How to judge the market's long-short power comparison through the K-line?

The K-line chart shows the market's long-short power comparison through the opening price, closing price, highest price and lowest price. The entity size and upper and lower shadows reflect the strength of long-shorts, and the combination of K-line and trading volume helps judge the trend.

Apr 03, 2025 at 02:39 pm

Judging the market's long-short power comparison through the K-line is an important skill in technical analysis. The K-line chart can not only show price changes, but also reflect the emotions and power comparison of market participants. This article will introduce in detail how to judge the market's long-short power comparison through K-lines.

The basic structure of K-line

The K-line consists of four price points: opening price, closing price, highest price and lowest price. According to the relationship between the closing price and the opening price, the K-line can be divided into positive and negative lines. A positive line indicates that the closing price is higher than the opening price, which usually means that the bulls have the advantage ; a negative line indicates that the closing price is lower than the opening price, which usually means that the bears have the advantage . The physical part of the K-line reflects the gap between the opening and closing prices, while the upper and lower shadows reflect the range of price fluctuations.

Entity size and long and short power

The entity size of the K-line can reflect the strength of long and short forces. A larger positive line of entity indicates strong bullish forces and strong market bullish sentiment ; a larger negative line of entity indicates strong bearish forces and strong market bearish sentiment . On the contrary, the smaller K-line of the entity indicates that the long and short forces are relatively balanced and the market is in a state of indecision . By observing the entity size of the K-line, investors can initially judge the market's long-short power comparison.

The meaning of upper and lower shadows

The upper and lower shadows are also important indicators for judging the strength of long and short. The K-line with a longer upper shadow line indicates that the bulls encountered strong selling pressure at the high level , and the short-line with a longer lower shadow line indicates that the bears encountered strong buying at the low level, and the long-term with a longer lower shadow line indicates that the bears encountered strong buying at the low level, and the long-term with a longer low level, and the long-term with a higher shadow line indicates that the bears encountered strong buying at the low level, and the long-term with a higher pressure began to fight back . If the K-line has no shadow or the shadow is very short, it usually means that the long-short forces have an absolute advantage and the market trend is relatively clear.

Analysis of combination K-lines

A single K-line can only provide limited information, while a combined K-line can more comprehensively reflect the market's long-short power comparison. Common combination K-lines include engulfing form, pregnancy line form and cross star form . The engulfing pattern consists of two K-lines, and the entity of the latter K-line completely covers the entity of the previous K-line. If the positive line swallows the negative line, it usually means that the bull's power reversal; if the negative line swallows the positive line, it means that the bear's power reversal. The pregnancy line pattern consists of a large solid K-line and a small solid K-line, which usually means that the market is about to reverse. The cross-star pattern indicates that the market's long-short forces are in a equilibrium state, which is usually a precursor to a trend reversal.

Trend judgment of continuous K-line

By observing the continuous K-line, the market's long-short power comparison can be more accurately judged. Continuous positive lines indicate that bulls continue to dominate and the market is in an upward trend ; continuous negative lines indicate that bears continue to dominate and the market is in a downward trend . If the K-line shows a significant upward or downward channel, investors can judge the comparison between the market trend and the long-short forces based on this. In addition, the arrangement of K-lines can also provide important information . For example, if the low point of the K-line continues to rise, it means that the bulls are gradually increasing ; if the high point of the K-line continues to fall, it means that the bears are gradually increasing .

Combined with trading volume analysis

Trading volume is another important indicator for judging the balance of long and short forces. In an upward trend, if the trading volume increases with the price increase, it indicates that the bulls are strong and the market is bullish ; if the trading volume decreases with the price increase, it indicates that the bulls are beginning to weaken and the market may be about to reverse . In a downward trend, if the trading volume increases with the price drop, it indicates that the shorts are strong and the market bearish sentiment is strong ; if the trading volume decreases with the price drop, it indicates that the shorts are beginning to weaken and the market may be about to reverse . By combining the K-line and trading volume, investors can more comprehensively judge the market's long-short power comparison.

Practical case analysis

In order to better understand how to judge the market's long-short power comparison through the K-line, let's take a look at a specific case. Suppose a cryptocurrency has the following K-line combination in a certain period of time:

• The first K-line : a large positive line with a physical body, indicating that the bulls are strong and the market is strong bullish.

• The second K-line : a positive line with a long upper shadow line, indicating that the bulls encountered strong selling pressure at the high level, and the bear forces began to fight back.

• The third K-line : a small negative line, indicating that the long-short forces are relatively balanced and the market is in a state of hesitation.

• The fourth K-line : a large negative line with a physical body, indicating that the bearish force is strong and the market is strong bearish sentiment.

By analyzing the combination of these four K-lines, we can judge that the market's long-short power comparison has undergone a transformation from long-short dominance to short-short dominance. Combined with the trading volume analysis, if the trading volume increases significantly during the third K-line and the fourth K-line, the strengthening of short power is further confirmed.