INTRODUCTION TO CANDLESTICKS I

CANDLESTICKS  BASICS

✍Candlestick charts are thought to have been developed in the 18th century by Munehisa Homma, a Japanese rice trader. They were introduced to the Western world by Steve Nison in his book, Japanese Candlestick Charting Techniques.

✍The colour of candle decides weather the candle is bullish or bearish. The bullish candle indicates that the closing price is greater than opeaning price. The bearish candle indicates that the opeaning price is greater than closing price.

✍As shown in the above image the candle formations consists of :-

1)upper shadow 

2)lower shadow 

3)real body

✍The time frame of the candle decides the time taken by a candle for formation. Eg. The candlestick time frame is on 2 hour then 2 hours is taken to form complete candle.

CONTENTS  OF  CANDLESTICK:-

1. LOWER  SHADOW

This indicates that the low made by the stock/index in the specific time frame.

2. UPPER  SHADOW

This indicates that the high made by the stock/index in the specific time frame.

3. REAL  BODY

This indicates the opeaning price and closing price of the candle.

While trading in a candlestick pattern the weitage has to be given to either shadow or body of the candlestick whichever has size more.

MYTH  BEHIND  CANDLESTICKS

1. Candlesticks can be used in short term not in long term.

Candlesticks patterns can be used in both long term and short term trading. Many people can say that short term is trading and long term is investment, but this is not true. Trading can be more than 1 year or can be also more than 5 years. Long term trade is also possible in technical analysis. 

Candlesticks pattern can be 1 minute, 5 min, 15 minute to 1 week and 1 month. 1 week candlestick chart patterns can be used to take trade for 3 to 6 months and 1 month candlestick pattern pattern can be used to take trade for 1 year. 

➖➖➖➖➖➖➖➖➖➖

OPEN ACCOUNT IN UPSTOX AND GET CASH  REWARDS. 

CLICK  to  WhatsApp  me

➖➖➖➖➖➖➖➖➖➖