After much thought, I decided to share my trading insights from starting with 50,000 to making 53,980,000 in just two years in the cryptocurrency market!

If you are currently at a loss and want to make trading cryptocurrencies your second job in the future, please watch carefully until the end; you will definitely gain something, and I recommend saving it!

I went from huge losses to financial freedom, achieving a 2000 square meter villa and a Land Rover + a small Rolls Royce in Shanghai! [Be sure to check the comment section]

I tell you from ten years of experience, if you don't understand 'candlestick nature (K-line)', don't enter the market! Otherwise, you will definitely lose! (With illustrations)

If time could be turned back, back to when I first stepped into the trading market

I wish someone had reminded me of the importance of candlesticks, telling me this is the foundation of trading

Then I wouldn't pursue a winning strategy and waste time chasing different technical indicators' parameters

This way I won't take so many unnecessary detours

If you want to profit in the market, especially in the cryptocurrency sector

You may not know some profound economic theories, you may not understand the indicators behind each economic data, and you can ignore all technical indicators

Completely unnecessary

But there is one thing you must understand thoroughly, and that is candlesticks (K-line)

If you are just starting to learn trading, you may find candlesticks complicated and completely incomprehensible

But don't worry, this is not as complicated as it seems

I will use a very simple and clear method in this article to help you gradually understand this matter step by step

If you like this article, remember to give me a thumbs up at the bottom

Your support is my motivation!

In a chart, nothing is more important than price

And candlesticks present the price fluctuations within a specific time, the result of the bull and bear confrontation, how the market thinks about direction, which side has control, etc.


All of the above can find some clues through candlesticks, which are the threshold for entering technical analysis

If we understand the meanings behind each candlestick, no matter which type of technical analysis you personally prefer, you can achieve results with half the effort.

Next, I will lead everyone to interpret candlesticks in three levels

First, I will break down the candlestick into 4 parts

To interpret its surface information

Then I will summarize candlesticks into 5 different levels of strength

To interpret the implications behind candlesticks

In the end, I will introduce you to 4 of the most common candlestick patterns

How to define them,

Their meanings and application methods


After watching, you will understand how to find a lot of helpful information for your market analysis through candlesticks

At the same time, you will also understand why I say candlesticks are the foundation of profit in the market


Let's get started!

Here I will teach everyone how to interpret the information that a candlestick brings on the surface

When breaking down a candlestick

Can be divided into 4 key points

Respectively: color, opening and closing high and low, body, and shadow

Before discussing the 4 key points, we first need to know one thing

Each candlestick represents the price fluctuation within a certain time period

If you are using a one-minute chart

Each candlestick records the price fluctuation within that minute

If you are using a daily chart

Each candlestick records the price fluctuation within the past 24 hours


The color is the method we use to determine whether this candlestick is bullish or bearish

Generally speaking, red represents a bearish candle

And green represents a bullish candle


A bullish candle means that the closing price is higher than the opening price during a specific period

And the bearish candle is the opposite

When the bearish candle ends

Closing price lower than opening price


So we can know one thing through the color of the candlestick

It's whether the temporary control in the market is in the hands of buyers or sellers

Next is the opening and closing high and low


I believe you have already mastered these basic concepts

This matter is very simple

We each use bearish and bullish candlesticks as examples

The bullish candle opens high and closes low

Like I just said

Its closing price is above the opening price


The bearish candle opens high and closes low

Opposite to the bullish candle

Its closing price is lower than the opening price


Next, let's talk about the body line

The body means the actual price movement range within a specific time

Using a daily candlestick as an example

For example, its opening price this morning was 10 yuan

After a day of repeated trading

No matter if it once rose by 15 yuan

Or it once fell by 7 yuan

This position will only record the price at the moment when the candlestick ends

Its price is whatever it is


Finally, the shadow

The shadow represents the highs and lows the price has reached

A lot of important information can be seen from the shadow

I personally think the shadow is a very important part of interpreting the market

I'll leave it at that for now

In the last part, I will use the candlestick patterns (K-line patterns)

Explain it to you more clearly


Next

We start to delve a bit deeper


If we use watching a movie as a metaphor

When you finish appreciating a play

You understand the development of the story plot,

The information the movie superficially conveys to you

Will you think more deeply about this movie?

It wants to convey deeper meanings and information

Will you have some insights and personal interpretations?

If this concept is applied to the market

Each candlestick represents a story

This story varies in length

Short can be less than a minute

And long ones can last over a month

Depends on what time frame you are using

Every story has a beginning, process, and end

On the surface, this daily candlestick tells you:

My opening price was 10 yuan, within 24 hours it peaked at 18 yuan. The lowest point was 7 yuan, and my closing price was 13 yuan.

