20/02/2021 How to Study Candlestick - Trading with Smart Money

Price Action
How to Study Candlestick
 How to Study
Candlestick
Back to: Trading with Smart Money
 Candlestick Analysis 
 Price Action Analysis
 Advanced Price Action How to Study Candlestick in Trading
Analysis
 Thrust Pullback and In this article, I am going to discuss How to Study Candlestick in Trading. As part of this article, we
Measuring Move Analysis are going to discuss the following three important pointers in detail which are related to Candlestick in
 How to Trade with Smart Trading.
Money
1. What is a candlestick?
 Supply and Demand
2. How to Study Candlestick?
Zone Trading
3. The 6 principles for analyzing candlestick
 How to Day Trade with
Trend What is a candlestick?
 Multiple Time Frame
Analysis The candlesticks are the reflections of what buyers and sellers are doing. What extent they move the
 Head and Shoulder price and the strength behind the move. CANDLES TELL YOU who is in control but do not tell you
Pattern about the strength of buyer or sellers behind the move, candle with volume shows that

 How to Trade with

Support and Resistance
 Advanced Candlestick
Analysis
 Trendline Trading
Strategy
 WRB Trading Strategy

Day Trading Strategies

 VWAP Trading Strategy
 Gap Trading Strategy 
 Intraday Open High Open
Low Trading Strategy The Open:
 PIN BAR Trading Strategy
 Trading with Sideways Open price tells us where the balance between buyers and sellers at the opening of that period, the opening
Price Action Area value is the first trade of the day. After the traders have time to review the markets overnight, the open
represents the desired position of investors to begin the day. The change from the previous close to the open
 Pullback Trading Strategy
is a reflection of new sentiments. Also, institutions looking to accumulate (or distribute) a position often place
 Intraday Breakout Trading orders at the open because the open trade is often the largest, most liquid trade of the day. In this way, the
Strategy open might be one of the best times to accumulate/ distribute a large volume of stock while minimizing the
impact on the stock’s price.
Risk Management
 3 Techniques for Risk
The High:
Management in Trading

The high is the highest point the stock traded during the session. The high is the furthest point the bulls were
Stock Selection & Live
able to push the stock higher before sellers regained control to push the stock back down. The high
Scanner
represents a stronghold for sellers and a resistance area to buyers. There is one exception when the stock
 How to make own Day closes on the high, it did not encounter any real resistance from the sellers. The buyers just ran out of time.
Trading Scanner
 Stock Selection for The Low:
Intraday Trading
The low is the lowest point the stock traded during the session. The low is the furthest point the bears were
Intraday Trading Course able to force down the stock before buyers regained control to push the stock up. The low represents an
2020 area where enough demand existed to prevent the price from moving lower. The exception is when the
 Intraday Trading Course

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 Multiple Timeframe security closes on the low. When the stock closes on the low, it did not encounter buying support. Rather, the
Analysis for Intraday bulls were saved by the closing bell of the session.

Trading 
 VWAP Trading The Close:
 Opening Range Trading
Close price tells us where the balance point was at the end of the period. The close is the last price agreed
Strategy
between buyers and sellers ending the trading session. The close is the market’s final evaluation. A lot can
 Opening Range Breakout happen between one close to the next close. The close represents investors’ sentiments and convictions of
investors at the end of the day. It is the position investors desire to hold after-hours when investors are
Volume Price Action
unable to trade with liquidity until the next session opens. The closing price is the first (and oftentimes, the
Analysis only) price the majority of investors desire to know.
 Volume Analysis in
Trading
The Change:
 Volume Price Action
Analysis The change is the difference between close to close. The difference in the closing value one day versus the
 Volume Spread closing value the next day. When this difference is positive, it tells us that demand is outweighing supply.
Analysis in Trading When this difference is negative, it tells us that supply is increasing beyond demand. The change is perhaps
 Candlestick Pattern the most sought after piece of financial data on the planet.
Analysis
 Finding Entry The Range:
Opportunity using
The range is the spread of values within which the stock traded throughout the day. The range spans
Volume Spread Analysis
between the bar’s highest point and the same bar’s lowest point. It is measured from the top of the bar,
 Spring and Upthrust where resistance set into low, where support came in. The size of the range gives us important information
Trading Strategy about how easily demand can move the s took up or supply force the price down. The wider the range,
 VSA Trading Strategy typically, the easier it is for the forces of supply and demand to move the stock price.

Option Chain Analysis

Bullish CANDLESTICK
 Option Chain Analysis
This is nothing but when CURRENT CANDLE close is ABOVE the previous candle close.
Indicator 
 RSI Trading Strategy

BTST 
 BTST Trading Strategy

TECHNICAL ANALYSIS
MASTERCLASS
 Technical Analysis
 Market Structure 
 Understanding Market
Structure through Swing 
 Supply and Demand Bearish CANDLESTICK
Trading
When CURRENT close is BELOW the previous candle close

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With the proper understanding of CANDLESTICK, you can predict what about to happen in the near future

#Pro tips, we (retailers) can’t move the market so every candle shows what smart money trying to shows.
So their move trap or genuine is only validated by volume
#Pro tips, CANDLESTICK shows half information, another half information shows by volume

Example

WHAT IS TELLING US?

