Learning
how to read candlestick on forex trading is among the technical
analysis system so that you can predict the price movement after that,
according to data the get from the previous candlestick. You will be able to predict whether it can be bearish movement after would also bullish.Psychological
way, the price movement is reflected in the candlestick running because
there is pressure from consumers and sellers. War on bullish and bearish candlestick diverse form.
Candlestick formation:
- Suppose there are few buyers in the market, then the market price may move bullish as well as at the period end market can close above the opening price. This form is meant by bullish candlestick. The ability of buyers could be measured from the movement of the market is moving from a low level up to the closing price. In other words, the long candlestick reflect the dominance of the consumer.
- Suppose there are few sellers in the market, then the market price may move bearish market and at the end of the period can be closed below its opening price. This form is meant by bearish candlestick. The ability of sellers could be measured from the market movement that moves from the highest level down to the closing price. In other words, the long candlestick reflect the dominance of the seller.
To identify the direction or may form the next candlestick, there are five things that need to be observed:
1. War on bullish and bearish
The time control of the market price, the candle can move in the same direction. Such buyers dominate the market it can move bullish candle. Throughout there is no fight from the seller, the form of candle candle can follow disebelumnya.
After more than one trader feels that the market has been too high or overbought, then the seller can fight. These events are meant to act profit-taking.
The battle between buyers and sellers shown on the tail candlestick. Had the war with the greater pressure of domination that occur can potentially make winners dominate the market and this situation may change the direction of the trend or trend reversal. In other words, we are able to identify the next candlestick that can switch directions.
Candlestick formation:
- Suppose there are few buyers in the market, then the market price may move bullish as well as at the period end market can close above the opening price. This form is meant by bullish candlestick. The ability of buyers could be measured from the movement of the market is moving from a low level up to the closing price. In other words, the long candlestick reflect the dominance of the consumer.
- Suppose there are few sellers in the market, then the market price may move bearish market and at the end of the period can be closed below its opening price. This form is meant by bearish candlestick. The ability of sellers could be measured from the market movement that moves from the highest level down to the closing price. In other words, the long candlestick reflect the dominance of the seller.
To identify the direction or may form the next candlestick, there are five things that need to be observed:
1. War on bullish and bearish
The time control of the market price, the candle can move in the same direction. Such buyers dominate the market it can move bullish candle. Throughout there is no fight from the seller, the form of candle candle can follow disebelumnya.
After more than one trader feels that the market has been too high or overbought, then the seller can fight. These events are meant to act profit-taking.
The battle between buyers and sellers shown on the tail candlestick. Had the war with the greater pressure of domination that occur can potentially make winners dominate the market and this situation may change the direction of the trend or trend reversal. In other words, we are able to identify the next candlestick that can switch directions.
2. Candlestick move quickly
Had the greater the candlestick body of the previous candlestick body then it can show the market's enthusiasm. So for example, when many Forex traders open positions, this strength in the search market with a strong trend direction. In fact, such as resistance, in these circumstances we are unable to predict the next candlestick can be greater with the same direction of the trend of the candlestick with the previous trend.
Had the greater the candlestick body of the previous candlestick body then it can show the market's enthusiasm. So for example, when many Forex traders open positions, this strength in the search market with a strong trend direction. In fact, such as resistance, in these circumstances we are unable to predict the next candlestick can be greater with the same direction of the trend of the candlestick with the previous trend.
3. Candlestick move slowly
Slowing candlestick is the opposite of enthusiasm, no doubt from many traders to open trading positions can make a bit of a slow moving market. Hesitation is out because many traders thought that the trend of the market has been too high, too low, oversold, overbought or may get stuck in the support and resistance levels. If there were no traders who open a trading position, can make markets move slowly because of its weakness.
In these circumstances we must be ready to open a trading position in the opposite direction, because the market can take over from the buyer or the seller.
Slowing candlestick is the opposite of enthusiasm, no doubt from many traders to open trading positions can make a bit of a slow moving market. Hesitation is out because many traders thought that the trend of the market has been too high, too low, oversold, overbought or may get stuck in the support and resistance levels. If there were no traders who open a trading position, can make markets move slowly because of its weakness.
In these circumstances we must be ready to open a trading position in the opposite direction, because the market can take over from the buyer or the seller.
4. Candlestick reversed
In a state of overbought or oversold maybe there are some traders who are trying to end a trend and they want to change the direction of the trend. But this effort begins with a test market. They can download a test market to really be able to change the direction of the trend or not. This business is characterized by long candlestick opposite to the direction of the trend.
This condition goes before the current trend in the market up, such as the candlestick will build a candle in the opposite direction of the trend but at the end of the period the market will pull back and closer to the market trend.
This effort provides an indication that the market may reverse. In this state we are prepared to open a trading position in the opposite direction.
In a state of overbought or oversold maybe there are some traders who are trying to end a trend and they want to change the direction of the trend. But this effort begins with a test market. They can download a test market to really be able to change the direction of the trend or not. This business is characterized by long candlestick opposite to the direction of the trend.
This condition goes before the current trend in the market up, such as the candlestick will build a candle in the opposite direction of the trend but at the end of the period the market will pull back and closer to the market trend.
This effort provides an indication that the market may reverse. In this state we are prepared to open a trading position in the opposite direction.
5. Candlestick diverging
The slowdown and reversal can be seen when most traders want prices reversed direction in the market. However, some traders still want to live and exist in the previous trend.
Candlestick divergences occur when there are traders who want to get a good price, when they already know that the market will reverse direction. In this state we can see with the tools of technical indicators. In general, technical indicators can show the potential for divergence so that you can open a new position in the opposite direction of the market trend.
The slowdown and reversal can be seen when most traders want prices reversed direction in the market. However, some traders still want to live and exist in the previous trend.
Candlestick divergences occur when there are traders who want to get a good price, when they already know that the market will reverse direction. In this state we can see with the tools of technical indicators. In general, technical indicators can show the potential for divergence so that you can open a new position in the opposite direction of the market trend.
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