교육

Candlestick Analyzes - Part One

The Weakest Candle

A Spinning Top/Bottom (a candle with the same sized upper and lower shadow) is the weakest and the most important candle for us. Note that the body size of the candle is not important. We analyze it like this:

1. if it appears in the middle of a trend, we expect the trend to continue, as a medium-sized candle in the direction of the trend. otherwise, most likely we will get into range or reversal.

2. If it appears at a key level, until observing the next candle, we cannot analyze what could happen. If there is at least a medium-sized candle in whatever direction, we expect the price to continue in that direction, otherwise, it's a range!

Let's look at the chart:
- Candle #1 is in the middle of a trend, but after it, we see a bearish candle. So, it's a range or reversal.

- After seeing candle #1, we draw the box for the MC candle. So, candle #2 is shaped at the support of it. We have to wait to see what will come after it. Because the next candle is a bearish one, we expect the bearish movement to continue, and it continues.

- Candle #3 shaped after a strong breakout. If trends tend to continue, we expect at least a medium-sized candle in the direction of the trend. Otherwise, it'll be a range or reversal coming.