern, he can quickly turn it into a familiar K-line pattern, which is through this combination method.
Three examples
K-line decomposition simply means shortening the cycle, and there is no better way at present. I won't give examples here. Here are only examples of K-line combinations:
At 1, there is a small continuous K-line with a strong K-line in front. If you don't combine, this shape doesn't seem to match any of the stars we mentioned before, but after combining, a hanging line is formed, and together with the gap in front, the gap in the back constitutes the twilight star shape.
Figure 2 shows a failed pregnancy line form. After the combination, it is just a relatively normal K-line, which has no strong reversal significance. After combination, Figure 3 forms a hanging line with strong reversal significance, and together with the Dayang line on the right, Figures 2 and 3 form a morning star shape with Dayang line.
Through the combination of K-lines, we can no longer be bound by the cycle, and we can directly classify the current trend into familiar patterns, so that the market will be more clear.
PS: I am Yi Jin (stock market pseudonym), graduated from Nanjing University of Science and Technology with a master's degree, engaged in securities companies, engaged in market research for many years, and paid attention to the accumulation of firm experience. I have the qualification of futures and securities analyst certified by the futures industry and securities industry association. Have a certain understanding and research on trading system, technical analysis and value investment. Please pay attention to me if you want to learn technology or need to get rid of the current loss dilemma. I am open-minded and eager to learn. If I have any mistakes or other questions, please point them out in time Thank you for your time. (There is my public platform in the lower right corner of the K-line chart of the article, or leave many comments in the comment area at the bottom of the article. Check the comments and welcome everyone to discuss! )