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Bearish K- Line Combinations, Jan.18th
03月16日 09:45
Q: Hi,let's take a look at how to identify Bearish K-line pattern.
A: Here you go.
1. Upward acceleration line
- The upward acceleration line refers to the K- line combination pattern in which the currency price or index rises more and more during the rising process .
- As shown below:
The technical characteristics of the upward acceleration line
1) Appears in an uptrend
2) The currency price climbed slowly at first, and then increased faster and faster, closing out the middle Bullish candlestick and the big Bullish candlestick continuously.
The technical meaning of the upward acceleration line
The upward acceleration line is a topping signal.
The upward acceleration line and the downward acceleration line have the same shape, but the direction and technical meaning are opposite. In addition, the peak signal of the upward acceleration line is stronger and more reliable than the bottom signal of the downward acceleration line.
The upward acceleration line is like a long run. When you approach the end, you will start a sprint, and you will no longer be stingy with physical strength. But after the sprint, the person is exhausted and the game is over, so the upward acceleration line is a peak signal.
Traders can lighten up or liquidate positions according to the situation, or they can continue to hold the currency and wait for other technical signals of peaking and bearishness.
Example of BTC chart
- In the 2. 21 BTC market, from 1.27 to 2.21 , BTC rose from $ 30,000 to $ 58,000 , a cumulative increase of 89% . Especially in the later period, it increased by 19.5% in 10 days , peaked in the short term, and then ushered in a correction of about 15 days, with a maximum decline of 26% .
Special note
1) The reversal signal of the upward acceleration line is more reliable than the downward acceleration line.
2) When traders see the upward acceleration line, they can gradually reduce their positions, and leave the market when the currency price does not rise due to heavy volume, closes out of the top K line, or falls below the 5- day moving average.
3) The reversal of medium-term and long-term trends is generally not achieved overnight, and the rewards of patient waiting often exceed the expected opportunities.
2.The evening star
- The evening star is a combination of three candlesticks ,the first is a positive candlestick, the third is a negative one that penetrates into the real body of the first positive one, and the second is a small negative or small positive candlestick above the positive and negative lines.
- When the second K-line is the Doji, it is also called the Evening Doji, which is a special form of the Evening Star. There can also be two small candlesticks between Bullish and Bearish candlestick of the Evening Star.
- As shown below.
Technical characteristics of Evening Star
1) Appears in an uptrend.
2) It consists of three K lines, the first is a positive line, the second is a high-opening small negative line, a small positive line or a cross line, and the third is a negative line.
3) The third Yinxian entity penetrates into the first Yangxian entity.
The technical meaning of Evening Star
Evening star is a top reversal signal of bearish
The Evening Star and the Hope Star are identical in shape, but in opposite directions and technical meanings.
The peak signal of the Evening Star is stronger than the bottom signal of the Hope Star, and traders should lighten up or liquidate their positions in time after seeing it.
Like the Hope Star, the three K lines of the Evening Star also perfectly reflect the short-term trend reversal process defined by the Dow Theory: the first positive candlestick is higher than the previous high, and the second K line is stagnant in price. After finishing, the third Bearish candlestick is lower than the previous low.
Example of BTC chart
- In the 9-7 BTC market, after a 50- day cumulative increase of 67.4% , the currency price rose to $ 52,000 . Then, at the end of the accelerated rise in the latter part, it emerged from the shape of the evening star, and the price of the currency fell sharply, from the highest point to $ 43,000 , with a maximum decline of 19% .
Special reminder
1) The more the Bearish candlestick penetrates into the Bullish candlestick, the stronger the effect of its turnaround signal.
2) The smaller the volume corresponding to the first K- line and the larger the volume corresponding to the third K- line, the more reliable the signal is.
3) When the second K line is a negative one, it is stronger than the positive one.
3. Dark cloud cover
- The top of the dark cloud cover is the opening of a medium Bullish candlestick or a big Bullish candlestick in the rising process, and then a medium Bearish candlestick or a large Bearish candlestick that opens at higher price.
- As shown below:
The technical characteristics of the dark cloud cover
1) Appears in an uptrend.
2) It consists of two K lines , one yang and one yin .
3) There is a big positive line or a medium positive line first, followed by a big negative line or a medium negative line that gaps higher.
4) The Yinxian entity penetrates below one-half of the Yangxian entity but does not exceed the opening price of the Yangxian.
The technical meaning of dark cloud cover
- The top of the dark cloud cover is a top signal, and the market outlook is bearish.
- The top of the dark cloud cover and the beginning of the dawn are relative K- line patterns. The two patterns are the same, with opposite colors, directions and technical meanings.
- The top of the dark cloud cover is an early warning signal of peaking, which means that a storm is coming, which means that a round of decline is brewing, and its signal effect is relatively strong. After seeing the dark cloud cover, traders can gradually reduce their positions, or continue to observe the positions, pay close attention to the trends, and prepare to withdraw at any time.
Example of BTC chart
- In the 8-1BTC market, after 11 days of 42% increase, the currency price rose from $ 30,000 to $ 47,000 . Then, in the late stage of the gradual rise, the dark cloud cover form was closed, and the currency price began to pull back a maximum of 11% .
Special reminder
The more the negative body penetrates into the positive body, the more reliable the reversal signal is.
4. Flat roof
- A flat top is a combination of two or more K- lines with the same highest price in an uptrend.
- As shown below:
The technical characteristics of the flat roof
1）Appears in an uptrend.
2）It consists of two or more K lines.
3）The highest price is at the same level.
The technical meaning of flat roof
- A flat top is a top signal.
- A flat top is a K-line pattern with a flat bottom , which is an early warning reversal pattern. Every time the currency price or index hits a certain high point, it falls back, indicating that the advantage of the bulls is disappearing, and the bears have gradually grown to the point where they can compete with the bulls.
- This is a warning sign to remind traders to take precautions against a possible decline.
Example of BTC chart
In the 5-10 BTC market, the price of the currency traded sideways at a high of $58,000, and the continuous upper shadow hit $ 60,000 . Then, the currency price dived and started a 2 -month decline, with a maximum drop of 49% .
Special reminder
1) The flat top reversal signal is not strong, but it often appears at the same time as other top and reversal signals such as head-piercing, hanging neckline, shooting star, etc.
2) Several K- lines with the highest price at the same point can be connected together, or there can be intervals in the middle, but the interval of K- lines should not be too many, and if there are too many K- lines, it will no longer be a flat-top shape.
Disclaimer:
- This article is for informational purposes only and such information provided by Gate.io does not constitute any investment advice and is not responsible for any of your investments.
- Contents such as technical analysis, market judgment, trading skills, and traders' sharing may involve potential risks, investment variables and uncertainties.
- This article does not provide or imply any opportunities for guaranteed profit returns.
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