To understand candlestick charts, you can refer to the following techniques:
1. Understand the composition of candlesticks, which consist of the body, upper shadow, and lower shadow. The body reflects the relationship between the opening price and the closing price, while the upper and lower shadows represent the highest and lowest prices, respectively.
2. Analyze candlestick cycles, such as daily candlesticks being suitable for short-term trading, while weekly and monthly candlesticks are suitable for medium to long-term trading. Different cycles reflect market trends over different time spans.
3. Observe the bullish and bearish characteristics of candlesticks to determine the overall market trend. Bullish candlesticks indicate an upward trend, while bearish candlesticks indicate a downward trend.
4. Pay attention to candlestick patterns. For example, a large bullish candlestick indicates that bulls are in control, while a large bearish candlestick indicates that bears are in control. A doji candlestick may signal a potential reversal.
5. Focus on candlestick combinations, such as double-bottoms and dark clouds, which have different market implications.
6. Combine trading volume to determine buy and sell signals; the relationship between volume and price is more reliable.