(A beginner’s guide)
How to read
@swagataborah
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What are CANDLESTICKS
Simply, Candlestick shows us four important things:
where the price started, where it ended, how high it
went, and how low it went.
The candles can be different colors. If a candle went up in
price, it might be green, and if it went down, it could be
red. So, candlesticks help us see if the price went up or
down over a certain time, like a day or an hour.
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How to read a CANDLE
market price [Link] that the candlestick
is going up
appears green or blue when the
market is moving upward, it's
like a "go" sign, showing that the
market is moving upwards.
2. Acknowledge that the market
price is declining if the
candlestick appears red. Red
market price
candlesticks typically indicate a is going down
downward trend, signaling that
the market price closed lower
than its opening.
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3. Check the bottom of a
green candlestick or the
top of a red one for the
opening price.
Opening
price
4. Locate the closing
Closing price at the top of a
price green candlestick or the
bottom of a red one.
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High price
5. Examine the upper
shadow, also called the
"wick," of the candlestick to
identify the high price. .
6. Inspect the lower
shadow, also known as the
lower wick, of the
candlestick to identify the
low price.
Low price
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Understanding Various Candlestick
Patterns
[Link], short candlestick
bodies denote minimal
buying or selling pressure,
while long-bodied ones
signify strong pressure and
substantial price
movement.
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2. Search for candlesticks with long
upper shadows and short lower shadows to
discern buyer-driven price movements,
reflecting a tug-of-war between buyers
and sellers during trading.
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3. Look for candlesticks with short upper shadows and
long lower shadows to identify seller-driven price
movements, indicating sellers pushed prices down
during trading but buyers pushed them up towards the
end, revealing the influence on price action during
trading.
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4. Note that skinny candlesticks, known as
"doji" candles, signify equal opening and closing
prices and often signal potential market
reversals, particularly when following long-
bodied candlesticks, with doji indicating
decreased selling or buying pressure, potentially
signaling a shift in trend.
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5. Spot potential trend reversals by identifying
"hammer" candlesticks with short bodies and
long bottom wicks, particularly impactful when
observed after a downtrend period, more
significant on longer-term charts spanning 1-4
weeks.
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6. .Watch for potential uptrend reversals with
"shooting star" candlesticks, featuring short
bodies and long top wicks, particularly impactful
after an uptrend period, more significant on
longer-term charts spanning 1-4 weeks.
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In conclusion, candlestick charts are a powerful
tool for traders to analyze market trends and
make informed decisions.
By understanding the various candlestick patterns
and their meanings, traders can interpret price
movements and anticipate potential changes in
market direction.
Whether you're a beginner or an experienced
trader, mastering candlestick analysis can greatly
enhance your trading strategy and overall success
in the financial markets.
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