How to read a candlestick chart

Den mest grundläggande färdigheten som behövs för att investera är förmågan att läsa ett aktiediagram och sedan förstå hur dessa data kan hjälpa din investeringsframgång. Ett av de största misstagen för dagens investerare är att förbise denna grundläggande färdighet och skjuta från höften. Den här artikeln förklarar vikten av ljusstakar som är den minsta byggstenen i den typ av aktiediagram som kallas för candlestick diagram.

The most basic skill needed for investing is the ability to read a stock chart and then understand how that data can help your investment success. One of the biggest mistakes of today’s investors is overlooking this basic skill and shooting from the hip. This article explains the importance of candlesticks which are the smallest building block of the type of stock chart called a candlestick chart. Candlesticks are usually one of four colors. Sometimes you see green candlesticks represented by hollow and black-filled candlesticks. These candlesticks represent the closing price higher than the open price. The black and red filled candlesticks represent the price dropping on that day.

Long and short bodies

The longer the body of a candlestick, the more pressure for the stock to increase or decrease in price compared to the opening price. A short-bodied candlestick represents a consolidation of price where buyers and sellers were more in agreement on what the stock price should be.
Long flames or green candlesticks show strong buying pressure. The longer the body the further the close was from the open and the more the price rose from the opening price. Often this represents strong bullish pressure but this also depends on volume and the pattern created by the previous candlesticks. If this long green or clear candlestick occurs at the bottom of a longer period of price decline, it may show that the bulls have dug in and set a price that they think is too low. If they defend this price and continue to buy at this price, forcing the stock up in value, it is called a resistance price. Long black or red candlesticks show strong selling pressure. If the long-body candle was RED or completely black, it could show panic as those who had been holding on to the stock admitted that the stock was going to fall or it could show that an institution was ready to dump a large block of its holdings to take profits. Long flames short shadows. The upper and lower wicks or shadows can show very valuable information about a trading session. Upper Shadows represent the highest price of the day and Lower Shadow represents the lowest price of the day. Days with short shadows indicate that most of the trading took place near open and close prices. Candlesticks with long shadows show that buyers and/or sellers fought losing battles to get the price higher or lower. When the top shadow is long, it shows that the buyers (also called the bulls) fought to take the price higher and lost when the sellers (or bears) pulled the price back down. The bottom shadow represents the sellers pushing the price down and the buyers helping to pull it back up.

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