In this chapter, we mainly discuss the '12 Golden K'
Significance of the 12 Golden K
1. Origin of the 12 Golden K: The full name of the 12 Golden K is the Golden Candlestick, which refers to 12 basic candlesticks. Its purpose is to predict future price trends through candlesticks.
2. Significance of the 12 Golden K: Although the 12 Golden K has significant predictive power, it is not a universal key and cannot be used alone. It needs to be combined with other technical indicators, such as Bollinger Bands, MACD, etc., to jointly judge the market trend.
3. Periodicity: First, any level of chart can be used, including 1-minute and 30-second charts, but! But! The Golden K can only be used as an entry signal, not as a reason for entry.
Classification and application of the 12 Golden K
1. Single candlestick: For example, doji, hanging man, inverted hammer, gravestone, dragonfly, etc., these candlesticks provide signals through a single candlestick.
2. Combined candlesticks: For example, rising three methods, engulfing patterns, the road of the immortal, crown star, etc., these candlesticks provide more complex signals through a combination of multiple candlesticks.
3. Key focuses: Doji, hanging man, design star reversal candlestick, engulfing pattern, evening star, and morning star are key study objects.
Trend
Trend identification: Before trading, it is essential to clarify the current market trend, including whether it is bullish, bearish, or sideways.
Doji identification and operational suggestions
Identification: When the opening and closing prices are equal, the strength of bulls and bears is balanced, with both sides being 50-50. If bulls initially exceed bears and then reverse, or vice versa, it ultimately reaches equal opening and closing prices.
Note: If the opening and closing prices are not equal, but the size of the body is less than 10% of the total, it can be considered a variant of the doji.
Operational suggestions:
In a strong bullish trend, a doji is not a good short signal, but in a volatile market, it can serve as a short signal.
The appearance of a doji during an upward movement indicates insufficient momentum and should consider reducing positions; if a doji appears during a downward movement, one should observe whether the subsequent candlestick closes above the body to decide whether to continue holding or exit.
A large or giant doji has little significance; the intensity of the bullish and bearish competition can be determined by the length of the candlestick.
If the subsequent candlestick can close above the body, continue to hold and observe; otherwise, exit.
Practical review and Q&A
11.25-11.30$BTC example of trend
For Q&A, feel free to follow Hanying Bit and ask questions in the comments section.
