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Introduction to Technical Analysis
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5 things to keep in mind when analysing candlestick patterns
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Analysing candlestick patterns can seem confusing. But with a few pointers, you’ll see how easy it becomes.
5 things to keep in mind when analysing candlestick patterns Reading a candlestick chart can be quite easy if you know what to look for. Here are 5 such things to keep an eye out for. First, you need to look at the time period for which the chart is prepared. Next, you need to look at the body of the candlestick to know the opening and closing prices of your stock. The upper wick, which shows the highest price of the stock for the relevant period, is another important thing to keep in mind. Similarly, the lower wick, which shows the lowest price of the stock, is also important. Lastly, if you’re reading a volume candlestick chart, the width of the candlestick is also important. It helps you analyse the trends in the volume of the stock traded during a particular period. Knowing these things can help you read and analyse a candlestick chart better. You can even recognize support and resistance levels using these charts. Head to the next chapter of Smart Money to know more about these metrics.