Question
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How to analyze the candlesticks smartly?
3 Answers
<p>More number green or red candlesticks in a row indicates a clear trend in a stock. For example , if there is a presence of 3 or more green candlestick in a row , it shows the stock is in immediate uptrend. In the same way, if the stock makes 3 or more red candlestick in a row , it indicates immediate downtrend and the subsequent bearish momentum in the stock.</p>
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<p>Candlesticks are created by up and down movements in the price. While these price movements sometimes appear random, at other times they form patterns that traders use for analysis or trading purposes. There are many candlestick patterns. Patterns are separated into bullish and bearish. Bullish patterns indicate that the price is likely to rise, while bearish patterns indicate that the price is likely to fall. No pattern works all the time, as candlestick patterns represent tendencies in price movement, not guarantees.</p>
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<p><br>The candlesticks show price movements over the last several days, quarters and so on. My Trade Logic states that technical analysis is very effective in analyzing future price changes. Also, it depends on three assumptions: pricing discounts, price movement in trends and technical analysis. Traders can make informed trading judgments from here on. The truth is chart analysis give rise to a slew of trading indications and strategies.</p>
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