How do you read a candle movement?

Direction: The direction of the price is indicated by the color of the candlestick. If the price of the candle is closing above the opening price of the candle, then the price is moving upwards and the candle would be green (the color of the candle depends on the chart settings).

How do you identify a candlestick pattern?

We look at five such candlestick patterns that are time-tested, easier to spot with a high level of accuracy.Doji. These are the easiest to identify candlestick pattern as their opening and closing price are very close to each other. Bullish Engulfing Pattern. Bearish Engulfing Pattern. Morning Star. Evening Star.Aug 16, 2017

What is follow up candle?

It is the second up day when a long trade should be taken, as the pattern indicates that the price could continue to rally. For the bearish pattern, there is an uptrend, followed by two down days, and either the first or second down day breaks the low of the last up day.

What is a candle indicator?

A candlestick is a type of price chart used in technical analysis that displays the high, low, open, and closing prices of a security for a specific period.

What do the candles mean in trading?

Just like a bar chart, a daily candlestick shows the markets open, high, low, and close price for the day. This real body represents the price range between the open and close of that days trading. When the real body is filled in or black, it means the close was lower than the open.

What is the 3 candle rule?

This triple candlestick pattern indicates that the downtrend is possibly over and that a new uptrend has started. For a valid three inside up candlestick formation, look for these properties: The first candle should be found at the bottom of a downtrend and is characterized by a long bearish candlestick.

What is 3 inside up?

The three inside up pattern is a bullish reversal pattern composed of a large down candle, a smaller up candle contained within the prior candle, and then another up candle that closes above the close of the second candle. For example, use the three inside up during a pullback in an overall uptrend.

How can you tell if a candle is bullish?

Most bullish reversal patterns require bullish confirmation. In other words, they must be followed by an upside price move which can come as a long hollow candlestick or a gap up and be accompanied by high trading volume. This confirmation should be observed within three days of the pattern.

What are the best days to trade?

If Monday may be the best day of the week to buy stocks, Friday may be the best day to sell stock—before prices dip on Monday. If youre interested in short-selling, then Friday may be the best day to take a short position (if stocks are priced higher on Friday), and Monday would be the best day to cover your short.

What does 3 red candles mean?

There are three consecutive red candles with long bodies on three trading days. Candlestick charts show open, low, close and high prices of a trading day. This implies that the price of the security has remained within the low and high range of the day.

How do you trade 3 down?

The three inside down pattern is a bearish reversal pattern composed of a large up candle, a smaller down candle contained within the prior candle, and then another down candle that closes below the close of the second candle.

How can you tell if a candle is bullish or bearish?

A black or filled candlestick means the closing price for the period was less than the opening price; hence, it is bearish and indicates selling pressure. Meanwhile, a white or hollow candlestick means that the closing price was greater than the opening price. This is bullish and shows buying pressure.

How do you know if you are being bullish or bearish?

The term “Bullish” is used because of the way a Bull attacks, moving his horns and head upwards and higher. If a trader believes the price will rise they are bullish. A bearish market means that the price is going down and falling. There is negative momentum.