How to Read a Candlestick Chart with a More Simple and Accurate

Puncak-media.com.com – For those who plunge into the world of trade, of course, is not foreign again with a chart or graph that presents information price. Every trading platform used, the movement of the price will be displayed in the form of increased and charts. Historical Data has become a medium for performing technical analysis.

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There are various types of charts that are often used trader. Each has characteristics and the advantages for yourself. One of the favorite maps traders is a candle holder.

Place the wax is Known By its shape, which resembles the stem of the candle. This Media is commonly used to analyze the movement of stock, forex, commodities. However, this is not a regular trader who is entangled with intricate patterns when trying to read it. In fact, there is a way to read a Candlestick That is Simple and accurate.

Get To Know The Candlestick Chart

Before Learning to Read a Candlestick, you have to recognize the characteristics of the first. Anatomy that resembles the candle is not without meaning, but the picture of the important elements in stock. You can pay attention to the picture below.

The above picture shows the dynamics of close High Open low (OHLC) in one week’s time. Lines that are in the top of the candle represents the highest price (high) and is called the upper shadow. On the contrary, the line at the bottom of the candle represents the price of the lowest (low), which is called the shadow of the low.

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Candles live or die is the manifestation of the initial price and the closing price. If the candle is red, it means that the closing price is lower than the opening price. However, if the candle is green, then the closing price is higher than the opening price.

The History Of Candlestick Charts

Munehisa Honma is the figure behind the existence of the wax. Japanese is rice commodities in the 18th century. Every day, he noted the movement of the price of rice in the rice paper. Finally, he found a pattern that repeats itself the price of the rays of his images. Honma often write about the law of trade. The method he evolved into a chart Candlestick known until now.

Place wax Known to the Western World thanks to the role of Steve Nison. He finds this method is time to get acquainted with the real estate agency of Japan, in 1987. Shortly thereafter, he wrote a book called the technique of Japanese candles. This work is famous all over the world.

Profit Chart Candlestick

What are the advantages of graph-shaped candle?

Visual Candlestick looks impressive and so easy on the eyes. This makes people more comfortable to analyze his movements.
The Candlestick is not only showing the fluctuations in stock prices, but also provide a signal related to the changes in price in the future.
Basically, How to Read a Candlestick that’s easy enough. No need to learn a lot of patterns, enough to recognize the elements.
Candlestick able to display the psychology of the market is clear. This, the trader can identify which party is in power, whether the buyer or the seller. This can be observed through body size and shade.

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How to Read Candlestick easily and accurately

Assume the dynamics of prices occurs because the battle between the seller and the buyer. Each element of the candle shows the party where the superior, who died, who holds the reins, and the party has a great chance to win the next battle.

Then, How to Read a Candlestick with a more simple and accurate. Whether the analysis in the four elements below:

1. Body size

Through the size of the body of the Candlestick, you can get information about the strength of each party. If the body is elongated, it means Momentum has been obtained. However, if the body decreases, then the momentum is also slowed down.

2. The long axis of the

The length of the wick or tail of the candles related to price volatility. The long axis show the price is moving fast for the duration of the candle, but got a rejection because of absence of resistance.

3. The ratio between the length of the body and the axis of the

Note the loss ratio and the axis. When the market is experiencing a trend with the momentum high, You will often find the size of the candles but with the axis of the smaller ones.

When market conditions are uncertain, the volatility will increase. Here, the Body of the Candle will shrink, but the fuse is longer.

4. The position of the body sconce

If You’ve got a long-wheelbase candles with the position of the body on one goal, means showing resistance. Meanwhile, the position of the candles on the axis of the shaft axis of the bottom and its axis shows the uncertainty in the market.

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You can just read a reference about different wax patterns. However, knowledge of the elements still have to be prioritized. If You get to know each of the elements with better, then You can master how to read Candlestick simple and accurate.

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