These are the plots of a story

If we delve deeper into interpreting and reflecting on this story

You will have many surprising discoveries

And these findings can effectively help you interpret the market


Next, we are about to enter [The Secrets Behind Candlesticks]

I will use several examples according to the strength level

Explained in more detail for you

The secrets behind different types of candlesticks


Here I will summarize candlesticks into 5 levels of strength

First type

A long body

And has almost no shadow

It's one of the strongest candlestick patterns

The body represents that one side almost completely has control


Taking this bullish candle as an example

Buyers are willing

And has the ability to push prices up within a specific time

On the other hand

The shadow part is almost invisible

Represents no or very weak opposing strength

We see that upward or downward strength is almost unimpeded

It represents that most participants in the market agree that the price is going in this direction

Second type

We see that this type of candlestick has a long shadow

It once was a very large bullish or bearish candle

But once faced with strong opposing pressure

The defending side shows strong determination and power

In the end, they all successfully reclaimed the lost ground

Still holding control at the end of the candlestick

Although its body is relatively short

But if we think a bit deeper

You will understand

It doesn't walk a distance shorter than the first type of candlestick

The candlestick of this pattern is called a shooting star or hammer candlestick

We will look at some chart examples together later

OK

When we get to the third type of candlestick

This type of candlestick body is actually not considered short

But there is one place that greatly diminishes our impression of it

This place is the shadow

Let's take the bullish candle as an example

The price once surged to a high point

But faced with increasing opposing strength

We see

The top of this bullish candle has a shadow

The shadow represents rejection

That is, the selling side recovers part of the lost ground

Compared to the first two types that are resolute

Here we see hesitation and reservation

Fourth type

This type of candlestick

It is not only short in body

And each has a long wick above and below

Represents that both sides have launched attacks

But both sides are unyielding

Neither side has enough strength to break this deadlock for the time being

The only thing we can judge with color is that buyers or sellers still have a small portion of control

People might feel that this type of candlestick is very similar to the second type

But because they end at different places

So the whole meaning is completely different

Another main reason is that the shadow shows that the market temporarily has no clear direction

We call this candlestick pattern a doji star

It could be a pause in the trend

Or the market is accumulating strength for a trend reversal

Generally, when the market is in a directionless situation

We should not enter the market

Fifth type

Next, we come to the weakest candlestick

We see that buyers or sellers have launched attacks either upward or downward

Faced with strong resistance and rejection

Ultimately ended in failure

Once seemed to have the whole world

But unfortunately counterattacked by the opponent

And also retreat step by step

At the end of the candlestick

Can only guard the last remaining territory

The situation is quite dangerous

If you are trading in the trend at this moment

Then you really need to be careful


Seeing this

I believe you already have a considerable understanding of candlesticks

We have finally arrived at the most important part

This is the third level of [K-line patterns]


We have discussed the 4 parts that make up a candlestick

And the meanings behind the 5 different types of candlesticks

Next, we will base our learning on the knowledge just acquired

Learn some quantifiable methods

Candlestick patterns that can truly be used for trading


I will teach everyone the 4 most common candlestick patterns (K-line patterns)

I will use chart examples to explain their definitions

The principles and application methods formed

They are respectively

Hammer candlestick

Bullish engulfing

Shooting star

Bearish engulfing

Hammer candlestick

We will first start with the hammer candlestick

Hammer candlestick is composed of a single candlestick

There are three conditions

Respectively very small or almost no upper shadow

The lower shadow must be at least 2-3 times the body

The price must end above 25% of the entire candlestick

This pattern means:

When the candlestick begins

The selling side launched an attack and moved down a distance

Then the buying side launched a counterattack

Even the strength of buyers is stronger

Until the candlestick completely ends

The buying side successfully recovers most of the lost ground

Also seized control

This pattern is a very favorable proof

Buyers begin to participate in the market

This is a bullish candlestick pattern

Generally used in trend continuation and trend reversal situations


Here is a fallacy:

Many online courses say this is merely a trend reversal pattern

Actually, their descriptions are still a bit incorrect


Let's take a look at the following two examples

First example of trend continuation

When we see an upward trend

Immediately followed by a hammer candlestick pattern during the retracement

If we use price to define a trend applied to this example

This is a higher point

This is a relatively low point

We see an inverted hammer candlestick at the relatively low point

Then we can expect the trend to continue

Make a new higher point

Second example: Trend reversal

When a downward trend reaches a certain level

A reversed hammer candlestick pattern appears

Indicates the strength of buyers is starting to emerge and gain control

Price starts a new trend

Bullish engulfing

The second example is bullish engulfing

Bullish engulfing is a bullish candlestick pattern composed of two candlesticks

We use three conditions to define

Is a bullish engulfing effective or not


Respectively are

First: This pattern must have a bearish candle immediately followed by a bullish candle

