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Understanding K-Line Technical Analysis at a Glance
The Mysterious N-Shape Theory
The N-Shape Theory is a classic trend pattern in K-Line technology, rooted in wave dynamics and the intentions of major players. It simplifies price fluctuations into an 'N' shaped structure, helping investors identify trend continuations or reversals.
1. Basic Definitions and Principles
The N-Shape is not a single K-Line, but a continuous fluctuation composed of multiple K-Lines (usually 3-10), resembling the uppercase letter 'N'.
Principle: Market prices move in waves, with the first segment being the driving wave (trend direction), the middle being the adjustment wave (pullback consolidation), and the second segment being the continuation driving wave. This reflects the intentions of major players in accumulating, consolidating, and driving up prices.
2. Pattern Classification
1. Bullish N-Shape
Structure: Low point A → High point B (first rise, volume increases) → Low point C (pullback with reduced volume, C higher than A) → High point D (second rise, D higher than B).
Meaning: Strong bullish momentum, trend continues upward after adjustment. Commonly found in ascending channels as a buy signal.
2. Bearish N-Shape
Structure: High point A → Low point B (first decline) → High point C (rebound, C lower than A) → Low point D (second decline, D lower than B).
Meaning: Strong bearish momentum, trend continues downward after rebound. Serves as a sell/short signal.
3. Formation Conditions
Number of K-Lines: At least 3-5, applicable to hourly, daily, weekly charts, and various other timeframes.
Strength Requirements: The amplitude/speed of the second driving wave should be stronger than the first wave; the pullback amplitude should not exceed 50%-61.8% of the previous wave (Fibonacci ratio).
Position Requirements: Should appear within the trend channel, avoiding isolated patterns.
Auxiliary Confirmation: Combine with moving averages (above MA), MACD golden cross, RSI not overbought, and other indicators.
A graphic overview of the impact of the Federal Reserve's interest rate cuts on China and the United States
The Federal Reserve made its third interest rate cut of the year on December 10, 2025, with each cut being 25 basis points.
This is also the sixth interest rate cut since September 2024.
So what are the impacts of the Federal Reserve's interest rate cuts on various aspects between China and the United States?
🇺🇸 United States
➤Loan Interest Rates
Interest rate cuts lower borrowing costs for businesses and individuals, stimulate loan demand, and promote investment and consumption.
➤Savings Rate
The decline in deposit interest rates reduces the income of depositors, which may drive funds into the stock market and other high-yield assets.
➤Real Estate Market
Mortgage interest rates have decreased (for example, the 30-year fixed rate has dropped to 6.15%), leading to a rebound in home buying demand and a potential recovery in the real estate market.
The Cycle of Life and Death of Trends and Patterns
The cryptocurrency market is always cycling between 'Reversals' and 'Continuations'
To live long and earn more, the core is summarized in eight words: Trends set direction, patterns give signals
1. The Three Major Trends of the Market (Setting Life and Death Direction)
➥ Uptrend (Bull Market)
➠ Characteristics: Each wave's high is higher than the previous wave's high, and the lows are also higher than the previous wave's lows
➠ Core Signal: As long as the trend line is not broken, the bulls are in charge
➠ Operating Password: A pullback near the trend line or previous low support is a golden buying point; hold your position when the price rises, and don't be easily shaken out
➥ Downtrend (Bear Market)
➠ Characteristics: Each wave's high is lower than the previous wave's high, and the lows are also lower than the previous wave's lows
➠ Core Signal: A rebound to the downtrend line is the best shorting point
➠ Operating Password: Don't blindly catch falling knives when the price stops dropping, wait for the trend to truly reverse before taking action
➥ Sideways Trend (Bull-Bear Tug of War)
➠ Characteristics: Prices oscillate between clear highs and lows, including boxes, triangle convergence, and rectangle consolidation, all belong to this category
➠ Core Signal: Sell high and buy low within the range, or wait for a breakout direction before going all in
➠ Operating Password: Don't stand guard in the middle of the box; you can only profit at the edges
2. Patterns:
Accurate 'Sniper Signals' trends tell you 'which way to run,' while patterns tell you 'when to fire.'
➥ Common Fatal Patterns Overview (Remember them for a lifetime):
➠ Double Bottom/Triple Bottom, Head and Shoulders Bottom → Reversal signal for an uptrend
➠ Double Top/Triple Top, Head and Shoulders Top → Reversal signal for a downtrend
➠ Ascending/Descending Triangles, Pennants, Wedges → Continuation patterns, likely to continue along the trend
➠ Rounded Bottom/Rounded Top → Slow-paced reversals, typical traces of institutions quietly building positions or distributing
3. The Strongest Trading System:
➠ The perfect combination of trends and patterns: the actual operation framework of top traders consists of three steps:
➠ First, look at the larger cycle (Daily/Weekly) to determine the trend: Is it a bull market or a bear market?
