Introduction:

What is a candlestick and how does it represent market activity?
Why is it important to have a visual representation of market activity?

Candlesticks are important to your trading analysis because, it is considered as a visual representation of what is going on in the market. By looking at a candlestick, we can get valuable information about the open, high, low and the close of price, which will give us an idea about the price movement.

1.Advantages of Candlestick Analysis:

How can candlesticks be used in combination with other technical analysis tools?
What is the Dow Theory and how can it be used in conjunction with candlestick analysis?
What is the Eliot Wave Theory and how can it be used in conjunction with candlestick analysis?
How can candlestick analysis help us understand human behavior in relation to money?
How do candlesticks provide more valuable information than bar charts?

Candlesticks are flexible, they can be used alone or in combination with technical analysis tools such as the moving averages, and momentum oscillators, they can be used also with methods such the Dow Theory or the Eliot wave theory. I personally use candlesticks with support and resistance, trend lines, and other technical tools that you will discover in the next chapters.

The human behavior in relation to money is always dominated by fear; greed, and hope, candlestick analysis will help us understand these changing psychological factors by showing us how buyers and sellers interact with each other’s.

Candlesticks provide more valuable information than bar charts, using them is a win-win situation, because you can get all the trading signals that bar chart generate with the added clarity and additional signals generated by candlesticks."

2.

Professional Use of Candlestick Analysis:

Why do professional traders, banks, and hedge funds use candlestick analysis?
How can understanding candlestick patterns help traders avoid losing money to the big players in the market?
How does the use of candlestick patterns help traders make informed decisions about entering, exiting, and staying away from the market?

Candlesticks are used by most professional traders, banks, and hedge funds, these guys trade millions of dollars every day, they can move the market whenever they want. They can take your money easily if you don’t understand the game.
Even if you can trade one hundred thousand dollars trading account, you can’t move the market; you can’t control what is going in the market.
Using candlestick patterns will help you understand what the big boys are doing, and will show you when to enter, when to exit, and when to stay away from the market.