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The following image depicts how a candlestick is to be interpreted:Īll candlesticks come in two colors: green and red (though most charting services will allow customized colors). Still, the more one studies them, the more information these will offer when compared to simple line charts. As time progresses, multiple candlesticks create larger patterns that crypto traders derive signals from to make vital trading decisions.Īt first, candlesticks may be a little difficult to understand. With candlesticks, you can get clues and insights from the price action as well as the general mood of the market for that asset. Candlesticks derive their name from the long lines (wicks) and rectangular shapes they employ to denote price action within a specified timeframe. Traders use candlestick charts to represent an asset’s price evolution. “High and Low,” on the other hand, are the highest and lowest prices the asset achieved during the course of the trading session. When trading, an asset’s price at the beginning of the trading period is the “Open,” while the “close” shows the price at the end of the trading period. Candlesticks have four major components: the high, low, open, and close. Each candlestick can be set to represent any period of time – from a single minute to an entire month. Traders can choose the periods they want to examine based on whether they are making low or high timeframe decisions. What is a Candlestick?Ī candlestick denotes an asset’s price activity during a specified period. This system has been utilized and updated over the years and is now one of the best methods of charting assets. Over time, it has evolved considerably and has become a vital tool for most traders. As a cryptocurrency and Bitcoin trader, there are some candlestick patterns you should definitely know.Ĭandlesticks can be traced back to Japanese rice traders. As time progresses, multiple candlesticks create larger patterns that crypto traders derive signals from to make vital trading decisions.Ĭrypto traders prefer candlestick charts because of how easy it is to understand and its visual appeal.If a candle changes to green, the price of the asset increased and closed above its opening price. A red candle shows that the closing price was below the opening price.What is a candlestick pattern: A candlestick denotes an asset’s price activity during a specified period.What are the Bearish candlestick patterns?.What are the Bullish candlestick patterns?.Important Candlestick Patterns You Should Know.
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