Candlestick patterns are used to predict the future direction of price movement. Discover 16 of the most common candlestick patterns and how you can use them to identify trading opportunities. What is a candlestick? A candlestick is a way of displaying information about an asset’s price movement. Candlestick charts are one of the most popular components of technical analysis, enabling traders to interpret price information quickly and from just a few price bars. This article focuses on a daily chart, wherein each candlestick details a single day’s trading. It has three basic features: The body, which represents the open-to-close range The wick , or shadow, that indicates the intra-day high and low The colour , which reveals the direction of market movement – a green (or white) body indicates a price increase, while a red (or black) body shows a price decrease Over time, individual candlesticks form patterns that traders can use to recognise major support and resistance level...
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