➠ Go back to the smaller cycle (4H/1H) to find patterns: Where is the precise bullet point?
➠ Wait for confirmation signals (breakout + volume increase, trend line retest not broken) before taking action.
A framework that allows you to reject against the trend
Find the right direction before getting in
➥ What is the Multi-Level Trading Observation Technique?
It is one of the core trading frameworks for professional traders, which thoroughly solves the pain points of 'seeing the right direction but not making money' and 'frequently being stopped out by false breakouts' through 'top-down' analysis of different time frame candlesticks. It is revered as the 'holy grail of trading' by countless short-term trading experts.
➥ Three Key Levels
1. Weekly + Daily: Macro direction, determining life and death, only take trend-following positions
2. 4-hour + 1-hour: Market direction, finding opportunities, locking in the current main battlefield
a. First look at the weekly and daily: Only when the big direction is clearly bullish is it allowed to look for long positions; if the big direction is bearish, only take short positions
b. Then look at the 4-hour and 1-hour: Under the premise of trend-following, look for trading opportunities that retrace to support or break through resistance levels
c. Finally, look at the 15-minute and 5-minute: Only when a reversal pattern or a golden cross appears in the smaller time frames should you really take action to enter
2. No trading if key levels are broken
a. Important support and resistance levels in the weekly and daily, once effectively broken, the trend may reverse, exit immediately
b. Previous highs and lows in the 4-hour and 1-hour are the best reference points for short-term entries and exits
3. Buy on trend-following retracements, sell on trend-following breakouts
a. When the big trend is upward, only look for long positions near support when retracing to the 4-hour and 1-hour, never chase highs
b. When the big trend is downward, only look for short positions near resistance when rebounding, never catch the bottom
➥ Four Keys to Enhance Effectiveness
a. Works best in trending markets, patiently wait for breakouts during sideways fluctuations
b. Using in conjunction with volume and MACD can improve win rate
c. The direction of the weekly and daily is the most reliable, never go against the weekly
d. Avoid mindless trading by only looking at the 5-minute and 15-minute charts, this is the fastest way to lose money
The King of Short-term Indicators Upgrade: K-Line 6 Crosses Family Bucket
What are these "crosses" exactly?
One article to master the strongest short-term killing technique
1. Golden Cross (Ordinary Golden Cross) The K-line crosses the D-line from below, the most common bullish signal. If it appears below 20, you can get on board; if it appears above 80, it's basically false, so don't get on board.
2. Death Cross (Ordinary Death Cross) The K-line crosses the D-line from above, the most common signal to escape the top. If it crosses above 80, reduce your position directly; if it crosses below 20, it's basically ineffective, don't be afraid.
3. Two Lines Crossing (KD Classic Cross) Only K and D cross, J line does not participate. The signal comes fast but there are many false signals, you must wait for the J line to follow the direction for it to count.
4. Golden Golden Cross (The Strongest Short-term Buying Point) The three lines stick together below 20 and suddenly turn upward at the same time to cross. A historical-level bottom signal, when it appears, you can bravely take a large position.
5. Deathly Death Cross (The Strongest Short-term Escape Top Signal) The three lines stick together above 80 and suddenly turn downward at the same time to cross. A historical-level top signal, when it appears, you should clear your position in time.
6. Three Lines Crossing (Ultimate Confirmation) K, D, and J lines cross almost simultaneously (regardless of golden or death cross). The signal is the least, but the hit rate is the highest; three-line golden cross below 20 = main rising wave, three-line death cross above 80 = main falling wave.
Remember this content, next time there is a golden golden cross, remember to call Qianbao to get on board together~
The KDJ indicator, also known as the stochastic indicator, is one of the most widely used indicators. It is a relatively novel and practical technical analysis indicator, mainly used for medium to short-term trend analysis, and has obvious advantages at market turning points.
