Candlestick Formation in Price Action
Candlestick Formation in Price Action

Candlestick Formation in Price Action

Deposit.redaksinet.com – How to read the Price movement of the Market using the formation of wax has been applied in the country of origin, Japan, since the 18th century. At that time, the table on which the candle is used to predict the movement of price of rice. When the stock exchange in Japan began operating in 1870, where many candles are used by traders to analyze the ups and downs of a particular stock from time to time.

Famous analysts of the United States, by Charles Dow, in the 1900s participate using candlestick to predict the direction of movement of stock prices, up to the formation of this became popular in the whole world until now.

Basically, the formation of the wax gives the same information with the formation of a regular bar. However, the formation of a chart candlestick clear and accurate in describing the price movement (Price Action).

Visually, the behavior of prices and demand and supply can clearly be understood in the formation of this candle. In the chart of trading, the role of traders who want the price to go up and prices go down with a clear look, and who the winner will appear on the formations will be formed.

The Formation Of Wax Which Often Appear

The basis of the method is the observation and interpretation of the price movement through the establishment of a candle. Because it is already popular, analysts give name or ranks to the formation of specific often occur, such as for example a hammer or Doji. Image formation candles here that often appear on the market and used in the analysis by the method of Price Action:

1. Bullish Candle

Explain the movement of the price increase in a certain period of time. In this case, the number of traders who want a bigger price increases than those who expect the price will go down.

2. Candles So Harish

Describe the decrease in numbers in that period. In this case, the number of traders who want to price drops greater than those who expect a rise in market price.

3. (And The Shade Of The Sprawling) For Ever

This formation is bullish. The length of the tail should be at least equal to the length of the candle body of his. The length of the tail (the shadow), which is valid also the formation of the candle stick to this. Most likely from the bull as a trader that more and more of the traders that supports markdown.

4. A Long Shadow Over The

Formation is bearish. Long shadow above the minimum should be the same with a body length of his candle. Long shadow never formed, valid also the formation of a long upper shadow. This is an opportunity for Ireland’s great because in conditions such as this, traders who want prices to fall more than you look at the decline in prices.

5. Hammer

Candlestick formations indicate the state of the bullish. Hammer valid if it occurs in conditions of Downtred, with a long tail at least 2 times the length of the candle body of his. Because the Hammer does not have a Shadow on top, then the formation of wax that describes the traders who want to improve the price is more enter the market in the last moments of the closing. Read also: the identification of the pattern of the bullish candlestick Hammer.

6. Shooting Star

The opposite of a Hammer, the formation of the candlestick is bearish. Shooting Star valid if it happens in Uptred, with a length of more than 2 times the length of the body of his candle. In the context of the formation of this, the price of a good trader falls more into the market in the final moments of closure. Pattern shooting star candle, how the marker on the contrary.

7. Harami

This is one of the 3 candles confusion, so that nature could not be ascertained. Harami is a reversal pattern that consists of 2 candles. The formation is often considered similar to the stem and the mother, because it is composed like this from the measure of the first large candles and be able to cover the second candle.

The difference, only a Harami which takes into account the body, resulting in the formation of the candle, the shadow of the candle may not be covered with wax first. Read also: get to know the wax pattern, bullish engulfing.

8. Doji

Not like a Harami, candles confusion consists of only 1 format candlestick. A Doji is formed when the market is consolidating or doubt about the direction of the price movement next. The nature of the sentimental and the Irish looked in a balanced state, so that it could not be ascertained whether the price is or falls after the candle is formed.

Traders usually use konfirmator other to read the signal Doji, whether by looking at the candle after the Doji, other technical indicators, or the position of the price to support the resistance. Read also: formation of a Doji Candlestick.

9. Dragonfly Doji

Similar to the Doji, bullish when the condition occurs in Balwahtred. Compared with the main estimates of the formation of wax Harish rare, and can show the strength of the seller who failed to withdraw the price to continue to fall.

Leave a Reply

Your email address will not be published.