Candlesticks

Candlestick charts are a powerful tool for traders to visualize market trends. They
provide a clear and easy-to-read representation of price movements, including the
opening price, closing price, highest price, and lowest price. With this
information, traders can better understand the market and make informed decisions.
In this article, we will explore how to read candlestick charts and how to use them
to start trading crypto based on market trends.

Candlestick Essentials

Candlesticks are the most popular way to present data from technical analysis.

The body of a candlestick represents the opening and closing prices.

The top wick, or shadow, of a candlestick represents the highest price. The bottom
one represents the lowest price.

In line with market trends, candlesticks can be either bullish or bearish.

Bullish candlesticks are commonly green or white. Their opening price is lower than
their closing price.

Bearish candlesticks are commonly red or black. Their opening price is higher than
their closing price.

Candlesticks can take one of several frequently-encountered shapes, referred to as

the doji, hammer, hanging man, inverted hammer and shooting star.
The anatomy of a candlestick

Candlesticks are a popular way of visually presenting technical analysis data for
traders. However, to effectively read candlestick charts, traders must first
understand the different components that make up a candlestick.

One of the first features that catches the eye is the color coding, with green or
white candlesticks indicating a bullish trend characterized by purchases, while red
or black candlesticks signify a bearish trend dominated by sales. However,
candlesticks should always be read in the context of other chart data and not in
isolation. The size of the candlestick's body also represents buying or selling
pressure, with a longer body indicating greater pressure.

Nonetheless, it is crucial to examine highly bullish and bearish candlesticks

within a broader context.