๐ What is a Candlestick?
A Candlestick is a visual representation of price movement for a specific time period (1 min, 1 hr, 1 day, etc.) on a chart. It's used in technical analysis to make smart buy/sell decisions.
It shows:
Open price
Close price
High
Low
Each โcandleโ = 1 unit of time (ex: 1 hour candle shows 1 hour of market behavior).
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๐ Where is it Used?
Candlesticks are used in: | Market | Usage | |------------------|-----------------------------------| | ๐ Stock Market | To predict stock trends | | ๐ฑ Forex Market | Currency pair movement | | ๐ช Crypto Market | To trade coins (like BTC, ETH) | | ๐ Commodities | Gold, oil price action |
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โจ Key Features of a Candlestick
1. Body:
Represents the opening and closing price.
If green (or white) = price went up.
If red (or black) = price went down.
2. Wicks (or shadows):
Top wick = highest price
Bottom wick = lowest price
3. Patterns:
Formations of candles that predict market moves.
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๐ Types of Candlestick Patterns (With Meaning)
Pattern Name Meaning
Doji Market indecision
Hammer Bullish reversal (buy signal)
Shooting Star Bearish reversal (sell signal)
Engulfing Strong trend reversal indicator
Morning Star Bullish trend confirmation
Evening Star Bearish trend confirmation
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๐ ๏ธ How to Use Candlesticks โ Simple Steps
โ Step 1: Choose a Charting Platform
Use platforms like TradingView, Binance, or MetaTrader.
โ Step 2: Select Timeframe
Choose 1-minute, 15-minute, 1-hour, or 1-day candles depending on your strategy.
โ Step 3: Identify Patterns
Look for common patterns (e.g., hammer, engulfing, doji) that hint at trend reversals or continuations.
โ Step 4: Combine with Indicators
Use candlestick patterns with:
RSI (Relative Strength Index)
MACD
Support & Resistance Levels
โ Step 5: Plan Entry/Exit
Enter after confirmation of a bullish/bearish pattern.
Set stop-loss to manage risk.
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๐ What Are the Results of Using Candlesticks?
Benefit Result
Better entry/exit timing Higher chance of profit
Visual trend recognition Easier to read price action
Pattern recognition Predict market moves in advance
Risk reduction Helps avoid emotional decisions
Scalping & swing strategies Fit both short-term and long-term
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๐ Example: Bullish Engulfing Pattern
1st candle: Small red (bearish)
2nd candle: Big green (bullish) that fully covers red
๐ฝ Meaning: Buyers taking over โ Price may go up
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๐ TL;DR
Candlestick = visual tool showing open, high, low, close.
Used in crypto, stocks, forex, commodities.
Patterns help predict price movement.
Combine with RSI, MACD for strong signals.
Useful for day traders, swing traders, and investors.
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