Candlestick Patterns Beginner's Guide - How to Read Candlestick Charts?
Candlestick patterns (also known as “Japanese candlestick charts”) are the indicators that form the basis of technical analysis as we know it today. They were first developed by Munehisa Homma in the 1700s in Japan. Today, Japanese candlestick patterns are an invaluable part of modern traders’ set of tools. They are used to describe price movements of a particular liquid security, currency, or derivative instrument like futures or options. This in-depth guide will help you get familiar with bullish and bearish candlestick patterns and learn how to use them in your daily trading activities.
By default, candlestick charts show one-day intervals. This means if you are observing a one-month chart, you will likely see 20 candlestick patterns. Japanese candlestick charts, however, can also represent intervals longer or shorter than one day.
A single candlestick pattern is constructed of four different components representing important pieces of pricing information for the trading day - open, close, high, and low. The first two, open and close prices, are represented by the thick body of the candlestick. The candle wick and its tail indicate the high and low price points that have been recorded throughout the day. Due to being densely packed with valuable information, Japanese candlestick patterns have become one of the most preferred trading tools.
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0:00 Music Intro
0:26 Intro
1:34 The history
2:15 Reading the candlestick
5:38 Morning star
6:51 Bullish engulfing
7:54 Hammer
9:43 Bullish harami
10:37 Abandoned baby
12:17 Evening star
13:40 Shooting star
14:24 Bearish harami cross
15:00 Conclusion