Analyzing candlestick charts to predict market trends and making money based on them is a common investment method used by many novices and fools. A candlestick chart is a chart that shows the opening, closing, highest and lowest prices of an asset over a specific period of time. This chart is named because its shape is similar to a candlestick (called "罫线" or "K线" in Japanese).
The following are the basic concepts of technical analysis using candlestick charts learned through Ask AI:
1. Trend Identification: By observing consecutive candlestick patterns, traders can identify whether the market is trending upward, downward, or sideways.
2. Reversal signals: Certain specific candlestick patterns, such as hammers, shooting stars, engulfing patterns, etc., may indicate a reversal of the trend.
3. Continuation Signals: Other patterns, such as bullish or bearish flags, triangles, etc., may indicate the continuation of the current trend.
4. Support and Resistance: Price levels on the candlestick chart can help traders identify potential support and resistance areas that may influence future price action.
5. Volume: Although not part of the candlestick chart itself, volume data is often analyzed in conjunction with the candlestick chart to confirm the strength of the trend and potential turning points.
Although candlestick charts and other technical analysis tools can provide useful information about market dynamics, they cannot determine the next market trend. The market is affected by many factors, including economic data, political events, company performance, hacker incidents, market sentiment, etc., which may affect price trends. In addition, technical analysis is based on historical data, and market conditions change rapidly. There is no causal relationship between them. How can we judge the next trend through historical quantities? There is a 50% probability of correctness in any transaction. Don't be complacent because you make hundreds of millions of dollars through candlestick judgments. Maybe it's just good luck.
Successful traders usually choose good targets and make long-term fixed investments. Those who claim to judge the future market trend through K-line are just fooling fools. If they are really that good, why don't they come out to fool you into paying a small membership fee and go to the market to pick up money?
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