99% of retail investors cannot understand the candlestick pattern
Mastering the candlestick pattern is to master the pulse of market funds. However, most investors are confused when faced with complex candlestick charts, while top traders can make accurate trading decisions with simple patterns. The following are three candlestick patterns commonly used by top traders and their application methods,
I. Engulfing pattern: early warning signal of trend reversal
• Features: The larger candlestick body completely covers the previous small body, which is divided into bullish and bearish.
1. Bullish engulfing: Appears in a downtrend, indicating a possible reversal, suitable for buying on dips. 2. Bearish engulfing: Appears in an uptrend, suggesting that the top may be reached, suitable for profit-taking or reducing positions.
• Case analysis: After the bullish engulfing pattern appeared, the price of a certain stock rebounded 15% from the low point. Timely identification of this pattern is the key to buying low. II. Doji: Opportunities when the market hesitates• Features: The candlestick body is extremely small, and the upper and lower shadows are long, indicating that the long and short forces are temporarily balanced. • Operation strategy: 1. In a downtrend, it may be a precursor to a rebound. 2. In an upward trend, be alert to possible pullbacks. • Note: It is necessary to combine trading volume and subsequent K-line patterns to judge the trend, and it is not advisable to rely on them alone. 3. Three consecutive positive lines: a symbol of a strong upward signal • Features: three consecutive positive lines, and the daily closing price is higher than the previous day.
• Operation strategy: 1. Short-term trading: You can chase the rise, but you need to pay attention to the risk of pullback. 2. Trend trading: Combine trading volume to confirm the continuity of the trend and operate steadily. • Operation skills: Combine the MACD indicator to determine whether a golden cross is formed to improve the reliability of the signal. How to quickly learn these patterns? 1. Daily review: Study typical K-line cases and gain insight into changes in market sentiment. 2. Tool assistance: Use technical analysis tools such as moving averages and MACD to assist in judgment. 3. Simulation practice: Improve the accuracy of pattern recognition through simulated trading exercises. It is not difficult to understand the K-line pattern. The key is to flexibly adjust the trading strategy in combination with the market environment and trading volume. The difference between top traders and ordinary investors is that they are not only familiar with these patterns, but also can use them flexibly. Save this article now, open your trading software, and see if these patterns have appeared in your trading targets.
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