What are Candlestick Charts?. Candlestick charts are an attractive… | by CointradeIndia | Oct, 2022
Candlestick charts are an attractive way to chart price fluctuations. Time is represented by candlesticks. Candlesticks can be used to represent anything from a few seconds to a lifetime. Candlesticks can be used to predict market movements. Candlesticks have many benefits. It is possible to trade crypto 24 hours a day, unlike stock markets. Interval prices are called “open” and “close” prices, respectively.
Anatomy of a Candlestick
Body: The body shows the range of open to closed. A closing price difference reflects the difference between a price at closing and a price at the opening.
Wicks: They are also called “shadows” or “tails”. Over time, candlesticks show the asset’s best and worst price points. There is no wick when there is no opening and closing price.
Highest Price: A high price exchanged during the period is represented by the top of the upper wick.
Lowest Price: This is the lowest price at which the asset is traded at the bottom of the lower wick.
Opening Price: Basically, this is the price at which the first candlestick trade took place. Red candles indicate falling prices; green candles indicate rising prices.
Closing Price: The candle-closed prices reflect candle prices during the candle’s formation period. Green candles show prices higher than the opening price, while red candles show prices lower than the opening price.
Popular Candlestick Patterns
Candlestick patterns can show you more than just price movement. A seasoned trader looks for patterns to assess market sentiment and predict market direction.
It is easy to recognize hammer patterns. At the bottom of a downtrend, a candlestick with a long lower wick forms a hammer pattern. It is usually little or no upper wick on a small body. Hammers are available in red or green. The presence of hammers indicates a possible price surge or trend reversal. During this time period, there was intense selling pressure, but also renewed buying pressure.
The Hanging Man
Hanging men are the bearish counterparts of hammers. A small body and a long upper wick usually develop at the end of an uptrend. Despite a significant sell-off, bulls seized control and drove the market higher. The sell-off following a prolonged rally may be a sign that the bulls are about to lose control.
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