Is the K analysis technology derived from Japanese rice market trading also applicable to spot gold trading? The answer is yes, because the K-line chart's method of recording market data is delicate and unique, and it is widely used in futures and stock markets around the world. If investors cannot understand K-line charts, they will not be able to start with technical analysis, because many mainstream analysis methods are based on K-line charts.
The gold K-line chart displays the gold market price, trading volume and other information within a certain period of time on a coordinate chart using a candle chart. In foreign exchange trading software, the commonly used code for gold is XAUUSD, while in MT4, its code is GOLD. As shown in the figure below, the horizontal axis of the coordinates is a fixed time period, and the upper half of the vertical axis is the spot gold price of that time period. , the lower half shows trading volume or other technical indicators. Of course, the mainstream international price trend display methods include bar charts and line charts.
The drawing method and meaning of a single K line
Each gold K-line is drawn from the opening price, highest price, lowest price and closing price of the analysis period. Taking the daily K-line as an example, first determine the opening and closing prices, and draw the part between them as a rectangular entity. If the closing price is higher than the opening price, the K line is called a positive line and is represented by a hollow entity. On the contrary, it is called a negative line and is represented by a black entity.
The gold K-line chart is divided into Yang line and Yin line
In trading software, red cylinders are generally used to represent positive lines, and green cylinders are used to represent negative lines. If the closing price during the time period represented by the column is higher than the opening price, that is, the gold price rises, the column will be drawn in red, otherwise it will be drawn in green. If the opening price is exactly equal to the closing price, a cross line will be formed. In MT4, investors can change the color of the positive and negative lines according to personal preferences and habits.
By reading the K-line chart, investors can quickly understand the gold market daily or in any period. When gold prices rise, fall or consolidate, they may form special K-line combinations, which have different meanings for market outlook. In addition, investors can also use index indicators such as MACD and KDJ to assist in the analysis of K-line charts.