Second: The body of the bullish candle must completely cover the body of the previous bearish candle

The shadow here can be ignored

Third: The body of the bullish candle cannot be smaller than that of the bearish candle

Candlesticks that are too small will be defined as doji stars

Not bullish engulfing

This pattern means that when the price drops to a certain position

A stronger opposing force appears

While gaining control

Closing price higher than the previous opening price

Proves that the market sentiment has changed

This is a bullish candlestick pattern

Also applies to trend continuation and trend reversal situations

Let's take a look at the following two application examples

First example

In the case of trend continuation

When we see an upward trend

Immediately followed by a bullish engulfing pattern at the retracement position

This is a very good signal

Proves that the temporary reversal has ended

The buying side officially returns to reclaim the home ground

Price continues to rise

Second example: Trend reversal

In a downward trend that reaches a certain level

A bullish breakout pattern appears

The buying side finds an opportunity to enter the market

Even stronger than the selling side

To reverse the price

Shooting star

Next, we will learn about two bearish candlestick patterns

Shooting star is actually similar to the hammer candlestick just now

It's just that the direction has changed

The shooting star is a bearish pattern formed by a single candlestick

An effective shooting star

Also has three conditions

Respectively very small or almost no lower shadow

The upper shadow must be at least 2-3 times the body

The price must end below 25% of the entire candlestick

The name of this shooting star pattern

Actually, it already reflects its meaning

Shoot arrows into the sky

Once reached a very high point

Exhausted and stopped

Slowly retreating

Forming a long shadow

This pattern also applies to trends continuing and trend reversals

Everyone can refer to the example of the hammer candlestick from earlier

Reversing all patterns can be applied to the shooting star

I won't repeat the examples here

But

I want to mention another popular usage

It's the combination of shooting star and moving averages

I used a 200 EMA as an example

Moving averages are essentially the market's balance point

The most fatal mistake most of us make with moving averages

It's like trading signals like golden crosses and dead crosses

Because it completely ignores the price and the balance point

That is, the interaction between moving averages

The correct use of EMA should be like this

Price approaches the EMA

Once attempted to surge upward

We know that moving averages are actually a form of dynamic support and resistance

In other words

That is to say, the price tells you through a shooting star:

I once wanted to break this moving average, wanting to change the long-term trend, but failed, and I had no extra strength to continue upward

So the price returns to its original trend

Continue downward

Bearish engulfing

The last example is bearish engulfing

Bearish engulfing is a bearish candlestick pattern composed of two candlesticks

Similarly, I will use three conditions to define

First: This pattern must have a bullish candle immediately followed by a bearish candle

Second: The body of this bearish candle must completely cover the body of the previous bullish candle

Third: The body cannot be too small

This pattern means that after the price rises to a certain position

Suddenly a stronger opposing force appears

Like a car suddenly braking

Then immediately turn around and leave

This pattern also applies to examples of trend continuation and trend reversal

Like the bullish engulfing just now

Reversing it is

I won't repeat it here

I will combine major support and resistance levels with bearish engulfing

Make a trading example

If you don't know what the main support and resistance levels are

Unsure how to distinguish and find the main support and resistance levels

You can check out the articles I've written before

We see here

This is a major support and resistance level

I won't explain it in detail anymore

But at this position in conjunction with bearish engulfing or similar candlestick patterns

Its win rate is very high

We see that the price goes to the main support and resistance level

The next body immediately shows strength in the opposite direction

And this strength is stronger than the selling side

Finally forming a bearish engulfing pattern

Completely met the conditions we defined for this pattern to be effective

After a bullish candle

Immediately followed by a bearish candle

The body of the bearish candle

Completely covers the body of the bullish candle

And the bodies also have enough length

Prove its determination to change the trend

The price should naturally go down

So regarding the candlestick course

That's all we will cover today

I have said

The trading market is the fastest way to monetize skills

As long as you have mastered the technique

Can quickly be monetized

No need for marketing

No need to rent a house

No need to stock up

No need to hold events

No need to hire people

......

Even a computer doesn't need to be bought

Then you can quietly make a fortune

The kind that has no upper limit

But making money has never been that easy

If you just learned a little

Just rush in

Then it can only be a loss of both money and resources

Trading is not gambling!

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