KNOWING CANDLESTICK, WHAT ARE THE FUNCTIONS?

Candlestick charts are used by traders to determine possible price movement based on past patterns. As a trader, you may already be familiar with candlesticks. This is one way that many traders use to see various kinds of data about assets.

In one candlestick itself, it does save a lot of ornaments. Starting from the opening price, closing price, current price, lowest price, highest price, and others.

Getting to Know Candlestick, What Is It？

Candlestick patterns play a key role in quantitative trading strategies owing to the simple pattern formation and ease of reading the same. Even though many are familiar with candlesticks, maybe not many people know about the meaning of the candlestick itself. In short, a candlestick is a chart used in technical analysis to show price.

Candlestick itself is one of the commonly used ways to view and predict asset prices. Apart from using forex trading signals , using candlesticks is also a fairly easy way of analysis.

Main Components of Candlesticks

A candlestick is composed of three parts; the upper shadow, lower shadow and body. The body is colored green or red. Each candlestick represents a segmented period of time. Actually there are several ways that can be used to see the price movement of an asset. Several other forms also still use a graphical system as a form of visualization, for example like lines or bars.

However, the use of candlesticks is considered easier to read. This cannot be separated from the large amount of data in one candlestick. At least, a candlestick is built by two main components, namely:

1. Body

The first main component is the body. This is a component whose shape is thicker than the other shapes. The candlestick body itself will contain information about the opening and closing prices at a certain time range.

The shape of the candlestick body itself can be rectangular, the height of this body will depend on how far the price of the asset changes from the opening price to the closing price.

In a chart, you will see a candlestick body with two different colors. Each color will indicate whether the price is rising or falling.

2. Tail

Besides having a body, candlesticks also have a tail that will be above or below the body. The tail section itself will show the highest and lowest price of the asset within a certain time frame.

The tail at the top of the body will show the highest price of the asset at a certain time. Conversely, the tail at the bottom will show the lowest price ever formed.

The length of the tail will also show how the price of the asset is moving. Whether an asset is moving slowly or fast can also indicate how often it is traded.

Why Should You Know Candlestick？

Candlestick is one way to do price analysis. By knowing the candlestick, you can do this analysis problem easily. Here are some reasons why you should understand candlesticks

1. Projected Movement of Assets

Candlesticks are the easiest way to see asset movements. By understanding this, you can easily predict the movement of assets in the future.

2. Technical Analysis

The use of candlesticks is a component of technical analysis. This method can be done because the candlestick contains a lot of information about the movement of the asset value.

Understand Candlestick Starting Now？

Analysis is one thing you can't do if you want to profit from forex. Each of these analyzes will make all the steps you take have a solid foundation. This analysis process can also make you avoid execution steps that only follow the trend. This is one way to avoid losses

The best way you can do this analysis is to use a candlestick. this is the reason why you need to know candlesticks very well.