Candlestick analysis is how you’ll gather evidence to support your trading decisions.
This article is to teach you to understand and appreciate the ongoing “story” of the market, and to identify the evidence you need to make effective trading decisions.
Once you understand how to properly interpret candlesticks, you’ll be able to enter and exit the market with pinpoint accuracy, and maximum profits.
This article is organized into 4 main sections:
1. Solitary Candlesticks
We’ll begin by introducing candlesticks that have a significance on their own. These are single candlesticks that convey a particular message about what’s happening right now in the market.
2. Relative Candlesticks
Next, we’ll look at how neighbouring candles can give you a clearer picture of the recent price action. We’ll expand on the concepts covered in the previous section, and apply them across a series of candlesticks. This is where we’ll uncover the story of the market simply by looking at a bare candlestick chart.
Then, we’ll take a look at Anchor candlesticks before moving on to discuss the psychological support/resistance areas inherent in all candlesticks.
3. Reading Price Action
This is where we’ll practice applying everything we’ve learned on a live chart example.
4. Candlestick Trading Principles
Finally, we’ll go through a couple of time-tested principles to enhance the effectiveness of trading with candlesticks.