➥Three Lines
Fast Line (K line): reacts quickly, moving first when the price fluctuates slightly
Slow Line (D line): the slowest in fluctuation, filters noise, and provides more stable signals
Direction Line (J line): has the largest fluctuation and can provide early warnings for trend reversals
➥Core Usage:
1. Overbought and Oversold Areas
a. Above 80: Overbought area, short-term rises have been excessive, consider reducing positions
b. 20~80: Neutral area, mainly wait and see, let the bullets fly for a while longer
c. Below 20: Oversold area, short-term declines have been excessive, consider buying points
2. Divergence at Tops and Bottoms
a. Top Divergence: Price makes a new high, but KDJ does not reach a new high, indicating a top divergence → consider selling
b. Bottom Divergence: Price makes a new low, but KDJ does not reach a new low, indicating a bottom divergence → consider buying
3. Golden Cross Buy and Death Cross Sell
a. Golden Cross Buy: A golden cross means the short-term trend is strengthening → consider buying A position below 20 is more reliable, and combining with increasing volume makes it more accurate
b. Death Cross Sell: A death cross means the short-term trend is weakening → consider selling A position above 80 is more dangerous; be cautious when breaking below the 50 midline
➥Four Keys to Enhance Effectiveness
a. Works best in volatile markets
b. Using in conjunction with MACD increases win rates
A chart to help you understand the difference between left-side trading and right-side trading
Left-side trading: Taking action before the trend has reversed (buying low, selling high, going against the trend)
Right-side trading: Waiting until the trend has reversed and confirmed before taking action (going with the trend)
The main differences between the two:
❚ Win rates and odds are completely opposite
Left-side trading: Low win rate (30%-40%), but once a major bottom/top is caught, the odds are extremely high (5x-10x+).
Right-side trading: High win rate (55%-70%), but the odds are moderate (mostly 1-3x).
❚ Mentality and capital requirements are drastically different
Left-side trading: Requires extremely strong psychological quality + sufficient cash flow, capable of enduring floating losses of 50% or even 80% while continuing to increase positions.
Right-side trading: Friendly mentality, small drawdowns, ordinary people can still sleep well.
❚ Signal triggering points are different
Left-side trading: Relies on leading indicators (panic emotions, extreme volume, historical valuation bottoms, policy bottoms, etc.) to layout in advance.
Right-side: Relies on confirmation signals (breakthroughs of moving averages, trend lines, strong bullish candles, new highs/lows, increased trading volume, etc.) to enter.
❚ Suitable audiences are completely different
Left-side trading: Suitable for large capital amounts, long holding periods, professional investors, and those with an innate contrarian mindset (such as Duan Yongping, Buffett's low-position building style).
Right-side trading: Suitable for the vast majority of retail investors, trend traders, and quantitative players (such as Livermore, Turtle Trading Rules, Donchian Channel Breakout System).
The main force fears you understanding these If you understand this, you will be able to read the rhythm of the main force If you don't understand this, you will just be the market's eternal chives 1. Large bullish line + long lower shadow (appears at a low level) Super strong signal! The bears smashed the price to the floor, and the bulls violently pulled it back and closed with a large bullish candle, indicating that big funds are crazily buying at low levels. The next day, there is a high probability of accelerated growth. 2. Large bullish line + long upper shadow (appears at a high level) High-level turnover signal. The dealer or large players are offloading at high levels to attract buying momentum. The bulls seem strong, but it is actually a trap for the buyers, and it is likely to drop afterward. 3. Small bullish line
A true master: starts off like a turtle, strikes like a madman, and earns like a devil. 1. Cycle of rising and falling chart a. Flag pattern adjustment After a sharp rise and fall, the rocket inserts a small flag to catch its breath, with the flag slightly tilted in the opposite direction, consolidating with low volume for 1-3 weeks, then directly flying in the direction of the flagpole after a breakout with volume. A favorite of short-term traders, with a very high win rate. b. Triangle pattern adjustment The battle between bulls and bears gets narrower and narrower, and in the end, one side must be kicked out: Ascending triangle → Flat top raises its head → Kicked upwards (bullish); Descending triangle → Flat bottom bows its head → Kicked downwards (bearish); Symmetrical triangle → Whoever moves first wins, and a breakout with volume counts.
Understand Left-Side Trading vs Right-Side Trading at a Glance
Find the trading style that truly belongs to you
➥Left-Side Trading (Counter-Trend Trading)
1. Core Idea: Buy low and sell high, entering the market before a reversal occurs.
2. Timing: Buy when prices are falling, sell when prices are rising (when others are fearful, I am greedy; when others are greedy, I am fearful).
3. Three Main Features: a. Counter-trend operation, relying on predicting turning points b. High risk (the trend may continue, easily getting trapped or hitting stop-loss) c. High potential returns (buying near the lowest point, selling near the highest point)
➥Right-Side Trading (Trend Trading)
1. Core Idea: Get in only after the trend is fully confirmed, no guessing bottoms or tops.
2. Timing: Chase prices after breakout confirmation, sell after breakdown confirmation (don't run faster than the market).
3. Three Main Features: a. Trend-following operation, moving with the trend b. Low risk (the market has already voted with action) c. Moderate potential returns (missing out on the cheapest/most expensive parts in the early stages)
Friendly Reminder: Most successful traders tend to favor right-side trading in the long term, but left-side trading can create legends in extreme market conditions (major bottoms and tops). As for which to choose, it depends on your personality, capital, and risk tolerance.
Should we buy the dip in gold or continue to escape?
