All language subtitles for 6. How to Read and Analyze a Japanese Candlestick

Hello and welcome back to cryptocurrency trading masterclass by wealthy education.

In this video, I want to talk about how to read and analyze Japanese candlestick, the candlesticks,

that's what you're seeing right here, give you a deeper look at what's going on in the markets to give

you an idea of not only where price ended up for a particular trading period in this case one day,

but how it got there.

So there's three main types of charts.

The most common and basic one is the line chart.

Everybody has seen this.

It shows where prices are going.

But as you can see, you know, you can see that spot right there, one seventy six forty seven.

Well, we close there one day, but when you put the candle on.

Now it looks totally different.

So why is that?

Well, it's giving you four pieces of key information.

The open, the high, the low in the clothes, these are all important pieces of information.

So.

For example, if you simply.

Only paid attention to the clothes, keep an eye on this right here, the 12th of September.

So the 12th of September closed at one eighty three, twenty three, however, when we put the candlestick.

Chart up, it's bigger now.

Why is that?

Well, that goes back to that open, high, low, close.

So a candlestick is built with a body.

That's what this big part is.

And Wick's they come out from both sides.

So, for example, you might have a candlestick that looks like this.

They are a variation on the old standard bar charts that might look something more like this.

So what you're doing, as you read from left to right, is you're finding the opening price.

And the clothes price, so this line here is the total range for the day, so that's what both of these

are telling you.

So in other words.

You opened at this price, you closed at this price, so price rose during in this case a day could

be an hour, five minutes.

It doesn't really matter whatever timeframe you choose.

So when you look at this candlestick chart, you can see that.

It comes in a couple of different colors, it can be any color you want, you can change that if you

want.

But let's focus on the red ones for now.

So what the red one tells us right off the bat, without knowing anything about the price or the type

of day Red tells us or black and a white black chart.

That price fell during this candlestick again.

Which is a day so you can already disturb dessert right away, that the range that's with the Wick's

are this is your high.

And that's your low.

And this is simply the same thing is this the real Bonnie is where we traded most of the.

Day at so think of it the same way you see these ticks going on on each side, and since it's lower,

you know that the open had to be up here and the clothes had to be down here.

Otherwise, it wouldn't be red, just like if you had a candlestick like this.

You know that.

The clothes was higher than the open.

So in this case, this would be green or white in a black and white shirt.

And that's basically what the candlestick would look like.

You also know that.

That's your low.

And that's your high, so price rose over the course of that day.

So let's take a look at a couple of these candlesticks.

This candlestick here tells you the price fell ever so slightly for the day from the open to the close,

but it had a long wick underneath, which means if you were to draw it as a line just this one day,

it would open like this.

It would drop and it would close like that.

And that's important information.

That's information you don't get from a line chart.

And the reason that's important is because obviously there's people underneath there pushing price higher.

That's why it didn't close all the way down here.

And then you turned around and you saw this candlestick here.

And you can see that we opened.

And closed higher and in fact, as I zoom in like this, you can see that there was no quick so we opened

and just went straight up in the air.

We did rally a little bit, go a little higher from here and then closer right there.

So this candlestick looks like.

That.

On a line chart or on a bar chart?

It looks something like that there's your entire range, there's the open, there's a closed.

So it doesn't matter the market that you look at.

And I mentioned that they can be white and black.

I mean, you can you can set it to any color scheme you want, but the two most common are red and green

and white and black.

In this case, black would be the same as red.

It would be negative.

White would be the same thing as positive.

So on this candlestick here, as an example, let's go ahead and draw this one out.

You got a little bit of a quick.

But you closed higher and you pulled back just a little bit before you closed, so that's basically

how the day went.

Bullish day, just as this one here had just a tiny wick above.

So it did try to go higher.

Then it fell pretty significantly and closed like that.

Real body matters, the longer the real body, the more conviction there is behind the move, and that's

because they were willing to close higher, significantly higher than, say, they would on a candlestick

like this.

It's pretty quiet.

The range is much shorter, doesn't mean as much.

But when you see something like this, a lot of times you'll see follow through.

Look at this big, huge scandal here in Ethereum against Teather rallied significantly and we continue

to go higher.

And in fact, this looks very strong because we're seeing these big, long candlesticks.

The size of the real body matter simply because.

The candlestick like this, or better yet, even this one, we dipped a little bit, shot straight up

and closed almost at the absolute highs of the day.

That means people were comfortable not only buying, but holding.

Of course, the same thing can be said in a very bearish market, if you see a big sell off, look at

this big red candle here trying to rally broke close towards the bottom.

It's no surprise that we continue to get a little bit lower from their.

Now, there are a world of candlestick patterns out there that you can pay attention to, and we will

go through some of the most important ones in this course from here on.

There are literally hundreds of candlesticks and candle patterns, groupings of multiple candlesticks,

which is, you know, up to each individual trainer, most traders will find a handful that they really

like and then they'll match it with.

Maybe support a resistance.

So, for example, you might like.

Outside candles on a breakout.

Well, that's exactly what you got here.

This was obvious resistance.

We kept seeing sellers step in right around 250.

We broke out.

We closed near the top of the day and that kicked off a pretty big move.

That kind of thing is what traders will look for.

Some like specific candles like this one.

This one shows that the sellers came in, but they turned right back around and bought it back up.

It's actually a candlestick that we will talk a little bit more about in a couple of videos.

These big red candlesticks, people like those, you know, just like this big green candlestick, the

closet, almost the exact top.

You know, people like candlesticks to break out of Bollinger bands there are pretty much unlimited.

This is where back testing comes into play as well.

Part of it is psychology, certain candlestick.

You are much more comfortable trading that pattern than others.

But again, we'll take a look at some of the most important ones here in the next handful of videos

and then go from there.