Candlestick Main Elements
Candlesticks are generally used for short-term trading, so they are more suitable for use by traders. One of the advantages of candlesticks is that they can easily display market psychology. Generally, to describe the state of the market price that has increased (bullish) candlesticks are used green or white candlesticks. Meanwhile, to describe the condition of a declining (bearish) market price, the candlestick used is red or black.
The main elements of a candlestick:
Candlestick Body Size
The element of measure can help identify who is in control, be it a buying trader or a selling trader. The larger or longer the candlestick size, the stronger the control holder. On the other hand, the smaller the size indicates that neither the buyer's trader nor the seller's trader can move the price too high.
Candlestick Shape
The length of the tail of a candlestick shows the volatility in price movements. The longer the tail of the candlestick indicates that the trader in control had time to move the price far enough before being rejected due to a 'backlash' from other traders. The longer the tail of the candlestick, the greater the price volatility. Candlesticks with short bodies at the ends and long tails indicate a reversal, generally found in areas of support or resistance. While a candlestick with a short body and in the middle between two elongated tails indicates the market is in doubt, both buyers and traders.
Candlestick Position
The component that most determines the chance of winning in transactions using candlesticks is the position of the candlestick against the trend of a price. The candlestick pattern that appears indicates an opportunity to continue the trend or a price reversal pattern occurs.
Comments
Post a Comment