How do you read candlestick charts? Come watch this video so you know how to read candlestick charts.
Easy Ways to Read Candlestick Charts
Starting the simplest is the line chart and bar chart, but the most commonly used by traders or investors is a candlestick chart. But here, we will focus on candlesticks. Well first of all the candlestick has a meaning of a candle stick and its shape is certainly like a candle stick which certainly has a stem and wick. For candlestick charts the shape is the same, there are bars called bodies, and there are axes called shadows.
From the shape of the candlestick, we can immediately get 4 important information, namely: the opening price or can be called open, the closing price or close, the highest price is high and the lowest price is low.
The candlestick has 2 colors, namely green and red candlesticks. Green candlestick means that the candle rises because the closing price of the period is higher than the opening price. An up candle can also be called a Bullish candle which means close> open (close is greater than open).
On the other hand, red candlestick means the candle is down. This means that in that period the closing price closed lower than the opening price. Now this candle can also be called a bearish candle which means close <open (close smaller than open).
Price movements can be told in a candlestick. Therefore, let us look briefly at the basic and various kinds of candlestick shapes.
First the price will open at Open and he will move to the highest level at HIGH and get to the lowest level at LOW. At the end of the trip in that period, the price will close at the CLOSE level. And because the close level is higher than the open level. Then automatically the color of the candle is green. If the Open level is higher than close, then the color of the candle is red.
The crest on the top will be called the upper shadow, this is a trail of price travel to its highest level in that period the tail or the leg under the candle is called the lower shadow. Now that is the trail of the price journey to the lowest level in that period.
So why does this candlestick become the most favorite chart for traders? Now because of this candlestick, we only see the color, we can get information about prices up or down in that period quickly. Very simple and efficient right? The rest, the direction of price movement is also directly visible. These candle body shapes also mean something.
This candlestick also has many different shapes and variations. For example there are large, small or short legs etc. Large body candle without shadow above or below illustrates the absolute strength of bull / bear.
A small body with a long shadow above illustrates the strength of a bear or market that wants prices to go down that are strong enough to push prices below. Meanwhile, a small body with a long shadow below illustrates the strength of bulls or markets that expect prices to rise that are strong enough to push prices up. Candle without a body means the balance of bull and bear power.
But surely each chart has its own advantages and disadvantages. According to their own suitability and needs. But because candlesticks have colors and can quickly provide info, we will use candlesticks as an example.
So you just open indodax.com, then click enter visit the marketplace, here will appear the names of digital assets, then click bitcoin, and we click on the advanced chart. Then, a candlestick chart will appear like this. You can also choose the chart view according to your wishes. In addition to candlesticks, there are also display bars, hollow candles, lines, areas and also make ashi.
In this example, we will read this candlestick chart. The name of the chart will be on the left hand side, and this chart is called btc against the rupiah taken from Indodax.com. This number 60 means that from every 60 minutes, this means that per this candlestick describes the price for 1 hour. As we saw in the last candlestick it closes on May 8 at 3 pm at 84,651,000, and also a red candlestick which means a candle that falls or closes smaller than the open in that period. This candlestick also has a long shadow above which means there is a bear power.
Now you understand how to read candlesticks? In the next video we will learn about increasingly interesting topics. Curious? Stay tuned in our Youtube channel and don’t forget to like, comment, subscribe and share this video with your friends.
