TA & CandlesticksHelping Us to Identify Trends and Signals to buy or sell

What IS TA

There are three main types of trends:

Technical analysis and trend analysis are trading disciplines used to

evaluate potential buy and sell positions, and identify trading opportunities

by analyzing trends gathered from trading activity, such as price movement

and volume.

Short

Intermediate

and long-term.

What are Candlesticks?Candlestick charts are a type of financial chart for tracking the movement

of coin. They began in the Japanese rice trade and now also have their place

in today's charts... they are THAT old.

OPENING PRICE

CLOSING PRICE

THE HIGH PRICE

THE LOW PRICE

Candlesticks are called "candlesticks" they looks similar to... you guessed it.

Candles..

Most traders find them more visually appealing than the standard bar charts

and the price actions easier to interpret.

Over time, the candlesticks group into patterns that we can use to make

buying and selling decisions and each candlestick represents price data for

that given time period through four (4) pieces of information..

Disclaimer: 

Traders should use candlestick charts like any other technical

analysis tool BUT realise they are not the be-all-end-all

and should always be used in conjunction with

indicators/fundamental analysis etc to confirm your bias.

Candlesticks 101: 

Bullish Reversals and Candles

:?///////////////////////OPENING PRICE | CLOSING PRICE | THE HIGH PRICE | THE LOWE

Just like red means stop, green means go and green candles represent

"bullish" price action. Which means that the price of a given coin is

going up, until such time as it hits a level of resistance and starts to

move down (become bearish)

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 candlestick or clear move up, and be accompanied by high

trading volume. 

Bullish reversal patterns should form within a downtrend.

Otherwise, it’s not a bullish pattern, but a continuation pattern.

EXAMPLES OF BULLISH FORMATIONS

The HammerThe Hammer candle means that a coin is almost at the end of it's downtrend

and things may be about to change. The body of the candle is short with a

longer lower shadow which is a sign of sellers driving prices lower, only to be

followed by strong buying pressure to end on a higher close.

Before we jump in on the bullish reversal action, however, we must confirm

the upward trend by watching it closely because the reversal must also be

confirmed with an increase is buying volume.

The Bullish EngulfingThe Bullish Engulfing pattern is a two-candle reversal pattern. The second

candle completely ‘engulfs’ the real body of the first one.

A trader could enter a long position when the price moves higher than the

high of the second engulfing candle when the reversal is confirmed.

A Bullish Engulfing pattern appears when price opens lower than the

previous low, but buyers are pushing the price up to a higher level than the

previous high, creating some juicy profits for the trader!

The Morning StarConsists of three candles: one short-bodied candle (doji or a spinning top)

between a former bearish candle and a following bullish one. 

It shows that the sellers are drying up and the buyers have taken over.  The

bullish candle overlaps with the body of the previous bearish one and shows

a fresh buying pressure and a start of a bullish reversal, especially if

confirmed by the higher buying volume.

Three White Soliders

Each candle opens higher than the previous open and closes near the high of

the day, showing a steady advance of buying pressure.

This pattern is usually found after a downtrend or in price consolidation (this

means when the price is traveling sideways, without any clear indication

that we are going up or down) It consists of three long green candles that

close progressively higher on each close.

Bearish Reversals

OPENING PRICE | CLOSING PRICE | THE HIGH PRICE | THE LOWE PRICE

Most bearish reversal patterns require bearish confirmation. In other

words, they must be followed by a downside price move which can come

as a long candlestick or a gap down, and be accompanied by low trading

volume. 

For traders shorting the market, bearish candles can be as equally profitable

as bullish ones, for those of us who aren't playing with leverage, red candles

are the LAST thing we want to see...

Bearish reversal patterns should form within an uptrend.

Otherwise, it’s not a bearish pattern, but a continuation pattern.

EXAMPLES OF BEARISH FORMATIONS

Bearish EngulfingThe bearish engulfing is the opposite of the "bullish engulfing" and is a very

important candlestick formation for predicting price trends. It consists of

two bodies, with the left-hand candle being the previous bullish candle, that

is now "Engulfed" by the bearish candle, which has now closed.

The bigger it is, the more bearish the reversal. The red body must totally

engulf the body of the first green candlestick. Ideally, the red body should

engulf the shadows as well.

Shooting StarThe shooting star is made up of one candlestick with a small body, long

upper shadow, and small or nonexistent lower shadow. The size of the upper

shadow should be at least twice the length of the body and the high/low

range should be relatively large. 

The long wick tells us that the sellers are taking over and driving the price

down. Look for this candle at the top of an uptrend to signify that the

buyers are losing control of the bullish trend.

Evening StarThis is a meaningful top pattern and is a three-candlestick pattern

signaling a major top reversal. In short... we're going down captain.

It is made up of a green candlestick followed by a short candlestick, which

forms at the very top of the pattern, which precedes the larger bearish

candle.

This larger bearish candles often closes well into the first candles green

body.

Well Done Trader! You're now officially into the trading game and know the basics of bullish

and bearish candles as well as some of the more popular candle formations

you're likely to see on your path to trading success. 

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