Well, today in this article. I am going to share with you the easiest way on How To Read Candlestick Chart or How to Read Candlestick for Day Trading in Olymp Trade
I bet no one is ever going to share with you this easy trick for Candlestick Chart Reading
Candlestick is a graphical representation of the price movement of stocks, commodities, & more.
The Candlestick Chart helps us to predict the market whether the Buyers or sellers are dominating the market.
The chart is said to be developed by Munehisa Homma, a Japanese Rice Trader.
He developed this chart to predict the price movement of rice.
However, the chart was introduced in the western world by Steve Nison, when he wrote a book name the Japanese Candlestick Charting Technique.
How to understand Candlestick Chart?
Here, To illustrate Candlestick. I am going to use Olymp Trade.
You can also sign up via the form given below.
Once you have signed up. you will land on the Olymp Trade dashboard.
Firstly, click on the chart icon
Secondly, select Japanese Candlestick from the menu.
That’s it!! your dashboard will look something like given above.
How to Read Candlestick Chart?
Reading Candlestick Chart is very easy. There are basically two types of Candles:
1. Bullish Candle: Bullish candlestick is the candle that is dominated by buyers.
2. Bearish Candle: Bullish candlestick is the candle that is dominated by sellers.
Now, coming to How to Understand CandleStick Chart, The Basic Funda of Candlestick says:
If the opening price is greater than the closing price then a bearish Candle is formed
Similarly, If the Closing price is greater than the Opening Price then a bullish Candle is formed.
In Case You don’t know:
Opening Price is the price of a Commodity or stock when the market is opened.
Similarly, the Closing Price is the price of a commodity or stock when the market is closed.
To understand this concept more clearly, let me tell you an example,
Suppose, The price of Rice when you open the shop is 25 Rs per kg which is more than yesterday’s price which was 17 Rs per Kg.
Now, If you are an intelligent seller you will get excited and try to SELL more and more, and thus How a Bearish Candle will be formed.
Similarly, Suppose, The price of Rice when you open the shop is 20 Rs per kg, and the next day the price drops down to Rs 16 per Kg.
Now, If you are an intelligent Buyer you will get excited and try to BUY more and more. and thus How a Green Candle will be formed.
How to study candlestick chart?
Now, In this section, I will teach you the easiest way on How to Read Candlestick Chart or How to Study Candlestick Chart?
I bet no one will ever teach you this easy trick.
To be honest there is only Two basic candlestick patterns that appear:
1. Small Wick with Long Body Candlestick
(Sorry for spelling error of wick)
This is the most ideal Candlestick form also known as White soldiers.
According, to the golden rule of Candlestick The longer the body, more is the clarity.
Suppose, we see a continuous Small Wick with Long Body Candlestick then we can easily say that market is Bullish.
2. Small Wick with Small Body Candlestick
(Sorry for spelling error of wick)
When we see this type of Candlestick It usually suggests confusion in the market.
This type of candlestick usually depicts the end of the trend.
3. Long Wick Small Body
Again, When we see this type of Candlestick It usually suggests confusion in the market.
Suppose, we are seeing Continous Bullish Candlestick and suddenly, a Bullish or Bearish Hanging Man appears then we can assume that market trend can change.
So, this is the end of this article. I hope you have found this article helpful.
I hope you must have understood the concept if you have any problem. You can ask me at [email protected]