In stock trading, the technical analysis genre believes that “history will repeat itself”. They often use various technical indicators, drawing lines, to study the K-line's charts and similar patterns, trying to find rules to determine the movement of short-term stock prices.

The secret of tomorrow's rise or fall seems to be hidden in the K-line chart.

If you can take you back to history in the moments before you place an order, you can visually see a very similar K-line movement in past history, can you judge the direction of tomorrow's stock price?

This solution engine is based on the Futubull APP, and its name makes the same line. It is not only possible to let history play out in front of you, and it is possible to predict a stock price trend spread over the next 20 days.

If you are only going to look at it at a glance, it is used to predict tomorrow's ups and downs, not only underestimate it, but even a little too big.

Because it can also tell you what is the probability of a rise and fall the next day after placing an order? What is the scope for ups and downs in the next 20 days? Help you manage your profit and loss risk expectations.

Let's learn how to use a similar K-wire correctly.

1. Similar to the K line, which is used to judge the rise and fall of the stock price? SEVERELY UNDERESTIMATED!

In the Futubull APP, click the button on the right side of the K line and swipe right to see the corresponding K line of the previous mark. You can click the Market→Opportunity→Similar Kline to find the hot list and the corresponding brand of your choice.

We use Sea as an example to open a K-line similar to Sea, which analyzes the K-line movement of Sea over the past 30 days and then finds and statistics the historical movements of the 100 stocks that are most similar to its 30-day K-line movement.

And shows historical charts of the top 5 stocks that are most similar to Sea's current movement in similar history.

Then, when you click on Forecast immediately, you will be subjected to statistical analysis to obtain a probability distribution chart of Sea's stock price movements over the next 20 days based on a specific algorithm, as well as the number of ups and downs for the similar 100 days of stocks, as well as the maximum increase and maximum loss.

So if you just look at the probability distribution chart of predicted stock price movements at a glance, which is used to predict future stock price movements, then there is a bit of a misunderstanding and a serious underestimation of it, because it can also determine the probability fluctuation space for future profits, losses, determine the value that is not worth ordering, buying and selling directions, and controlling Risk these more important things.

To learn how to use a similar k line correctly, you must first read the information it gives you correctly.

Second, what information should I look at? How to correctly understand a similar K-line to determine whether it is worth placing orders, buying and selling directions and risk points?

As an example in our figure above, there are approximately 4 important pieces of information that are similar to the K line for reference.

① Probability distribution of the movement of the next 20 days: At the position of ①, click Forecast now to get the probability distribution of the stock price trend for the next 20 days of the indicator. The solid part is based on the most similar analysis of 100 k lines in history, with the maximum probability of one movement in the next 20 days. And depending on the depth of the color, the deeper the color represents the greater the likelihood of that location. (For reference only and does not constitute investment advice)

We recommend that in addition to a reference to the approximate movement of the forecast “solid line”, you can refer to a line with the lightest color at the top and a line with the lightest color at the bottom, see where the highest and lowest points are likely to occur in the future movement, and determine at what point a stock price is most likely to reverse. Whether there is an opportunity for overwriting or stopping a profit and where the highest profit space is most likely to occur determines whether it is worth placing an order at the moment, and where the maximum loss space is, and where the maximum profit space is most likely to occur, and whether the loss can be sustained if the order is placed.

② Next day ups and downs: This represents the probability of a rise and a fall on the next day based on the 100 most similar K-line movements. From the information in the chart, you can get a 55% probability increase the next day and a 45% probability decrease the next day.

③ Maximum Gain, Maximum Decline: This represents the maximum possible gain of 16.19% on the next day, according to the most similar movement of the 100 K lines, the maximum possible increase of the next day is 16.19%, and the maximum possible loss is 20.97%, that is, the maximum risk that can be taken the next day is a loss of 20.97%, and the maximum possible profit is in 16.19%。

Investors can decide whether it is worth placing orders, profit and loss space, and buying and selling directions at this time by combining the probability of an increase and a fall and a maximum, maximum loss.

