Technical Analysis For Beginners: Candlestick Trading Guide!

Technical analysis is believed by many To be no different from Reading tea Leaves meaning that what you see on the Charts is entirely random so trying to Keep track of patterns in prices is Pointless well believe it or not but Technical analysis has been around for 300 years and has been used with Surprising success by many Traders Starting with Japanese rice Merchant Honar mahisa in the early 1700s he was The first to discover Document and trade patterns in prices he Invented the Candlestick chart and Trading candlesticks was his speciality It's believed that he made the Equivalent of $10 billion in profit That's why today we're going to show you How to trade like the first Trader I'll start by saying that nothing In this video is financial advice it's Purely for educational purposes more Importantly you should know that the the Information in this video doesn't just Apply to the crypto Market either Technical analysis can be applied to Almost any Market or asset that has lots Of trading volume and if you happen to Be looking to trade crypto then check Out the coin Bureau deals page it's got Trading fee discounts of up to 60% and Bonuses of up to 40 Grand on the best Crypto exchanges these are limited time Offers only available to the viewers of

This channel so check them out before It's too late the link will be in the Description okay that said the first Step to trading candlesticks is to Understand what candlesticks are put Simply candlesticks show you how much The price of an asset changed over a Given period if you have your Candlestick chart set to the hourly then Each candle corresponds to price changes In one hour of time every Candlestick Consists of two parts the body and the Wick which can come out out of the top Or the bottom as you can see here now The body of the candle tells you where Prices started and ended during that Period whereas the wick tells you the Highest and lowest prices that were hit During that period logically a red Candle means that prices went down During that period whereas a green Candle means that prices went up during That period on red candles the starting Price is at the top of the body and the Closing price is at the bottom of the Body for green candles it's the opposite Bottom to top if you look at a Candlestick chart for any asset you'll Notice that candlesticks come in many Different shapes and sizes some Candlesticks are all body and no Wick Whereas others are all Wick and no body And if you look closely you'll notice That there are some surprisingly

Consistent patterns among them this is Not a coincidence what all these Candlesticks ultimately reflect is the Collective psychology of the people who Are trading the asset in question Specifically their emotions of fear and Greed Hon's groundbreaking discovery was That these emotions often follow Predictable patterns when the price of An asset suddenly starts going up people Tend to feel greedy and buy this causes Its price to go higher and higher until They can't basically buy anymore as soon As someone starts to sell the price Starts to fall people start to feel Fearful and sell until they basically Can't sell anymore what Candlestick Patterns fundamentally do is give you a Sense of where people could be in this Fear and greed cycle this cycle exists In all liquid markets hence why these Patterns can be found in all of them Notably these patterns can also be found On every time frame be it the 15minute Or the monthly the caveat is that Candlestick patterns arguably work Better for cryptos because the people Buying and selling coins and tokens tend To be more emotional than say Institutions buying and selling Government bonds fun fact most Institutional buying and selling is Automated but that's a topic for another Time and by the way if you're enjoying

The video so far be sure to smash that Like button to give it a boost in the Algorithm now Candlestick patterns fall Into three categories neutral bullish or Bearish bullish and bearish Candlestick Patterns can be further divided into Reversal patterns and continuation Patterns obviously reversal means that Prices are about to change direction While continuation means that they won't So let's start with the neutral Candlestick patterns now the three most Popular here are the gravestone dogee The dragonfly dogee and the regular Dogee which is also sometimes referred To as the long-legged doe as you might Have guessed dogee is a Japanese word Which roughly translates to quote the Same thing as you can see the gravestone Dogee consists of a Candlestick that's All Wick and no body with what's left of The body at the very bottom what this Tells you is that prices within that Period pumped a lot at the start but Ended up coming back down to the price Level that they started at during that Period this apparent profit taking is Why some Traders argue that the Gravestone dogee is bearish but it's Generally believed to be neutral this Really depends on the candles before and After the gravestone dogee as well as The broader price trend we'll come to The more complex Candlestick patterns in

