Analyzing the chart of Japanese candlesticks involves searching for certain candles or their combinations (also called: models, candle shapes, or patterns (pronounced with an emphasis on “a”)), which are used to determine market situations and make trading decisions. Candlestick chart analysis is an efficient trading tool.
This type of graphical candlestick analysis has high versatility and good efficiency, including in the long-term prospects.
The secrets of candlestick chart analysis
.Important features of the analysis of Japanese candlesticks
Like any other method of trading or market analysis, candlestick chart analysis has its specific features and nuances. Knowing these features will save the trader time and effort when studying, as well as money when trading later.
Candlestick technical analysis works best when used on a daily time frame. As the time interval decreases, the degree of reliability of candle models decreases. Candlestick patterns DON’t WORK on charts below the hourly chart! It was tested repeatedly in practice in real combat conditions. Of course, you can spend a lot of time, effort, and money proving the opposite, but I don’t think it’s worth it.
The reliability of candlestick analysis increases on weekly and monthly charts. However, we should not forget that the range of such candles is quite large, and on the charts of lower time frames, whole short-term trends can fit into their range. Therefore, candlestick analysis at such high time intervals should be used to determine the overall trend.
How to make candlestick technical analysis
The nature of candles can tell you a lot during the homing pigeon candlestick analysis.
The bull candle.
According to candlestick analysis pdf from the Internet, currently, the market is under pressure from buyers. As long as buyers maintain sufficient strength, the candles will be bullish. If the buyers ‘ strength weakens and the selling pressure increases, then the bullish candles will become smaller. This will mean a decrease in the strength of the bulls.
The bear candle.
In this case, according to technical analysis candlestick patterns pdf, currently, the market is under pressure from sellers. As long as the sellers maintain sufficient strength, the candles will be bearish. If the strength of sellers weakens and the pressure to buy increases, then bear candles will become smaller. This will mean a decrease in the strength of the bears.The importance of nick and candlestick analysis is incredible for the trader. You may click the button candlestick chart analysis free software download to check it.