The advantages and disadvantages of cahndelistick that you should know in trading

Strategies How To Read Candlesticks Easily Trading Binary Forex and Stocks
By studying the pattern of candlestick patterns that appear we can analyze whether the movement of the market of an asset will RISE or DOWN.

Please note that candlesticks that move up or down are distinguished by color, namely:

  • Candlesticks that move up / uptrend are often called Bullish which is often depicted with a White / Green candlestick
  • Candlesticks that move down / down trend are often called Bearish which is often depicted with a Black / Red candlestic.
Gap in candlesticks has different meanings with gaps in bar charts. In a bar chart, a gap occurs if between high and low one session and another session does not overlap.While the candlestick gap occurs when there is no overlap between open and close one session and another session (only body

only).

This is because of the candlestick emphasis on the body of the candle. Therefore, in candlestick patterns, most if it is called a gap, what happens is a body gap. Likewise, the gap is filled if the next session body fills the gap.
But there are some candlestick patterns where the gap here includes shadow. If it's called a shadow gap, the gap can be filled by the shadow or the body of the next session.

Strengths and Weaknesses of Candlesticks
Candlestick advantages:
  1. Candlestick has a body that emphasizes the relationship between open and close so that it can warn traders about the psychological changes of market participants that can cause changes in trends even if only in the short term.
  2. The color of the candlestick which shows the session is bullish or bearish and the shadow makes the trader easier and faster in seeing and analyzing trends.
  3. Candlesticks are good at giving a signal of a change in direction of price movements. Candlesticks identify changes in market sentiment and provide signals faster than other technical analysis tools.
  4. Candlesticks can be used together with other technical analysis tools because both use open, high, low, and close data.
Shortage of Candlesticks:
  1. Candlesticks only signal in the short term.
  2. The signal from the candlestick does not provide the target price and how long the signal duration is.
  3. The percentage of success of the candlestick pattern is only 50% on average so that it gives less certainty.
Those are the weaknesses and advantages of candlesticks in trading that you should know.
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The advantages and disadvantages of cahndelistick that you should know in trading The advantages and disadvantages of cahndelistick that you should know in trading Reviewed by TRADING TRICK on June 03, 2019 Rating: 5

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