Candlestick - Shedding Light on Structured Opportunities
1 . Picking Up the Right Chart
2. Japense Candlestick Patterns
3. Fundamental
4. Technical Analysis
1. Picking the Right Chart
•Visually pleasing
•Also shows bars that comprise of an open, high, low and close
•Body or a box drawn out between the open and the close
•Speeds up your reaction time
A candle Stick chart is probably the most visually pleasing chart you can look at on a day to day basis. It also shows bars that comprise of an open, high, low and close but the only difference now is that there is a body or a box drawn out between the open and the close.
If the close is below the open the open then the body and wick will be red and it will be green if the close is above the open. Being able to see the bodies of the candles helps us pick up the impact of the price movements very quickly and therefore helps speed up your reaction time as an analyst so this chart style would definitely be the suggested view as a new trader
2. Japense Candlestick Patterns
1. Bullish Engulfing :
The bullish engulfing pattern is a two-candle reversal pattern. The second candle completely 'engulfs' the real body of the first one, without regard to the length of the tail shadows. The Bullish Engulfing pattern appears in a downtrend and is a combination of one dark candle followed by a larger hollow candle.
2. Bearish Engulfing :
A bearish engulfing pattern is a technical chart pattern that signals lower prices to come. The pattern consists of an up (white or green) candlestick followed by a large down (black or red) candlestick that eclipses or "engulfs" the smaller up candle.
3. Hammer : A hammer is a type of bullish reversal candlestick pattern, made up of just one candle, found in price charts of financial assets. The candle looks like a hammer, as it has a long lower wick and a short body at the top of the candlestick with little or no upper wick.
4. Hanging Man : A hanging man is a type of bearish reversal pattern, made up of just one candle, found in an uptrend of price charts of financial assets. It has a long lower wick and a short body at the top of the candlestick with little or no upper wick
5. V -Formartion : The "V" patterns are formed when its trend is sharply switched from bearish to bullish (in case of V-Bottom) or bullish (or sideways) to bearish (in case of V-Top patterns). The critical aspect of the V pattern is it must have a sharp downtrend followed by a quick and sharp uptrend reversal.
3. Fundamental Analysis
Fundamental analysis is generally the practice of evaluating the value of an asset and analysing the factors that could influence its price in the future. The factors are what really matters because that’s what actually defines this methodology so lets have a look at some of the factors.
1.) Political ,Geographical & Economic Influences :
Certain events like a counties increase in the unemployment rates or a country’s economy and monetary policy statements affect the level of demand for its currency. If a country’s current or future economic outlook is good, their currency should strengthen and that’s where this concept would be derived from. The better shape a country’s economy is, the more foreign businesses and investors will invest in that country.
2. Company Reports :Company reports Are taken into consideration by investors who have interest in purchasing an amount of stock in a business. Because the value of the investor’s shares will only increase if the underlying value of the shares increase, one must be confident in the company’s potential growth and this is certainly something that a companies report can paint a clear picture on.
3. Media Interpretation & Influence :
Media Influences! Whether or not you read the newspaper, watch the news on television, follow news of social media or listen to news on the radio im sure at some point in time you have been exposed to news that was representative of true coverage and/or news reports that were blatantly manipulative of the facts. The news can influence trading and investing decisions to a significant degree.When using the media as a source of data and information one needs to be sure of the source’s reliability.
4. Environmental Influences :
Environmental Influences are the major influences to the supply and demand of (but not limited to) agricultural commodities. If a country experiences drought there are countless ways that would affect production. We would mainly see the rise in prices of fruit, vegetables and grains from a country that is generally rich in production of these commodities if it had to go through a drought which also inevitably affects trading decisions and market conditions for the commodity.
4. Technical Analysis
Technical analysis is a means of examining and predicting price movements in the financial markets, by using historical price charts and market statistics. It is based on the idea that if a trader can identify previous market patterns, they can form a fairly accurate prediction of future price trajectories.
