Reading the Characters of Each Candle To Make Technical Analysis Easier
A candlestick is a type of price chart used in technical analysis that shows the high, low, open and close of a specific time period. 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. There are 4 candlestick elements that make it easier for traders to read:
1. Body candlestick
2. Axis Length
3. Ratio (Axis and Body)
4. Position
Body Candlestick
The body size element can help identify who is in control, whether it's a buying trader or a selling trader. The larger or longer the candlestick size, the stronger the control holder. On the other hand, a smaller size indicates that neither the buying trader nor the selling trader can move the price too high.
Axis Length
The length of the wick or tail of the candlestick indicates the volatility of the price movement. The longer the tail of the candlestick indicates that the trader in control had moved 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.
This article, may be useful for all traders. Watch the video below if you still don't understand.
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