SENIMATE= BULLISH, 2 consecutive higher close candle. Let’s add volume to this candle

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2nd candle range smaller than 1st candle

2nd candle volume greater than 1st candle
Think why volume is greater than 1st candle?

Let me explain to you

NARROW SPREAD CANDLE WITH HIGH VOLUME. Two possible explanations

If the volume had represented buying, how can the spread be narrow?

Either the professional money is selling into the buying, possible reversal on near future
There is a trading range to the left and the professional money is prepared to absorb the selling
from traders locked into this old trading range. I mean break out may happen

Let’s understand with chart

If the next bar is down closing near its lows this confirms the professional selling

Low volume down candle close middle or top, it shows that smart money testing supply and no more
supply available 2nd candle was buyer’s volume if the next candle closes above the current candle

6 PRINCIPLE FOR CANDLESTICK ANALYSIS IN TRADING

Principle Number One: The length of any wick, either to the top or bottom of the candle is ALWAYS
the first point of focus because it instantly shows, strength, weakness, and indecision, and most
important where SMART-MONEY enter

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Principle Number Two: If no wick is created, then this signals strong market sentiment in the
direction of the closing price. SMART-MONEY active there

Principle Number Three: A wide-body represents strong market sentiment and a narrow body
present week market sentiment Narrow body with the heavy volume either Smart Money observing for
continuous of move or Smart Money enter on the opposite direction

Principle Number Four: A candle of the same type will have a completely different meaning
depending on where it appears in a price trend. Start of trend or middle of the trend or end of the trend
or at support or resistance or in the consolidation phase. Candlestick should analyze the context of
the move. You should never try and read the market looking at one day’s action in isolation. Always
read the market phase-by-phase and then read the latest day’s action into the phase

Principle Number Five: Volume validates price. First, see what CANDLESTICK is telling then
validated by volume, is It validating or not with the CANDLESTICK price action

Principle Number SIX: When a particular timeframe DON’T make sense then move to the next
higher time frame for the big picture or lower timeframe for the microstructure of move

What next?

In the next article, I am going to discuss the Price Action Analysis in detail. Here, in this article, I try
to give a brief introduction to candlestick and I hope you enjoy this article.

Here, in this article, I try to explain How to Study Candlestick in Trading. I hope you enjoy this How
to Study Candlestick in Trading article. Please join my Telegram Channel to learn more and clear
your doubts. https://t.me/tradingwithsmartmoney.

← Back to Course Next Lesson →

Trading with Smart Money Candlestick Analysis

12 thoughts on “How to Study Candlestick”

ADARSH
FEBRUARY 2, 2020 AT 1:06 AM

What is professional selling?

Reply

TRADING WITH SMART MONWY

FEBRUARY 8, 2020 AT 6:17 PM

At market top when retailers buying , professional selling to retailers.exaample Retailers buying for
breakout of previous high professional simple selling and false break out at top forming M pattern, just an
example of M pattern

Reply

SALAMI
FEBRUARY 7, 2020 AT 10:40 AM

Great articles…. How to ask doubts on Telegram???

Reply

TRADING WITH SMART MONEY

FEBRUARY 8, 2020 AT 6:13 PM

https://dotnettutorials.net/lesson/how-to-study-candlestick/ 5/7
20/02/2021 How to Study Candlestick - Trading with Smart Money

https://t.me/tradingwithsmartmoney

Reply

SALAMI
FEBRUARY 8, 2020 AT 8:04 PM

no option to comment on telegram. then how to ask ?

Reply

S. B. KUMAR
APRIL 19, 2020 AT 10:15 PM

Please send me the basic to advance study material on trading technicals and training

Reply

EMMANUEL OLADUNNI
MARCH 22, 2020 AT 10:01 PM

Thanks for the article, i would like to ask a question: for a narrow body candle with higher volume compared
with prior candle, if smart money is not active, what could have been responsible for higher volume and can
volume be used in forex?

Reply

MONIKA
SEPTEMBER 8, 2020 AT 10:54 AM

One reason for higher volume can also be due to position unwinding.

Reply

SONA BHAVANI
APRIL 21, 2020 AT 3:04 PM

You mention that we can ask doubts on Telegram channel. I have joined your telegram channel. However it
seems to allow you to broadcast message to entire group only and members cannot reply back or ask
anything. Please Let us know if there is any other way to reach out to you.

Reply

ABHISEKH
APRIL 24, 2020 AT 11:22 AM

i have no words to explain how useful knowledgeable article this one

thanks a lots guru ji
i want to chat talk with u either phone or any social networking site with.
please accept my request .

Thanks & Regards

Abhisekh
8828238395
9838976758

Reply

THEMBA
APRIL 26, 2020 AT 7:09 PM

Thanks a Lot

Reply

SATISH JAGDHANE
OCTOBER 18, 2020 AT 5:22 PM

https://dotnettutorials.net/lesson/how-to-study-candlestick/ 6/7
20/02/2021 How to Study Candlestick - Trading with Smart Money

great article with solid depth pf knowledge

Reply

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