Hi guys! After 7 basic lessons, you guys can grasp a little, right? Continuing Blogtienao's class series (BTA), this is lesson number 8. In this article, you will have a better view of the model. Japanese candles.
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What are Japanese candles?
Japanese candles represent prices that rise or fall within a given time frame. It helps you identify the market's steps back and forth. Each candle has its own meaning. In Forex or Crypto Candles are also a way of technical analysis. To predict those steps you can look at the candlestick patterns created.
A candle consists of: body and shadow. Prices for the Japanese candlestick form: opening, closing, highest and lowest. Normally, Japanese candles have two colors, blue and red. A green candle represents the price going up (closing price is higher than opening). The red candle represents the price decrease (the closing price is lower than the closing price).
How to read Japanese candles
To read a candle, one must consider the light and body. Candle shadow, also known as low, long beard. It shows that the bulls (bulls) are pushing prices up. Conversely, if the beard is long, the body is short. It shows that the bulls are under selling pressure from the sellers (bears). Shows failure to push prices to the upside of the bulls.
Short antennae indicate that the buyer (seller) controls the price situation. Long whiskers show that the buying (selling) side is less assertive than the other.
What is a Japanese candlestick chart?
The Japanese candlestick chart is a chart of many candles combined to form. Depending on the time frame each candle will represent price fluctuations over a period of time. If you look at the D1 chart, each candle will show the close, open, highest, and lowest of the day. Put simply, each candle represents one trading day in a day.
In addition, you can choose other timeframes such as W1 (week), H4 (4 hours), H1 (1 hour) ... The larger the time frame, the further the price trend is shown. For example, if you look at the weekly chart (W1), you will see a longer term view of the market rather than an H1 chart.
Depending on the trading style, you can view many different time frames. When you are a long-term investor, you can look at timeframes such as: D1, W1. Or a short-term trader can choose a shorter time frame such as: H1, H4, ...
A reversal pattern is likely to be an uptrend. It indicates the price from a downtrend to an upward trend. Give traders a Buy signal. Or it could be a downtrend. No indicates that the price has started to decline and provides a Sell signal.
Here are some bullish reversal models for your reference.
Bullish Engulfing candle pattern (Bullish Engulfing)
The bearish engulfing candle pattern is when the price is in a downtrend and the appearance of a green candle is higher than the red candle ahead. This green candle has a fake opening and the price closes higher than the highest and lowest prices of the red candlestick ahead. Imagine this model simply as this green candle engulfs the red candle ahead.
The pattern is more effective when the green candle engulfs 2-3 red candles ahead.
A hammer candle is when a candle with a long beard appears below and a small body resembles a hammer. This candle may be red or blue. To be sure you can wait for another candle to confirm. The confirmation candle is green and the closing price is higher than the opening price of the hammer.
Note: The hammer above the body may not have any shadow or shadow.
Doji Morning Star candle model (Doji Morning Star)
This model includes a red candle, a Doji candle and a green candle. Doji candles are small bodies. The closing price is nearly equal to the opening price and there are two long beards. This candle shows an indecision of the market.
If the star is a green candle, and the closing price is higher than half of the body of the red candle. Sao Mai Doji model will be completed.
The reliability of the pattern is higher when the green candle is closed above half of the red candle.
Discount island model (Bearish Patterns)
There is a rising model, so there must be a decreasing model! Please refer to the Japanese candlestick patterns below!
The bearish engulfing candle pattern (Bearish Engulfing)
The bearish engulfing candle pattern is opposite to the bullish engulfing candle pattern. A sell signal is formed when a red candle engulfs a green candle. At this point, the bears are overwhelming the bulls.
Dark Cloud Cover (Dark Cloud Cover)
In an uptrend. When a strong bullish candle (long green candle) appears. This is followed by the appearance of a red candlestick that closes half higher (50%) of the body of the green candlestick ahead. Now people can choose to sell or wait for another red candle to confirm the reliability of the model.
Shooting Star candle model (Shooting Star)
In contrast to the Hammer model. The Meteor pattern represents a downtrend and is usually at the top of an uptrend. A pattern formed when there is an inverted hammer (long beard) pattern that indicates that the bulls are trying to push prices higher. But the bears have been in control of the situation and prices have started a downtrend.
Some notes for you
View only closed candles. Do not watch the candles are moving. When the price is fluctuating, the model is not yet complete.
There are also a number of factors in terms of market conditions. You must consider whether you are in a bull market or a bear market. Evaluate additional factors: support area, resistance area, average price line, trend line, price channel ...
You can refer to the Video below to get more information about the candles!
Weekend do? If you like, then watch, if you do not like, please see :)) Source: Trading 212 Source Vietsub: Happy Live
Người đăng: VIRTUAL BLOG on Saturday, November 16, 11
Hope through this article of Blogtienao (BTA), you can gain knowledge about Japanese candles and candle patterns.
If you have any questions, comment below. Our side will try to answer as quickly as possible.
Thanks for everyone who saw the article. Wishing everyone a successful investment!
Note: the article is based on basic knowledge, only applies to newbies to help them have the most understandable look, other pro if you have additional comments, please contact Blogtienao (BTA), If you're new, if you don't understand, join the discussion group below (fb group priority)