#analisistecnico #VelasJaponesas #graficos Technical Analysis has among its tools different ways to visualize and understand the price charts of digital currencies.
The best known are linear graphs, bars and Japanese candles, the latter standing out for offering a greater amount of information.
What are Japanese candlesticks?
They are a graphical representation of the financial market price in the form of candles and represent the price behavior over a set period of time.
Japanese candlesticks, also known as candlestick charts, offer a wealth of information about the current and past price of the asset derived from the use of its colors.
These types of charts, used primarily in the stock market, seem complicated at first glance, but they are not, and are of vital importance for any trader who wants to be successful in the financial markets. By understanding Japanese candlestick patterns and their implications, you put the odds of obtaining positive results in your favor.
Each candle on the chart corresponds to a chosen time period, minutes, hours, days or weeks.
How to interpret them?
To interpret them, it is essential to analyze three elements: the color, the body and the wick.
Color indicates the direction of market movement, a green or white body indicates that the price is increasing, while red or “black” shows a decrease.
The body shows us the opening and closing levels of the market, the length of the body represents the distance between the closing and opening prices, that is, the gap between these two points.
The wick shows us the maximum and/or minimum range, representing the ups and downs of the intraday.
PARTS OF A CANDLE
How to use Japanese candlesticks for trading?
They are a technical analysis tool to identify price patterns and market sentiment. They are very useful for:
Identify changes in the trend;
Determine the direction of the trend;
Analyze reversals;
Identify business opportunities;
Set entry and exit points;
Validate other technical analysis tools;
Improve decision-making skills.
Finally, Japanese candlesticks are a quick and intuitive method to understand market psychology and possible trend reversals $BTC .
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