Why do we use Japanese candlesticks?
* Predicting trends: Japanese candlesticks help to determine the current market trend and predict the future trend.
* Confirmation of signals: Japanese candlesticks can be used to confirm signals provided by other technical analysis indicators.
* Understanding Trader Behavior: Helps understand traders’ behavior and how they interact with the market.
How to read Japanese candlesticks?
* Candle color: indicates bullish or bearish trend.
* Body size: Indicates the strength of the trend.
* Shadow Length: Provides information about buying and selling pressure.
* Candlestick patterns: There are many candlestick patterns that carry specific meanings, such as the morning star candlestick, the hammer candlestick, the reversal candlestick, and others.
Examples of Japanese candlestick patterns:
* Hammer candle: indicates a possible reversal in an upward trend.
* Hanging Man Candle: Indicates a possible reversal in a downtrend.
* Morning Star Candlestick: A pattern consisting of three candles that indicates a reversal in an uptrend after a downtrend.
Important Notes:
* Japanese candlesticks are a single analytical tool: they should not be relied upon alone to make investment decisions.
*Continuous training: Learning to read Japanese candlesticks takes time and effort.
* Use with other tools: Japanese candlesticks can be combined with other technical analysis indicators for more accurate analysis.
Why should you learn Japanese candlesticks?
* Powerful tool: Helps you understand the financial markets better.
* Free: There are many free educational resources available on Japanese candlesticks.
* Wide Application: Can be used in trading stocks, cryptocurrencies, forex, etc.