Day Trading Charts - The best free candlestick charts

Trading candles explained

Trading candles explained

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Candlestick Charts Explained - Trading the Patterns

Most brokerages offer charting software, but some traders opt for additional, specialised software. If you’re new to day trading using charts then the standard software you get from your broker should cut the mustard.

Candlestick Charts 101 Learn from the Master Steve Nison

This is one of the particularly reliable bearish candlestick patterns. It is signalling that a top is in place and a trader should close any long positions or get ready to short the market.

This doji’s pattern conveys a struggle between buyers and sellers that results in no net gain for either side. Alone a doji is neutral signal, but it can be found in reversal patterns such as the bullish morning star and bearish evening star.

When looking at a candlestick chart, the candlestick on the far left will be from the oldest trading period, and the one on the far right will represent the newest or current trading period. The current candlestick can be moving because the current price is used instead of the close price, meaning the candlestick’s colour could shift from green to red or vice versa before the trading period is over.

Our take profit strategy is fairly easy and it’s slightly modified from the original strategy highlighted in the “Day Trading with Short Term Price Patterns and Opening Range Breakout” book written by Toby Crabel.

The selling overwhelms and traps the new buyers. If the next candle fails to make a new high (above the dark cloud cover candlestick) then it sets up a short-sell trigger when the low of the third candlestick is breached. This opens up a trap door that indicates panic selling as longs evacuate the burning theater in a frenzied attempt to curtail losses. Short-sell signals trigger when the low of the third candle is breached, with trail stops set above the high of the dark cloud cover candle.

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It indicates that there was a significant sell-off during the day, but that buyers were able to push the price up again. The large sell-off is often seen as an indication that the bulls are losing control of the market.

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