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Candlesticks and the psychology : Part-2

Learn Candlestick

  1. Candlesticks show a better position than the chart.
  2. The most important features of candlesticks are opening price, closing price, highest price, and lowest price.
  3. Candlestick has received a lot of attention in the market psychology discussion due to its features.

Introducing candles


Each candlestick consists of 4 main components:

  1. Opening price (open)
  2. Closing price (close)
  3. The highest price (high)
  4. Lowest price (low)

Depending on the position of the closing price of the candle (close) compared to the first price (OPEN) (more or less), the candlesticks can be divided into the following two groups:

  1. bullish candle
  2. Bearish candle


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bullish candle


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From the perspective of candlestick shape:

  1. The price of the last transaction is greater than the price of the first transaction.
  2. The body of the candle is hollow (refers to the white color of the candle)

Note: In some cases, other colors are used to draw bullish candlesticks. (blue, green, etc.)

From the perspective of candlestick psychology:

  1. The shopping atmosphere is dominant.
  2. The buyer has taken control of the market.

Bearish candle


3.png

From the perspective of candlestick shape:

  1. The price of the last transaction is lower than the price of the first transaction.
  2. The body of the candle is solid (refers to the black color of the candle)

Note: In some cases, other colors are used to draw Bearish candlesticks. (red, black, etc.)

From the perspective of candlestick psychology:

  1. The sales atmosphere is dominant.
  2. The seller has taken control of the market.
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