What is a candlestick? in forex trading, candlestick is just one type of graph that is widely used by traders in analyzing the next price movement because it shows the condition of the price more clear and more detail.
We return to the first analysis, the function of the analysis either technically or fundamentally is to determine whether the price will rise or fall, and whether it will move in the same direction or reverse direction. valasonline
Based on the type of purpose, this analysis is divided into 2, namely:
- Analysis to determine the trend that will happen
ie analyzing the movement of price graphs to estimate the shape of the graph that will occur. (the target is a series of canclesticks)
- Analysis to determine the type of candlestik that will be formed
that is predicting 1 candlestik only the next will be formed, whether candle bullish or candle bearish. (targeted is 1 candlestick only) But this targeted candle has long (point value) same big with a trend.
Both analyzes determine the trend and determine the candlestick that if both are successful then the profit earned can be just as big. Because it could be 1 fruit candlestick on TF 4 hours that pointnya distance equal to a trend in TF 5 minutes. So just choose which one is easier, determine the graph pattern or 1 candlestick.
In terms of determining what trends will occur, the role of candlestick is just as a signal entry / entry point, so traders get the best price. Here are some examples of incoming signals or entry points or dots to start doing forex transactions shown by candlestick:
I. Entry Point Trend Rise
The ascending trend can be detected by the emergence of a bullish long-term bullish candle after the graph forms a rising low.
And this is the result
II. Entry Point Trend down
The downtrend can be detected by the appearance of a long-forward continuous bearing candle after the low-decked high graph
Here is the result
III. Rear Point Entry Rise Up
The reversal of the downtrend into a rising trend can be detected by the emergence of candle hammer or inverted hamer and candle reversal in the oversold or convergent area.
Here is the result
IV. Back Entry Point Down
Reversal of the upward trend to downward trend can be detected by the emergence of candle shooting star, hanging man and other reversal candle in the overbought or convergent area
Here is the result
In case of determining the next candle type whether bullish or bearish, candlestick serves as the main actor, the support is the form of the previous candle drawing chart.
I. The forwarding entry point is if the previous candle formed a candle continuation and the constituent graph shows the trend will still continue.
The most potential to continue the trend is when the price just behind the direction, or a new trend in the start, because if the trend has formed then the next potential is weakening. Therefore, to aim for the next candle should we use a candle that characterizes that the price just behind the direction or new trend began. And the candle shape looks like this:
Example analysis:
In the picture above we see that has appeared candle type continuation. From here we can predict that the next candle will go down. For mesamstikannya we see the pattern of its graphs at a smaller time frame, then we analyze whether the graph shows that will terjeadi down trend as well.
From the graph above we find 3 things that show the trend will go down are:
A low peak
Support line successfully penetrated
A break of this support line is confirmed by a correction which is then reversed again down by the long candle.
And here's the result:
down trend prediction results
II. Entry point reversal is if the previous candle shows the type of candle reversal, confirmed by the form of the constituent charts are overbought or oversold or even convergent.