The 3 "K-line Codes" To Avoid Being Led Astray in Investment

Last week, I compiled notes on K-line for over 200 students. Just half an hour after sharing in the investment group, that document was forwarded more than 500 times. In fact, I am not someone who holds too many complex techniques. What we fear most when investing is not the lack of knowledge, but being "led by the nose" by the market. The "codes" in the K-line chart are precisely the way to discern the thoughts and tactics of big players, thereby avoiding the situation of blind losses. After three years of accompanying over 300 students observing K-lines, I have drawn three important "codes" that any newcomer needs to understand clearly: 1 "Fake - Real" Many new investors are very scared when the price breaks below the 20-day moving average, thinking that a downtrend is about to begin. But in reality, it is necessary to observe the closing candles and trading volume further. Recently, a sister hurriedly reported: "The price has broken through the MA20!" I just advised: "Wait another hour, let's see how the candle closes." The result is that the closing price has returned to the upside, the selling volume when breaking is very large, but the volume during the pullback is gradually decreasing. This is a familiar trick: big players create fake pressure to scare retail investors into panic selling, while they quietly accumulate. 2 "Divergence Warning Between Price and Volume" When the price continuously reaches new highs but the trading volume gradually decreases, be extremely cautious. That is often a sign that the market is experiencing "artificial prosperity." Last year, I helped a friend track a consumer fund. The price chart reached new highs every day, but the volume shrank. I advised her to reduce her position. Sure enough, just three days later, the fund dropped sharply by 15%, and thanks to that, she avoided a heavy loss. On the contrary, when the price is stable but the volume gradually increases, it is often a signal that big hands are accumulating in silence. 3 "Crisis at the Peak Accumulation Zone" Many investors think that sideways movement is a safe zone, but in reality, it is necessary to clearly distinguish between bottom accumulation and top accumulation. At the bottom: the volume gradually increases, the red candle is quickly covered by the green candle → a sign of strong buying power gradually increasing. At the top: the volume gradually decreases, the red candle slowly erodes the green candle. When an unusually large volume candle appears, it is often a warning: leave before it's too late. Conclusion Reading K-line is not about guessing up or down like a game of chance. The important thing is to understand the thoughts of the big players behind each candle. The three codes above – Real Increase of Deception, Price Divergence – Volume, and Dangerous Peak Accumulation – are the tools that help us avoid familiar traps, protect our accounts, and maintain a clear mind in investing.