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Candlestick type and use
The stock's share price in the stock market never goes straight, nor can it move. Over time, prices sometimes fall. And the history of this fluctuation is engraved on the chart of the share price.
Analyzing the Historical Chart of the share price shows that sometimes this price change follows some special pattern. And those who use the traders during the technical analysis to estimate the potential of the share price in the future to make the trade plan.
In addition to the demand-surface zone, support-resistance line, trend line, volume, various indicators, etc., some special chart patterns are also very effective in Share Trading.
In this article, we will discuss some of the classical chart patterns.
The primary idea of the Candlestick Chart pattern
Why is the chart pattern made?
The share price in the stock market is the most important, above all. And this price depends on how much buyers and sellers are agreed to buy and sell. That is, in other words, the demand and supply determine how much the share price will be or which direction will go.
Like the general market, when the demand for shares is higher than the supply, buyers agree to buy them at higher prices. As a result, the price continues to rise. And, on the contrary, if the supply is high than the demand, then the sellers want to leave the share they have at the price they get. As a result, the price falls again. The price fluctuations continue to continue and continue. And this is the true truth of the stock market.
Again, in special circumstances and at the special level of the share, buyers and sellers collectively react to one of the most effective effects on demand and communication. When the shares of the shares are plotted on the chart by the candle stick or any other chart, the traders' reactions are seen in the form of a special pattern on the chart.
Once again, not twice, or one duo, it is seen repeatedly repeated in different places. And when it is repeated, when a pattern that happens in the live market during the trading is seen again, it is a prediction of what may happen then. This is the significance of the chart pattern, the back of the pattern trading.
Chart pattern
Because of the situation before the preparation, they can be divided into two parts based on which direction the price can go after the pattern is created. Namely
- Continuation chart pattern
- Reversal Chart pattern
In both cases, the longer time they are made and the larger the price in the price, the larger the movement after the breakout.
In the middle of the pattern is created, the trend will continue or will turn around but it is not understood. So the main trends and pattern trendlines have to be monitored well and it is necessary to take care of where the breaker is about to be it. Another important thing is that if there is no signal or cause for the trend, the trend usually moves in the same direction.