And this first video went to do the most basic of instruction, I'm going to teach you how to read a
candlestick because after all, it's going to be impossible to glean any type of information from these
charts if you do not understand the symbols in front of you.
A candlestick is simply another version of the bar chart.
In other words, there is the.
Open price, the high price, the low price and the close price, and you may be familiar with.
Something like this, and you might have a bar that looks.
Like that, you may understand that we opened at this price, we reached as high as this price fell
as low as this price and close at this price.
Well, Candlestick just it shows you the exact same information.
But it also does it with color coding now, typically it will be red and green, red being a negative
candlestick, green being positive, or you may see black and white shards, for example, and that
would be black is negative and white is positive.
Now, it can be any color scheme, but those are by far the two most common.
So when you see a candlestick, you'll notice that there's a fat part in the middle.
And there may or may not be Wick's.
Or shadows sometimes are called on the candlestick.
So in this case.
What you're looking at is.
Let me go ahead and color this, so in this case, let's say it's green, so we already know that it's
positive candlestick.
The price has risen during this candlestick.
This candlestick in this case happens to be on the daily chart.
So we can take information from that, you know, we know that.
Just like the.
Bar chart, there's your low, that's the low of the session.
This is the high.
That doesn't change, but what does change?
As this is the.
Body of the camel, and this is the range in which the market opened and closed.
This is your ticket to open and that's your clothes.
Now, how do we know?
Which ones which.
Well, you have to use a little bit of common sense here.
So, for example, if the candlestick looked like this.
And instead of.
It being green, it was red in the center, you know, that price fell during that time frame and this
case day, like I said.
So we know that that's open and closed because the closes lower than the open.
It's really that simple.
There's not a whole lot more to it than that.
There are some things about candlesticks that you need to keep in mind, some are more important than
others and there are multitudes of candlestick patterns.
But more importantly.
When you see something like this, you recognize very quickly at a glance that there's been a lot of
negative activity there and therefore we're probably in a downtrend or at least in a major pullback,
something to that effect.
Obviously, very, very, very negative momentum, the size of the body matters.
Because it suggests that there might be a bit of conviction.
So, for example.
On this Wal-Mart chart, you can see that this candlestick is pretty long, and what does that long
candlestick tell you that?
Well, that long candlestick tells you that.
There was a lot of selling during that particular session, just as this candlestick here.
Shows you just how bullish Wal-Mart was and beyond that, I would submit that closing at the very highs
of the day would matter as well, because there's no Wyk above.
It wasn't like there was any selling at the end.
So that's a very bullish sign.
So keep these things in mind, because the.
Psychology of the market is being shown to you on this chart, so that tells you that there was a real
conviction, just as this candlestick here tells you that they tried to rally, but they gave back most
of it and just how weak the buyers were by the end of the day.
So that tells you that perhaps they may be struggling like over here, for example.
You can see that the sellers really struggled here, struggled there, but they did continue, they
broke through their struggles and persisted.
So all of this is about psychology.
Now, obviously, you're going to learn a lot more about candlesticks than that in this course, but
just keep in mind, you know, every time you see a candle, think about what's going on there.
The cellars have overwhelmed the buyers here.
And therefore, it makes sense that we continue to go lower, just as it makes sense that with the buyers
closing at the highs of the day, it makes sense that we have risen from their.