📈📈The "Three Looks" of Candlestick Charts📈📈

Looking at candlestick charts is knowledge that every investor should have, and it's something that beginners need to learn. Faced with various candlestick combinations, beginners may feel a bit overwhelmed, but in fact, mature analysis is also effective. Simply put, there are three aspects to look at in candlestick charts: first, the color of the candles; second, the size of the body; and third, the length of the shadows.

1⃣ Look at the color. The color represents the direction of the market; a bullish candle indicates that prices will continue to rise, while a bearish candle indicates that prices will continue to fall. Taking the bullish candle as an example, after a period of struggle between buyers and sellers, if the closing price is higher than the opening price, it indicates that the bulls have the upper hand. A bullish candle suggests that prices will continue to rise in the next stage, at the very least ensuring that there will be a momentum push upwards. Conversely, the falling momentum of a bearish candle is similar.

2⃣ Look at the body. The size of the body indicates the internal strength; a larger body shows a clearer momentum for either an upward or downward move, while a smaller body indicates less strength. For a bullish candle, the body is the part where the closing price is above the opening price. The larger the body of the bullish candle, the stronger the upward momentum; similarly, for bearish candles, the downward momentum is affected by the size of the body.

3⃣ Look at the length of the shadows. The shadows represent signals of reversal. The longer the upper shadow, the less favorable it is for the price to move in that direction, meaning that a longer upper shadow is a bad sign for price increases. When the price rises, a longer lower shadow indicates that it is less favorable for price declines. Taking the upper shadow as an example, after a period of struggle between buyers and sellers, if the bulls are defeated, we need to see if the candlestick is bullish or bearish. The portion of the upper shadow forms a resistance level for the next stage, increasing the probability of a price adjustment downwards.

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