Candlestick Formulas that Investors and Traders Must Know
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Candlestick Formulas that Investors and Traders Must Know

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Candlestick Formulas that Investors and Traders Must Know

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For beginners, understanding the candlestick formula is mandatory. Because, with all the limited knowledge at the beginning of entering the crypto world, the procedure for reading candlesticks is the solution.

Not only that, decision-making can be obtained immediately by simply reading an accurate candlestick.

You can immediately determine when to start ‘buying’ at the lowest price and ‘selling’ at the highest price.

If you are more proficient at reading candlestick patterns well, then the goal of getting coffers of profits can be realized easily.

Flying hours reading candlestick patterns will answer it, along with increased trading volume.

To understand the complete candlestick pattern, you can read this article to the end.

After that, all you have to do is practice it when making transactions and starting trading.

Candlesticks, Simple Informative Trading Patterns

Before discussing candlestick patterns in detail when trading, you can understand the shape of the candlestick and what it means.

By looking at it, you can learn the parts of the candlestick which can be used as a basic understanding to increase knowledge.

You can also better understand market patterns and price changes through candlestick charts. Moreover, both fundamental analysis is also essential factor.

Like how to read stock prices, the top and lowest prices of crypto assets can also be monitored.

So you can determine the best trading time to make transactions.

This strategy for how to read candlesticks for beginners is increasingly important to know.

Moreover, this candlestick formula will be the solution for carrying out your trading activities.

The Main Components of the Candlestick

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To understand accurate candlestick patterns in investing, two types of fundamental analysis and technical analysis must be understood.

Both chart analyses can be used as a reference to see price movements to carry out profit-making analyses.

To pay attention to the candlestick, you need to understand the two main components that make up the candlestick that you can know.

1. Candle Body Parts (Body)

This candlestick section will show an opening and closing price starting at a specific time.

This can be seen from the rectangular shape, red or green, with other colors, black or white.

2. Candle Tail Section (Shadow/Wick)

In this candlestick section, the stock’s highest price and lowest price at a certain point in time will look like a straight line.

This section extends above and below the candlestick’s body and will be colored like the shape of the candle (candle).

In addition, the color difference on the candlestick also has meaning as an indicator.

The red color means a price decline (Bearish) is taking place. This indicates the closing price is lower than the opening price.

Meanwhile, green means a price increase (bullish) seen from the closing price, which will be higher than the opening price.

On the other hand, if you find a colorless candlestick pattern, black will indicate a bearish situation. At the same time, the white color will indicate a bullish situation.

Types of Candlestick Patterns

Determining the candlestick formula must also pay attention to candlestick performance in particular.

As for the types of candlesticks that you can understand, such as reversal and continuation candles.

But before understanding further, you should look at the momentum. How to read candles?

If you look at the nature of the candlestick, then the meaning of the reversal can be concluded in the form of momentum when the price reverses and creates a new trend.

While continuation, where the direction of price movement continues. So we have to look at the momentum in the future regularly.

Similar to reading forex candlesticks, crypto trading candlestick formulas have various types and patterns.

What are the candlestick patterns you need to know?

1. Three Line Strikes

Three bullish lines in this candlestick pattern and formula will create three black candles with a downtrend. And on each bar will show the lowest point that looks lower.

The positions of these bars will also close with the intrabar low. On the fourth bar, it just opened lower but seemed to reverse direction.

2. Two Black Gapping

The Two black gapping candlestick patterns in bearish conditions will appear when a critical peak in the trend looks up.

The position would have gaped downwards and resulted in two black bars that were in lower lows.

If this pattern appears, you can predict the decline will continue to the lows and lower.

As a result, it can trigger a downtrend on a larger scale.

3. Three Black Crows

The three black crows pattern with a bearish position will start with three black bars at the lowest.

Further, it will have lower positions closing at intrabar lows.

For this pattern, there will be a continuing decline to lows with even lower positions. Of course, this possibility will trigger a more significant scale downtrend.

For the most bearish version, it starts at a new high because it will trap buyers by entering a momentum play that must be watched closely.

4. Evening Stars

For the Evening Stars condition and pattern, a bearish position starts with a high white bar that takes the uptrend to new highs.

Meanwhile, market gaps at a higher level in the next bar will occur and are caused by FOMO buyers who don’t enter the market. The result obtained on the next bar becomes a narrow range.

A gap down on the third bar, seen completing the pattern, would predict that the decline continues at lower lows.

This is likely to trigger a broader-scale downtrend.

5. Abandoned Baby

In the abandoned baby candlestick pattern, bullish appears at the low point of the downtrend.

This would occur with a series of black candles to print lower lows.

Meanwhile, for lower market gaps, it will occur in the next bar.

Although the opposite of evening stars, this pattern can produce narrow-ranged Doji bars.

A bullish gap in the third bar of the pattern would predict that the recovery will soon extend to higher highs. In effect, it will allow triggering a more significant scale uptrend.

How to Read 1 Minute Candlesticks Accurately

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After understanding and understanding the candlestick formula above, it’s a good idea to know how to read a 1-minute candlestick accurately.

Because, if successful, you can apply this strategy if you want fast profits.

As a beginner, it’s good to understand candlestick patterns. Mainly when using a scalping strategy.

Before discussing the advantages and disadvantages, let’s learn more about scalping.

Scalping is part of a trading method that focuses on quickly making profits from selling assets. Usually, traders who use scalping methods are commonly referred to as scalpers.

So, these scalpers usually aim for profits from buying and selling digital assets and set a percentage target on certain gains from these digital asset transactions.

In general, the candlestick formula is relatively easy if you study it diligently.

There are only so many types of candlesticks that can be used as a guide for beginners.

Slowly but surely, you will be able to understand it well. It only remains to be brave to make transactions with careful calculations so as not to lose.

Well, what now? Do you understand enough about the candlestick formula?

You can see the crypto market today to trade and make a profit if you already understand.

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