Directly stating my viewpoint, the answer is affirmative: bare K-line trading is indeed effective.

What is bare K-line trading?

Bare K-line trading refers to the practice in actual trading where the trader uses the patterns of K-line formations as the standard for trading decisions. For instance, reversal K-lines are used to confirm trend reversals, and continuation K-lines are used to confirm the continuation of trends. In the trading system, only the patterns of bare K-lines are used as criteria for entry, stop-loss, and profit-taking.

The most direct manifestation of bare K-line trading is that on the trading software's chart, there are no other superfluous indicators, only K-lines. However, in practical trading, some traders may also introduce technical standards such as support and resistance levels as a supplement to bare K-line trading.

Why is bare K-line trading effective?

1: Bare K-lines are the fastest indicators for identifying trend reversals.

K-lines are the direct representation of price on the chart, and reversal K-line patterns are the earliest technical indicators that can identify trend reversals.

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Consider this: other indicators are derived from the calculation of moving average prices, such as moving averages, Bollinger Bands, MACD, and so on. Therefore, compared to K-lines, they inherently have a lag.

For example, after a moving average crossover confirms a trend reversal, it must be the case that the K-line has formed a reversal pattern, and the price has reversed and moved a certain distance before the moving average can turn and cross over.2: Bare K-line is clear, and the technical standards are easily identifiable.

The formation of a bare K-line after closing is very clear and simple, making it easy to recognize the technical standards.

For example, when a reversal K-line is established at the closing, one can immediately enter the market, with the closing price serving as the entry price. The high and low points of the reversal K-line can be used as the standard for setting a stop loss. Both elements of a trade, entry and stop loss, are thus in place.

If other technical indicators are used, the process becomes much more complex. For instance, a bottom divergence in the MACD occurs within a certain area, and the details of trading such as entry and stop loss must rely on other indicators, making it relatively more complicated.

On the right side, the MACD forms a top divergence, but divergence is associated with a price range. To enter the market, one must rely on other indicators; otherwise, it is difficult to confirm the entry signal and the standard for setting a stop loss.

Some friends might wonder, since we are discussing bare K-line trading, why are you talking about reversal patterns?

Because identifying the turning points of the market and placing orders is the most profitable and efficient way to trade. In K-line technical methods, reversal K-lines represent the most important, meaningful, and valuable opportunities. If you have read some trading books, you will also find that the section on reversal K-lines is quite extensive. When trading, it is crucial to focus on the key points, which is why I use reversal K-lines as an example.

It can be said that if you can effectively use reversal K-lines, then you have succeeded in bare K-line trading.

However, there are some precautions to take when using bare K-line trading.

Firstly, in practice, choose simple and easily recognizable bare K-line patterns for trading.There are numerous books on candlestick patterns, and all of them provide a general rule regarding these patterns, but there is no absolute standard. This leads to a lot of subjectivity when using raw candlestick charts for trading. Therefore, selecting some simple and easily recognizable candlestick patterns reduces the subjective elements in actual trading, which is more conducive to the execution of trades.

For instance, in my practical experience, I only use four types of reversal candlestick patterns: the bullish engulfing pattern, the bearish engulfing pattern, the evening star, and the morning star. These four patterns are easy to identify and occur frequently enough for our trading needs, eliminating the need to study overly complex candlestick techniques.

Secondly, there are drawbacks to using raw candlestick charts, or "naked K" as they are sometimes called.

While raw candlestick charts are useful, they come with their own set of issues. As I mentioned earlier, they are the quickest technical indicator for identifying trend reversals. However, before a trend reversal occurs, if the market enters a period of consolidation, it can produce multiple consecutive reversal candlestick patterns, which can be quite unstable.

If you do not combine them with other indicators at this time, the signal filtering will be poor, leading to a series of consecutive stop losses in trading, which is the biggest disadvantage of raw candlestick charts.

On the other hand, the risk-reward ratio of raw candlestick charts is favorable. A trend can be composed of dozens or even hundreds of candlesticks. Using raw candlestick charts as a trading criterion, the stop-loss space is minimal, for example, using the space of one candlestick as the stop loss, and the market moves through the space of dozens of candlesticks, the risk-reward ratio is certainly very reasonable.

In summary, every indicator has its own strengths and weaknesses, and no indicator is absolutely perfect. The effectiveness of an indicator depends on the person using it.