Candlestick Charting 

28. How to Trade Candlestick Chart Formations Part 1


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In our last lesson we ended up our series on technical indicators with a take a look at the Parabolic SAR. In today's lesson we are going to begin a new collection on Candlestick chart developments by checking out a few of one of the most typical candlestick patterns out there.

As you should bear in mind from our lesson on the essentials of trading charts, candlestick graphes present the open, high, low, and close of an instrument and color the "candle light" portion white if the close of the period is more than the open of the duration, and black if the close for the period is much less than the open. The high and also the low of the duration are then connected by a slim line which is described as the wick.

At their most standard candlestick graphes give us a picture of exactly how volatile a particular period was and whether purchasers or sellers won the trading period the candle holder stands for. If a candle is lengthy and white, this informs us that the period started with buyers in control and also remained this way as they drove rates higher throughout the period. If a candle light is lengthy and black this is an indicator of an unstable period where sellers triumphed over buyers. The less of a wick there gets on a long candle the greater the control of either the customers or the vendors relying on the shade of the candle light.

Candle holders which have lengthy wicks as well as brief bodies show durations where there was a great deal of activity pushing the market either greater or lower yet where it ended up shutting right near the open.

If there is a long component of the wick on the top part of the candle suggests that customers at first ran the market up against the vendors but after that the sellers pressed the market back against the purchasers to close the duration right where it opened. Conversely if the lengthy part of the wick is below the candle this suggests that vendors initially pushed the market against the customers yet customers then pressed back efficiently versus the vendors to close the period near its opening.

Short candlesticks stand for durations out there where the marketplace closed near its open through as well as can stand for either durations of little market activity or durations of task where neither purchasers neither sellers acquired much ground.

That ends our lesson on the fundamentals of candle holders. In our following lesson we are going to consider 2 candle holder patterns called The Doji and also The Spinning Top as well as what they can tell us regarding the supply need situation in the market so we intend to see you because lesson.

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24 Thoughts to “28. How to Trade Candlestick Chart Formations Part 1”

  1. InformedTrades

    Hi Donknehtelli, Thanks for the comment. I live in the US where CFD’s are not popular so I am not an expert. The short answer here however as I am restricted by space is that a CFD is simply a representation of the underlying asset and thus should move in lockstep with that asset so, with the exception of volume I don’t see why you could not use any of the other technical analysis tools just as you would if you were analyzing the asset itself.

  2. InformedTrades

    I have posted a more comprehensive answer which you can find in the questions section on the homepage of informedtrades. Best Regards, Dave

  3. InformedTrades

    Thanks a lot for the comment I am glad you liked it. Best Regards, Dave

  4. InformedTrades

    my pleasure. Thank you for the compliment and for watching. Best Regards, Dave

  5. Age of Reason

    great but where is part 2???

    1. non-descript influence

      wojtek0000 have you seen it yet?

  6. InformedTrades

    It is a fact that most traders lose money. The goal of my videos is to help new traders avoid many of the common mistakes that new traders make, however trading profitably is very difficult so don’t let anyone tell you otherwise. Best Regards, Dave

  7. InformedTrades

    The top of the candle represents the highest price that the market has traded for the time period selected and the bottom of the candle represents the lowest price the market has traded for the timeperiod selected. Best Regards, Dave

  8. Randy F

    Do you have a section on DOJI’s?

    1. non-descript influence

      Randy F If you find anything on Dojis, please let me know?

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    hey Dave thanks man this videocourse is saving me some big bucks! i been offer with courses almost 1000 to 2000 and more to be a trader i cant pay that money you know!!! thanks…. and keep it up God bless!

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  12. Affenddy Arifin

    I like this video

    1. non-descript influence

      Affenddy Arifin I like you.

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    i am new to this and i was using a practice account and profited… i want to know if the practice account is legit or just made to lure newbies into the real market? 🙂

    my account is with markets dot com

    1. non-descript influence

      Tholithemba Ntsele The practice account is side to side with a real time account that trades real currency pairs, so, yes, you are trading in real scenarios!

  16. changeisnowpeople

    please discuss hammer and inverted hammer candle stick

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    Did that guy in the glasses make money doing the forex market?

  20. Philippe Deleersnyder

    These technical candlesticks pattern are more familiar to me each time I trade with IQD Momentum Strategy i learnt piratically from Lukasz Wilhelm. they are known as swing points where strong candles are formed. The point when i’m buying the dips and selling the rallies to take profit of thousands of dollars each weekly. it’s an amazing experience. you can check on net for
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