K-line (also known as candlestick chart) is a commonly used technical analysis tool used to show price fluctuations. Common K-line patterns include the following:

1. Yang and Yin lines

  • Bullish Candle: Indicates rising prices, usually in white or green. The closing price is higher than the opening price.

  • Bearish Candle: Indicates a price drop, usually in black or red. The closing price is lower than the opening price.

2. Hammer and Inverted Hammer

  • Hammer: Appears in a downtrend, indicating a possible reversal. The body is small, the lower shadow is long, and the upper shadow is short or absent.

  • Inverted Hammer: Appears in a downtrend, indicating a possible reversal. The body is small, the upper shadow is long, and the lower shadow is short or absent.

3. Doji

  • Doji: The opening and closing prices are almost the same, and the real body is very small, indicating that the market is indecisive and a reversal may occur.

4. Engulfing Pattern

  • Bullish Engulfing: In a downtrend, the second bullish candlestick completely engulfs the previous bearish candlestick, signaling a reversal.

  • Bearish Engulfing: In an uptrend, the second black candlestick completely engulfs the previous white candlestick, signaling a reversal.

5. Morning Star and Evening Star

  • Morning Star: It is composed of three K-lines, the first one is a negative line, the second one is a short cross star or a small entity, and the third one is a positive line, indicating a bottom reversal.

  • Evening Star: It is composed of three K-lines, the first one is a positive line, the second one is a short cross star or a small entity, and the third one is a negative line, indicating a top reversal.

6. Dark Cloud Cover and Piercing Pattern

  • Dark Cloud Cover: Appears in an upward trend, when the opening price of the second black candlestick is higher than the highest price of the previous black candlestick, but the closing price is lower than the midpoint of the previous black candlestick, indicating a reversal.

  • Piercing pattern: Appears in a downtrend, the opening price of the second positive candlestick is lower than the lowest price of the previous negative candlestick, but the closing price is higher than the midpoint of the previous negative candlestick, indicating a reversal.

7. Morning Doji Star and Evening Doji Star

  • Morning Star: Similar to the Morning Star, but the short cross star in the middle is a doji, indicating a bottom reversal.

  • Evening Star: Similar to the Evening Star, but the short cross in the middle is a doji, indicating a top reversal.

These patterns are widely used in technical analysis to help traders identify potential market trends and reversal signals.

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