Trade Mini Course - Yin Yang Candle Patterns
Multi-space reversal K-line: counter line
When two contrasting k charts have the same closing price, a counter line is formed.
So, what does the appearance of the counter line mean?
This article will explain for everyoneCounter Line Form.
What is a Backline?
Backline, also known as a date line, is a reversal form made up of two K-lines.
This form consists of Yin Ying Ying and Two Lines, and Yinyang Two Lines have the same closing price.
Based on the position and the order in which the K line appears, the backline can be divided into a bullish reflection line (pre and post yang) and a bearish one (trailing yaw).
A bullish backlash indicates a potential bottom reversal, which is a bullish signal; on the contrary, a potential top reversal of a bearish backlash is a bearish signal.
How was the counterattack line formed?
The counterattack line can appear both at the stage of rising prices and at the stage of falling prices.
The trend that appears on the downside isBullish Counter Line. The first candlestick of this form is a long yin, when the short takes advantage. The second K-line jumps down and opens low, and then goes up all the way, eventually closing back to the previous day's level, forming a long sun line. This shows that the long took back the advantage the next day, and there was no obvious selling order.
ForBearish Counterattack LineThe situation is just the opposite. The bearish counterattack line appears in the upward trend. The first K-line is a long yang wire, and the second one is a long yin. The second bar price jumped up high, set a new high, and then all the way down, and finally close near the closing price of the first day. This shows that the short has taken the dominant position of the long.
Whether it's a bullish counterattack line or a bearish counterattack line, it features the opening price of the second candlestick off along its original trend, then shrinking the gap in the opposite direction, eventually closing near the previous day's closing price.
This is the case, indicating that bulls or short heads are losing their dominance, before the trend may be reversed.
But whether the trend reversal really occurs, it needs to be observed further with other technical indicators.
How to identify the counter line?
In combat, the identification of counter line form, can be divided into two cases of bullish counterattack line and bearish line.
In the identificationBullish Counter LineWhen, you need to pay attention to the following points:
Apparently downtrend: Before the bullish counter line appears, there needs to be a clear downtrend. This means that the price continues to lower over a period of time.
Two K lines, first yin and then Yang, close price: The first K-line is a long shade, the solid part is longer, and the shadow is optional. The second K-line is a long sunny wire, with a longer solid part (ideally, the length of the first one). The closing price of the second bar must be close to the closing price of the first bar.
The confirmation signal is closed on the third trading day: To confirm the reversal signal of the pattern, you can refer to the price movement of the third bar bar. For example, a signal of a bottom reversal, the third price should close up.
In the identificationBearish Counterattack LineWhen, you need to pay attention to the following points:
Apparently upward trend: Before the bullish counterattack line appears, there needs to be a clear uptrend. This means that the price continues to rise over a period of time.
Two K lines, after the sun, close price: The first K-line is the long Yang line, the solid part is longer, the shadow is optional. The second K-line is a long shade and the solid part is longer (ideally, similar to the length of the first). Similarly, the closing price of the second bar must be close to the closing price of the first bar.
The confirmation signal is closed on the next trading day: To confirm the reversal signal of the pattern, you can refer to the price trend of the third bar bar. For example, a signal of a top reversal, the third price should close down.
case analysis
Below, we take the bullish counterattack line pattern that appears on the daily K-line chart of Tajit (TGT) as an example.
On the chart, you can see that the stock price has experienced a clear wave of declines, indicating strong bearish sentiment.
At the bottom of the downtrend, a bullish counterattack line pattern appears. The first K-line is a long yin wire, and the second one is a long yang line. These two klines are of equal length and have a relatively close price. The appearance of this pattern indicates that the trend may reverse.
To confirm this reversal signal, you can refer to the price movement of the third bar bar. As you can see from the figure, the third bar closed up, may be the confirmation signal of the bottom reversal.
After that, the price trend reversed and the stock price ushered in an upward trend.
summed
Counter line is a special K-line form, in combat is not very common.
However, this pattern is not 100% effective and failure is also very common.
Traders, like other technical indicators, should consider combining counterattack line patterns with other forms of technical analysis to confirm the direction of the trend and capture potential opportunities.
