One way to analyze a technical basis is to read a candlestick chart.
According to technical analysis, from data provided candlestick that has
developed, we can predict what the next candle is formed. Whether
candle Candle up or down. So if we have an idea of what will be the
candle is formed, we can take a decision as to whether buy or sell
. So, here's how to read a candlestick chart:
In psikology, candle formed due to pressure sales and impulse
purchases. The magnitude of the difference kenanan and encouragement
which then causes the form candlestik are different from each other.
Candlestick formation chronology:
The magnitude of the impulse to buy can be measured from the movement of the market from Low to Close. The greater the motivation, then the greater the body candle formed. So the magnitude of the Green candle body shows the dominance of the
buyer. – When many traders who make sales market, the price of getting down, so at the end of the period's closing market value usually below the opening price. This is the condition which causes the candle that is formed is red (down)
On the candle Down (red) High measured from the seller pressure up Close. The greater the pressure sales, then the prices will fall and more and more and form a long red candle body. So the magnitude of this red candle body shows the magnitude of the dominance of the seller
To determine the direction of the next candle, there are some that should be noticed :
1. resistance
2. Acceleration of motion
3. Slowing the rate of
4. The turning direction of the experiment
5. Convergent
1. RESISTANCE
RESISTANCE is when one party dominated the market then
the candle will move along. For example, when Buyers dominated the
market then the candle will continue to line up. As long as there is no
resistance from the seller (no sales means) candle formed following the
direction of the previous candle. Until one day some traders felt the price was too high or already too saturated, then emerged as the sales action shape is the resistance of the seller. One of the reasons is the action of profit taking.
Forms of resistance shown by the tail of the candle. When the resistance is greater than dominance, then the next party who did win and that resistance would occur the turn of market dominance, so that the trend will reverse direction. From here we can predict that the next candle will reverse direction as well.
2. ACCELERATION of the Body
a CANDLESTICK candle of candle earlier showed an enthusiasm. Then when many traders who berantusias the opening position, this will result in an effort to drive the market so in line with the kind of enthusiastic about it. Moreover, there is no opposition, then we can predict the candle which is formed in line with the candle wax.
3. CANDLESTICK DECELERATION
the opposite of enthusiastic, the trader opens a position to doubts menyebabkanmarket the move to slow down. Doubt this comes as traders assess market is already too high, too low, saturated conditions or market zone support & resistance. In the absence of the trader opens a position, then there is no power to drive the market.
In these conditions we should be ready to reverse the direction of the open position is ready, because the market will be taken over by one of the parties.
4. REVERSE of the DIRECTION
EXPERIMENT CANDLESTICK On the saturated market position there will be a party that tries to end a trend going on, who want to reverse the direction of a trend right. But sometimes the effort begins with a test condition, i.e. testing whether the market could really behind point or not. It is characterized by the long tail of the candle the opposite to the direction of the trend is going on.
Chronology is before the period ended as will form the opposite direction with candle candle before. Towards the end of the period the candle was withdrawn and closed into in line with the previous candle
. The existence of the experiment back this direction indicated will occur behind the direction. So in this case we can prepare ready open positions that go against the trend.
5. CONVERGENT CANDLESTICK
Slowing CONVERGING CANDLESTICK body candle and a resistance (number 2) showed that the majority of traders expect the market's turning direction. But when it suddenly appeared a candle which showed enthusiasm remains in line with the trend is happening (moner 3), it's questionable.
Can be likened to when everybody wants one thing, but there is one people want different things, then of his energies, the energy of one person is actually small and virtually empty, so it is very easy to
is defeated. Convergent condition this candle can also happen because there are certain parties who want to get the best price, although already know the market will reverse direction, but still pulled it into a higher or lower it once was to get a better price, then the market reversed point.
In these conditions, we see other indicators, if other States converging indicators as well, then we can open a position contrary to the trends that happen.
