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[Star R] The basic composition of a candlestick
Opening Price: The price at which the transaction was initially traded on a trading day.
Closing Price: The last traded price of the trading day.
High Price: The highest traded price during the trading day.
Low Price: The lowest traded price during the trading day.
A candlestick usually consists of three parts:
Upper Shadow: Located above the candlestick, it indicates the price range between the high price and the closing price (or opening price, depending on the yin and yang of the candlestick).
Entity: Represents the price range between the opening and closing prices. A white candlestick (red or white) indicates that the closing price is higher than the opening price, and a black candlestick (green or black) indicates that the closing price is lower than the opening price.
Lower Shadow: Located below the K-line, it represents the price range between the lowest price and the opening price (or closing price, depending on the yin and yang of the candle).
[Star R] How to interpret candlesticks
Interpretation of a single candlestick
Bullish and Negative: A bullish candle indicates that the market is rising during the session, and a bearish candle indicates a falling candle.
Entity size: The longer the entity, the stronger the market's attack. The longer the body of the white candlestick, the more sufficient upward momentum; The longer the body of the black candlestick, the greater the downward momentum.
Shadow length: The longer the shadow, the stronger the market's resistance or support in that direction. The longer the upper shadow, the greater the resistance to the upside; The longer the lower shadow, the stronger the support.
Interpretation of candlestick combinations
Double Bottom and Double Top: A double bottom (W bottom) is a signal that the market is turning from falling to rising; A double top (M head) is a signal that the market is changing from rising to falling.
Inverted Head and Shoulders & Overhead: Inverted Head and Shoulders is a pattern in which the market reverses and rises, while Head and Shoulders Overhead is a pattern in which the market reverses and falls.
Pregnant line: A pregnant line usually indicates that a market reversal may be imminent.
Doji: A doji indicates that the market opens and closes the same price during the session, and the power of the bulls and bears is balanced. A high may indicate a peak, and a low may indicate a bottom.
Red Three Soldiers and Three Crows: The Red Three Soldiers are three consecutive positive candles, indicating that the market is rising strongly; The three crows are three consecutive black candles, indicating that the market is weak and falling. However, it should be noted that the three crows on the way up may be a manifestation of multi-party energy accumulation.
Combining position and capacity
Position: The position of the candlestick is crucial in judging its nature. For example, a long upper shadow that appears at the beginning of a rally may be the behavior of the main force to test the market, while a long upper shadow that appears at the end of a rally may be a signal of a peak.
Volume energy: Volume is an important indicator to judge the market trend. In candlestick charts, the volume is usually analyzed in combination with the size or color of the candlestick body. For example, a bullish candlestick that rises in volume usually indicates that the market has sufficient upward momentum; The negative candlestick of the volume decline may indicate that the market has strong downward momentum.
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