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Candlestick patterns how to#
Wondering how to read candlestick? Well, you can do it simply by keeping an eye on a few things. This shows that one of the market players, i.e., either the buyers or the sellers, has tried to push the market in one particular direction.
![candlestick patterns candlestick patterns](https://www.investopedia.com/thmb/VnF6FvO4EqZPxFKOmegA8quvlw8=/6250x3959/filters:no_upscale():max_bytes(150000):strip_icc()/UsingBullishCandlestickPatternsToBuyStocks1-ac08e48665894dbfa263e247e53ba04e.png)
In the first condition, t he body is small and has two long shadows on both sides.
![candlestick patterns candlestick patterns](https://www.icmarkets.com/blog/wp-content/uploads/2015/02/t4.png)
Ideally, there are two popular positions of candlestick body. And if the shadow becomes much longer than the body, it shows a turning point, meaning uncertainty in terms of price movement. Similarly, a long shadow indicates a shrink in a trend. And if the trend stays strong, the shadow of the candlestick is small in size. During this phase, the price of an asset moves in the direction of the trend. (Risk warning: Your capital can be at risk) Body to shadow ratioĪ longer candlestick body in comparison with shadow shows a strong trend.
Candlestick patterns free#
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![candlestick patterns candlestick patterns](http://1.bp.blogspot.com/-KhdqIqlgTHo/Um4mJsOg_4I/AAAAAAAAAMI/rZ_Y0g02Cmw/s1600/single-candles-montage.png)
For starters, if the body is long, it shows upward price movement. Simply by observing the size of a candlestick, you can understand so many things. To help you understand more about how the size of the candlestick body, length of the shadow, and body ratio influences market movement, here’s a quick analysis. Similarly, the lower shadow, aka tail, shows the lowest price of an asset in a given time frame. For instance, the upward shadow symbolizes the highest price reach. Just like the colors of the candlestick, the movement of shadow, aka wick, also signifies a change in the value of assets over time. Here, if the body of the candlestick is longer, you can conclude that an item was sold aggressively during that time. On the other hand, if the candlestick is red (bearish), this shows the opening price of an asset was more than the closing price.
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