Altcoin Trader Essentials: Profitable Candlesticks

April 21, 2014 07:37 UTC

The following article discusses the profitable Major Japanese Candlestick Patterns most valuable to cryptocurrency traders of all persuations. Quickly locate high-accuracy investor sentiment trend swings, as well as avoid nasty whipsaw-like effects. Out of the vast number of different Candlestick Signals, there’s less than two dozen actually worth committing to memory (covered below).

Brief Candlesticks History

Here in the West, we only recently became acquainted with Candlestick charting (introduced to the mainstream in the early-mid1990’s by Candlestick Master, Steve Nison). However, Japanese Traders have used these powerful charting techniques to make fortunes both great and small for nearly three centuries.

Legend has it that a particular Japanese Trader named Homma Munehisa enjoyed a Dynasty-sized fortune using the original Candlesticks to study the rice contract prices. Munehisa reportedly developed the very first Candlestick charts based on Sakata’s Five Patterns. He eventually went on to develop a far superior version of the Candlesticks, refined over many years of trading.

Ultimately, it is Munchisa’s amazing work that we owe our deepest gratitude to; inspiring the very Candlesticks we still use to this day.

Characteristics Of Individual Candlesticks

  • A trade instrument closing higher than where it opened will create a Bullish light-colored Candle (usually white or green).
  • Trade instruments that closes lower than it opened at produces Bearish dark-colored Candles (usually red or black).
  • The lines extending from the body of the Candles are the wicks (aka ‘shadows’ or ‘tails’).
  • Market indecision is represented by a ‘Doji’, which is created when a stock price closes or very near where it opened.
  • A hollow Candle is formed when a trade instrument closes higher than its opening price.
  • A filled (solid) Candle is formed when a trade instrument closes lower than its opening price.

High-Profitability Candlestick Patterns

The following Candlestick Patterns represent the most profitable trade signals and are consequently referred to as the ‘Major Candlestick Patterns’ or ‘Major Candlestick Signals’. In this case, “major” actually signifies two things:

1) Frequency of occurrence (the Candlestick Patterns and Signals that show up most often),

2) Signal strength (in terms of positioning for profitable trades in price reversals).

These highly profitable Candlestick Signals will provide around-the-clock trading excitement trade for savvy Altcoin Traders. The best part? Unlike many other types of technical analysis, Candlestick Patterns do not require knowing fancy formulas whatsoever. Once you’ve become acclimated, the patterns are quite easy to recognize, and trades will start to ‘jump out’ at you.

The most reliable and easily-recognized Major Candlestick Candlestick Signals and Patterns include:

From Candlesstick Master, Stephen Bigalow:

Doji Candlestick

When learning to read candlestick chart patterns, the Doji if often the first discussed and deemed the most important. While it is not wise to use this candle alone, when online trading, the Doji marks the beginning of a minor or intermediate trend reversal, and is therefore very important to recognize.

The appearance of a Doji after a long uptrend is a warning to investors that the trend is either close to peaking, or has already peaked in the open markets. On the other hand, after a long downtrend the exact opposite is true and prices have been forced down. There are four types of Doji candlesticks that investors must learn before day trading stock online using Japanese candlesticks. These four types include the common Doji, the long-legged, the dragonfly, and the gravestone. The basic Doji signal was already discussed however the three additional types of Doji signals are explained below.

1. Long-legged Doji – this Japanese candlestick signal has a long upper and lower shadow that is almost equal in length, however the trader should observe the candle’s close in relation to the midpoint. A close below the midpoint of the candle indicates weakness. This signal indicates that prices traded well above and below the session’s opening level, but the end result shows little change from the open.

2. Dragonfly Doji – this signal forms when the open, high, and close are equal, and the low creates a long lower shadow. This signal indicates that sellers drove the prices lower during the session, however by the end of the session the buyers pushed the prices back to the opening level and the session high. This signal looks like a “T” with a long lower shadow and no upper shadow.

3. Gravestone Doji – This Doji candlestick looks like the opposite of the dragonfly thus forming an upside down “T.” It has a long upper shadow and no lower shadow, and it forms when the open, low and close are equal. The high is what creates the long upper shadow. This candlestick trading signal indicates that the buyers drove prices higher during the session, and by the end of the session, the prices came back up to the opening level and the session low as a result of the sellers.

Chart Analysis Basics

Basic chart analysis techniques go hand in hand with Candlestick Pattern recognition. The following ‘suggested reading’ list will provide you with the ‘need to know’ core essence to become a better Altcoin trader.

Closing Thoughts

Candlestick Signal recognition will give you a trading edge like no other. What’s more is that they can be used alongside any other indicator, on any time frame, and with any trade instrument. If you were only going to watch one video on Candlestick Patterns, this is THE one:

High Profit Trades Found With Candlestick Breakout Patterns
(Featuring Stephen Bigalow)

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Government regulations require disclosure of the fact that while these methods may have worked in the past, past results are not necessarily indicative of future results.

  • There is a potential for profits there is inherent risk involved in cryptocurrency trading. Losses from trading cryptocurrencies can be significant.
  • Speculative trading is inherently risky and should only be undertaken by individuals with adequate risk capital.
  • makes no claims whatsoever regarding past or future performance. Article content is provided on an “AS-IS” basis, for educational or informational purposes only.
  • accepts no liability whatsoever for losses incurred as a result of anything written in this report. Always seek professional help when it is prudent to do so.

Last modified: November 11, 2019 11:43 UTC

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