A candlestick depicts the battle between Bulls (buyers) and Bears (sellers) over a given period of time.
Before I get down to the essentials, it’s important for us to understand what a candlestick actually is.
No, we’re not talking about the candle you pick up from that fancy store to set the mood on date night. We’re talking about Japanese Candlesticks — the market signal that shows the battle between the Bulls and the Bears over a certain amount of time.
Why do you need to know Candlesticks like the back of your hand? Because knowledge could give you the upper hand when the Bulls and the Bears are in the middle of a market.
Candlestick formations allow you to find setups, determine market direction and identify optimal entry and exit points that could help you execute profitable returns consistently in your trades.
Bulls, Bears, buyers, sellers…is anyone else confused? Don’t get your trend lines in a bunch; it’s easier than you think.
when you know that what a candlestick is, we can talk about how they essentially determine how you attack the market. At first glance, you’ll notice two types of candlesticks: Hollow (Light) candlesticks - close price is greater than the open price, indicating buying pressure. Filled (Dark) candlesticks - close price is less than open price, indicating selling pressure
Clear as black and white, wouldn’t you agree? Now that you have this part down pat, you’re ready to learn about the Bulls
and the Bears.
The relationship between the open and close is considered vital information and forms the essence of candlesticks. Hollow candlesticks, where the close is greater than the open, indicate buying pressure. Filled candlesticks, where the close is less than the open, indicate selling pressure.
