10 MOST IMPORTANT TRADING CANDLESTICK FORMATIONS A TRADER MUST KNOW!
Stephen Amagba
(ex-Binance | ex-ICP) Sales, Marketing & Business Development for tech companies (blockchain mostly); CV & Portfolio below!??
Candlesticks have proven to be one of the most important tools of technical analysis, thus have become the very backbone of price action trading. This is because these candlesticks contain in them, the very vital information of what price is doing or has done in the past. Thus, understanding these candlesticks have helped traders a lot in knowing how the market behaves. Before we get into listing these most important candlestick formations, because there are a whole lot of them, let’s first understand what a candlestick looks like.
WHAT IS A CANDLESTICK?
Candlestick, otherwise known as Japanese Candlestick, is a bar which represents price movement of a particular security within a specific time-frame. It contains very vital information such as the Open price of an asset, the Close, the High(highest price moved) and the Low(lowest price moved) within that particular time-frame. They can be Bullish or Bearish as shown above.
A collection of these candlesticks plotted on a graph of time against price of the asset, are what make up a candlestick chart. These trading charts are used during technical analysis.
So, let’s head on to the most important of these candlestick formations...