For example, if an indicator has a probability of a rise on the next day of 51%, the probability of a fall of 49%, the maximum increase is only 2%, and the maximum decrease is 30%, then although the probability of an increase is slightly greater than the probability of a fall, the space in which losses can occur is much higher than the space where profits can occur. Clearly buying at this time, investors obviously have to bear the fact that although the profit probability is slightly higher, the profit margin is smaller and the probability of a fall is lower, but the fact that the fall may incur a greater loss. So placing orders at this time may have a larger margin for short selling compared to the buying direction.

④ Historical movements of the top 5 most similar brands: Here are the top 5 of the 100 most similar K-lines, for investors to judge comprehensively. It is important to observe the volatility of the K-line movement, the likelihood of a stock price reversal on the next few days, as well as the possible maximum profit space and minimum profit space Where exactly. Among them, the historical trend of the K-line similar to the industry label is more referential.

So is it possible to accurately predict the future movement of the stock price by looking only at the similar K-line alone?

The answer is no. Firstly, the principle similar to the K-line is also a method of technical analysis. The essence of technical analysis is to study the K-line graph, to find a certain rule, to predict the stock price, which requires a clear means of any separate technical analysis, which cannot predict the future course of the K-line with 100% accuracy.

If you expect to accurately derive future price movements from just one means of technical analysis, this idea itself is not scientifically unrealistic.

But if you can combine several technical analysis tools to make predictions, it is possible to increase the accuracy of the forecast and increase your chances of winning.

That is, simply looking at a prediction trend that is similar to the K-line will not be interpreted 100% in the future. But if you analyze it through other technical means and combine similar K-lines, you can give your judgment more accuracy.

3. Who is the similar K-wire suitable for?

In the above, we have emphasized that the Like-K line cannot be a stand-alone tool for determining future price movements, so the Like-K line is more suitable for traders with a certain technical analysis foundation.

One way is that technical analysts can use a similar K-line to validate analytical ideas by using other technical indicators and analytical means to predict an imminent reversal in stock price movements, increasing decision confidence. Another way is that when technical analysts have no idea about the current K-line, they can first look like a K-line, look for inspiration in the direction of the analysis according to the trend, and then validate the judgment using other technical analysis means.

So, isn't a similar K wire completely unsuitable for novice users?

It is not, although we do not always advise novice traders to judge the ups and downs using only similar k lines. But we suggest that novice traders can predict the potential volatility space for future stock prices based on the maximum and maximum falls represented by a similar K-line, thereby determining that the current value is not worth placing an order, the direction of the order, and how large the risk points may exist on the next day if an order is placed that they cannot bear Received.

Fourth, highlight the considerations and benefits similar to the K-line.

① Improve decision win rate: Proper use is to combine other technical analysis tools to improve decision winning rates, noting that similar K-lines cannot be used as the only means of technical analysis to determine stock price movements;

② Determine the profit and loss space for the next 20 days: Investors can observe the distribution of the probability of movement in the 20-day forecast chart, and determine the maximum profit space and maximum loss space that may occur in the future by referring to the peak wave position in the highest and lowest dashed lines.

③ Extreme values appear to determine whether orders are placed and buy and sell directions: When there are larger differences (biases) on the day of the rise, fall, and maximum rise and fall values, you can determine the winning rate, profit and loss space, consider whether it is worth placing orders at the moment, and buying and selling direction.

④ Similar industries have more reference value: Similar K-line historical trends in the top 5 have an advantage in terms of similarity, and the most similar industries have more reference value.

⑤ Important news may be lost: Please note that the similar K-line is only a short-term forecast, it is not possible to make an intraday trading forecast (minute level), the forecast is only as an auxiliary means of technical analysis. Once a significant profit or void occurs on the news side in the future, the forecast is highly likely to be invalid.