MEXC Exchange Research: Example of K-line usage

The higher shadow is the line above the candle body, while the lower shadow is the line below the candle body. The length of the body and the arrangement of different shadow lines might indicate distinct market trading situations.

Spinning top (Isometric upper and lower shadows):

This K-line pattern indicates that the market is trending upward, but there is insufficient price negotiation space between the highest and lowest prices due to the low actual trading activity. There is no room for speculation in our everyday trading process if there is no price discussion. This demonstrates that the market lacks the ability to rise or fall, and that the market is currently consolidating.

Inverted Hammer:

The opening price is the same as the lowest price, which normally appears on the downtrend's floor, and the selling strength has been expended. This could indicate a future trend recovery.

This pattern also indicates that the bottom point has been reached for the bulk of market players, and a consensus has emerged.

Hammer:

At this point, there is still room for asset prices to fall more in the future. This pattern indicates that the market is continuing to test the price, that the buyer and seller are playing a pricing game, and that the buyer has the initiative at this time. If the test is successful, the following candle should be either a rising candle with a short upper shadow (indicating sellers attempting to maintain the current price) or a falling candle with a lengthy lower shadow (showing buyers attempting to maintain the current price) (meaning that buyers are not satisfied with the current price, and the price may go up).

Doji Candlestick: A Doji Candlestick is a type of K-line chart in which the closing and opening prices are equal or comparable.

The arrival of the Doji candlestick is a symbol of volume and price stagnation. When the Doji candlestick reaches the bottom, it indicates that the market's long-term decline is coming to an end, and it may initiate an uptrend, dubbed "the star of hope." When the Doji candlestick occurs at a higher price near the top of the market, it indicates that the upward momentum has slowed and the market may be about to enter a decline.

Engulfing Candlestick: In an upward market, it means the opening price is the lowest, and the market has no objection to the price; in a downward market, it means the opening price is the highest, and the market has no rescue measures for the downward trend.