Gann trading is a trading system established by William Gann, which predicts market reversals using the core elements of time, price, and space, combined with geometric angles, percentage divisions, cyclical patterns, and trading volume to achieve high-probability trend-following trades.
Core of the Eight Trading Rules:
➥ Capital Division Divide capital into 3 equal parts, using only 1/3 for each position, keeping the remaining 2/3 to mitigate risk.
➥ Stop Loss 2-3% Single trade loss should not exceed 2-3% of total capital, strictly enforced.
➥ No Overtrading No more than 5-7 high-certainty opportunities per year.
➥ Trend-following Pyramid Increase positions in profit (1:2:3 ratio), never add to losing positions.
➥ Trendline Decision Go long when the price breaks above the 1×1 upward angle line, go short when it falls below.
➥ 50% Retracement Defines Reversal Key high and low points at the 50% retracement level serve as buy and sell signals.
➥ Time Confirmation Signal Price signals must resonate with annual/square/seasonal cycles.
➥ Volume Confirmation Breakouts with increased volume confirm, while reduced volume indicates distribution.
Is it time to buy the gold dip or continue to escape?
Gann trading was established by William Gann, a trading system that uses three core elements: time, price, and space to predict market turning points, combining geometric angles, percentage retracements, cyclical patterns, and trading volume to achieve high-probability trend-following trades.
Core of the Eight Major Trading Laws:
➥ Capital Division Capital is divided into 3 equal parts, using only 1/3 to establish a position each time, leaving 2/3 to guard against risk.
➥ Stop Loss 2-3% Single losses should not exceed 2-3% of total capital, strictly enforced.
➥ No Overtrading No more than 5-7 high-certainty opportunities in a year.
➥ Trend-following Pyramid Increase positions on profits (1:2:3 ratio), never add to losing positions.
➥ Trendline Decisiveness Go long when the price stands above the 1×1 upward angle line, go short when it breaks below.
➥ 50% Retracement Signals The 50% retracement level of key highs and lows serves as a buy/sell signal.
➥ Time Confirmation Signals Price signals must have annual/square/seasonal cycle resonance.
➥ Volume Confirmation Breakouts confirmed by volume, reduced volume at the top for distribution.
Whether it's capturing peaks in a bull market or bottom fishing in a bear market, the trend channel is your "Price GPS"
Follow this image to draw a professional trend channel in 3 seconds
➥ Finding Sell Points in an Uptrend: In a rising market, first connect two consecutive low points A and B to draw the trend support line, then draw a parallel upper track through the highest point C between these two points, forming an upward channel; when the price touches or breaks through the upper track for the third time and shows increased volume stagnation, a candlestick reversal pattern (such as a shooting star) or a false breakout followed by a drop, it indicates a high-probability sell point, signaling that top pressure is effective, and it is advisable to reduce positions or exit the market.
➥ Finding Buy Points in a Downtrend: In a falling market, first connect two consecutive high points A and B to draw the trend resistance line, then draw a parallel lower track through the lowest point C between these two points, forming a downward channel; when the price approaches or breaks the lower track for the third time and quickly recovers, accompanied by reduced volume stabilization, bullish candlesticks (such as hammer candlestick) or indicator divergence, it indicates a high-probability buy point, signaling that bottom support is effective, and it is advisable to establish or increase positions.
Understand K-line Combination Rise and Fall Patterns at a Glance
➥ Entry Signal (Bullish Buy)
1. Dragon Head First Yin: The leading stock shows a medium decline after consecutive rises but with reduced volume, indicating a washout by the main force rather than a peak. Buy on the next day’s low open and high run.
2. Immortal Pointing Road: Long upper shadow with a small body probes high and then retreats, the main force tests the market, follow up the next day when there is a breakout with increased volume above the upper shadow high.
3. N-Shape: Rise - pullback - rise forms an “N”, if the pullback does not break the previous low, it is a continuation, buy on the second low point.
4. Three Consecutive Yin Shock: Three consecutive declining real bodies with extremely reduced volume, the main force intimidates the market, enter at the end of the third candle.
5. Bottom Tweezer Line: Two K-lines overlap at the low point, the bears test twice unsuccessfully, buy on the close of the second candle.
➥ Exit Signal (Bearish Sell)
1. Top Spinning Top: Long upper and lower shadows with a small body, imbalance between bulls and bears, peak at a high position, reduce positions on the same day.
2. Top Pregnant: A large bearish candle fully engulfs the previous bullish candle, bears violently counterattack, clear positions at a high level.
3. Top Bearish Engulfing: A bearish candle engulfs the previous bullish candle’s body, bulls collapse, exit immediately.
4. End of Rise Line: A long upper shadow bearish candle with increased volume, indicates the end of the rise, accelerate to run on the next day’s low open.
5. Top Tweezer Line: Two K-lines overlap at the high point, bulls fail to push higher twice, sell at the peak.