This article involves two knowledge pointsđđ»
(1) Identification of K-line convergence patterns (with illustrations)
(2) Multi-cycle application in practice
Friends who usually follow my Binance Square should know that the triangle convergence pattern, in particular, is the K-line pattern that I personally use the most.
This article has three paragraphs in total, not many words, but useful
1. Understand the K-line cycleđ»
1. Cycle formation
(1) K-line is a concept of price space, which is the price change trend, range, rise and fall status of the trading object within a specific period of time, as well as the energy strength of the trend.
(2) Any time period can be used as a K-line time period unit, which is also the basic premise of the existence of K-line
2. Cycle transmission and impact
(1) The large-cycle trend evolves from the small-cycle trend
(2) Small-cycle trends are factors affecting large-cycle trends
(3) After the large-cycle trend is formed, the overall trend of small-cycle fluctuations must obey the large trend
3. Three-cycle principle
(1) The core of the cycle theory: follow the big trend and go against the small trend
(2) Cycle framework classification: the entire cycle is divided into three cycles: large, medium and small
(3) Cycle application
-The big and small cycles rise (fall) at the same time, and the medium-term moving average reaches the support and pressure level, which is a single signal
-The big and small cycles are reversed, wait patiently
- Both the size of the stock rises (falls), and there is a mid-term top-bottom divergence signal. Hold but do not chase
4. Cycle selection for different markets
(1) The three-cycle principle is in a similar multiple relationship: for example, they are in a 4-fold relationship.
(2) Three-cycle selection (example)
-Big cycle: hourly line
-Medium cycle: 15-minute line
-Small cycle: 5-minute line
(3) In principle, the medium-term cycle you choose should be able to support your selling behavior. The more flexible the market is, the more flexible the cycle you choose.
2. The three graphic structures of K-lineđ»
1. Identification, principles, and examples of convergence diagrams
(1) The most common consolidation pattern in K-line. The consolidation pattern refers to the stock price that, after a period of rapid change, no longer moves forward but fluctuates in a narrow range within a certain area. When the time is right, it continues the previous trend movement. This is called the consolidation pattern.
(2) Convergence chart recognition: Depending on the different forms, the high and low points show different trends. For example, the convergence of a positive triangle means that the high point becomes lower and the low point becomes higher, and finally it forms a triangle without an obvious trend direction.
(3) Convergence chart principle - the support (resistance) becomes stronger and stronger, and the resistance (support) point is repeatedly tested. Once it is broken, the emotional potential energy generated can form inertia - the more times the support (resistance) point is tested, the stronger the potential energy contained in it
(4) Application of convergence diagram
-Short-term buying
-In principle, our system only makes descending triangles, ascending triangles and symmetrical triangles
- Wedge shape is not done normally
-Buy in large quantities in small cycles
2. Flag pattern recognition, principles, examples
(1) Overview of the Flag Chart
-Band rise is also called flag rise, the structure is not much different from the wave theory
-A wave is formed by a high point and a low point. When the price rises to a certain high point, it will inevitably fall back and consolidate. When the price falls back to a certain low point, it will inevitably rise again.
- Generally speaking, the rising market trends will be higher one after another, thus continuously pushing up the price.
(2) Flag chart recognition: highs become higher, lows become higher
(3) Flag chart principle
-The first retracement is formed, which means that the market trend has been initially established.
-When the first wave is formed, there must be a lower low before it - two highs and two lows become higher in sequence
(4) Use of flag chart - short-term buying
-Buy in large volumes and small cycles
-In principle, only enter the market at the second retracement (wave 4)
(5) Note: This can be considered as the wave law. If you do not understand waves, you can simply ignore this part.
3. Establishment of the Target Observation Poolđ»
1. Scope: within a fixed exchange or market value range
- For example #Binance A listed company with a market value of 50 million to 100 million
2. Cycle and graph screening
(1) For the medium-term period, you can select charts for more than 4 hours.
(2) Select the target that meets the characteristics of triangle convergence, flag or arc shape - the application of arc can jump to the previous content
(3) Using large cycles to exclude directions
