Basic Chandlestick Shapes & Chandlestick Patterns
What does candlestick mean?
Candlestick is a technical analysis of an indicator that can offer complete information, it can be called in a visual form which of course can be easy to read and understand among traders. Maybe it's no longer surprising among traders that this candlestick is very popular for stock, forex, and binary traders. Not even a few traders use this candlestick as the main "tool" in reaping their profits. Usually, the use of this candlestick is equipped with a second party "tool" that will provide additional information in trading as confirmation to make a purchase...
Maybe not a few of you know about candlesticks, especially knowing how a candlestick informs what is happening in the market. In this article, let's discuss what information we can get from a set of candlesticks that form in a certain period. But if we discuss candlestick maybe we will take a long time and maybe it will take a few pages, therefore I will try to make it a few parts. The following is a collection of examples of candlesticks that usually form certain patterns.
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| Candlestick Patterns |
You need to know, that usually, different candlestick patterns will of course provide different information. Therefore, from this pattern, we can predict or analyze whether the price in the market will go up or down in the future. Some candlesticks are very precise in predicting (based on historical data) so that we don't need confirmation anymore, but it's better if we still use confirmation. It can be said that a buy/sell signal from the candlestick is enough for us to make a decision without waiting for confirmation.
However, we must recall the name "risk" in a trade, we still have to minimize the risk. There is nothing wrong with us still waiting for confirmation before we act or make decisions based on what the signal from the candlestick pattern gives. Although the candlestick pattern is known as a very accurate and precise pattern though. Therefore, we will discuss in detail the candlestick patterns that may be formed and what information we can get from the shape of the candlestick patterns.
Chandletic patterns are generally divided into two parts, namely a bullish pattern that predicts a price will go up, and a bearish pattern that predicts a price will go down. Therefore, let's learn together how to read the candlestick pattern so that we can predict a price will go up or down. Therefore, it is hoped that all of us can make the right decisions in buying or selling, here we will also learn how to know a trend will reverse direction.
How to Basic Candlestick Shape?
As I said above, it has been said that the candlestick offers us the convenience of analyzing a stock or market price movement. Actually, in this case, everything is made possible by a very simple thing, namely the color of the stem (body) of the candlestick.
Let's study and discuss the basic form of the candlestick, although it is possible in practice the shape of the candlestick is very varied. However, by understanding the basic form of this candlestick, at least we will understand what information is contained in other variations of the pattern. This basic form is of course shaped by the opening price (O), the highest price (H), while the lowest price (L), and the closing price (C). For more details, let's look at the image below:
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| Basic Candlestick Shapes |
We can see how the price forms a candlestick from the picture above. As explained that the opening price (O) is the beginning of the body, while the closing price (C) is from the end of the body. So this means the bars are formed by the opening and closing prices. We can also see that two tails are formed, where the bottom tail is formed with the lowest price (L). The upper tail, it is formed by the highest price (H). So it's clear at this point how the OHLC price forms a candlestick......
Looking again at the picture above, we can see that there are also two basic forms of the candlestick which are distinguished by their body color, namely green and red. The green color means the opening price is lower than the closing price, and vice versa.
Although in practice this color is not standard, we can define our own color that we can consider more comfortable with ourselves, for this we can go to settings. Because the online trading application allows or allows us to be able to change the color of the chandelier according to our individual desires. Any color does not matter, the most important thing is as long as we still know how the candlestick is formed and we can read the information contained in it.......