A bit now if you want to know how to Identify and trade price trends you can Check out our previous technical Analysis tutorials in the description Anyway the second neutral Candlestick Pattern is the dragonfly dogee like the Gravestone dogee the dragonfly dogee is All Wick and no body the difference is That what's left left of the body is at The top of the candle this tells you That prices within that period dumped a Lot at the start but ended up coming Back up to the price level that they Started at during that period of course This apparent dip buying is why some Traders argue that the dragonfly dogee Is bullish and finally we have the Regular dogee aka the long-legged dogee Like the gravestone and dragonfly dois The regular dogee is almost all Wick and No body the difference is that what's Left of the body is in the middle note That the body doesn't have to be Perfectly in the middle for it to be a Regular dogee just close by now you'll Know that long Wicks on the bottom and The top mean that prices within that Period pumped and dumped a lot but ended Up coming back to the same price level That they started at during that period This suggests indecisiveness by Traders And is therefore truly neutral now given How bullish the crypto Market has been Lately you might be wondering how to

Know when it's going to start getting Bearish this is where the bearish Reversal patterns come in these include The shooting star the bearish engulfing And the advanced block note that this List is not exhaustive so starting with The shooting star it consists of a red Candle with a small body and a long Wick Shooting stars typically occur during a Strong uptrend I.E after multiple green Candles the long wick on the shooting Star tells you that Traders are starting To take profit and that a reversal could Be imminent now next up we have the Bearish engulfing which consists of a Green candle followed by a red candle That has a larger body than the green One in contrast to the shooting star the Bearish engulfing patent doesn't depend On the broader Trend though some Traders Argue it's more accurate in an uptrend What the bearish engulfing effectively Tells you is that Traders are feeling Fearful for whatever reason that's Because they're suddenly selling more Than they were buying just before from What we've seen cryptos experience lots Of bearish engulfing patterns probably Because of all the emotions involved now The advanced block is another common Candlestick pattern you see in the Crypto Market it consists of three green Candles with large bodies with the body Of the second candle being smaller than

That of the first candle and the body of The third candle being smaller than that Of the second candle what this tells you Is that bullish momentum is running out Of steam and that a bearish reversal is Imminent the caveat is that it's a good Idea to double check that the trading Volume reflects this if trading volume Is increasing throughout the pattern Then it may not play out as expected and This relates to the other side of the Coin which is the bullish reversal Patterns these include the inverted Hammer the bullish engulfing and the Three stars in the South you'll notice That these bullish reversal patterns Tend to look almost identical to the Bearish reversal patterns except well They're in Reverse not surprisingly the Inverted Hammer tends to confuse Traders That's because it's the exact same as The shooting star at least in theory in Practice however the inverted Hammer Consists of a green candle not a red Candle it also occurs during a strong Downtrend not a strong uptrend with the Inverted Hammer you must pay less Attention to the long upper Wick which Signifies profit taking and more Attention to the chunky base of the Candle which signifies buying around a Low level depending on the circumstances This means that prices are about to Explode higher in contrast to the

Inverted Hammer the bullish engulfing is Straightforward it consists of a red Candle followed by a green candle that Has a larger body than the previous red One naturally this tells you that Traders are feeling greedy for whatever Reason they're suddenly buying more than They were before and when it comes to The three stars in the South it's the Perfect opposite of the advanced block Three red candles with large bodies Wherein the second candle has a smaller Body than the first and the third candle Has a smaller body than the second this Tells you that the Bears are running out Of steam as with the advanced block However it's important to check the Trading volume to see if the Bears Really are running out of steam if the Trading volume is decreasing throughout The pattern then it may not play out as Expected it's important to be aware of Larger technical patterns and moving Averages as well I'll remind you that we Have other technical analysis tutorials In the description now given how bullish The crypto Market has been lately you Might also be wondering how to know it's Going to continue this is where the Bullish continuation patterns come in These include the bullish thre line Strike the rising three methods and and The bullish mat hold I know these names Are

Wonderful anyhow the bullish three line Strike consists of three green candles With medium bodies followed by one Candle with a large red body that brings Prices back down to the start of the First green candle the bullish three Line strike happens during an uptrend But it can be hard to understand if you Watched our video about crypto trading Strategies however you'll know that These massive red candles are driven by Liquidations from leveraged lawns during Bull markets in plain English everyone Is bullish and betting that prices will Rise when they fall just a bit it causes A lot of forced selling it's also Important to note a bullish three line Strike can be bearish during a downtrend Or in other circumstances for example if The red candle was caused by the US Sanctioning that crypto project or Protocol it's safe to say that it Doesn't matter if that coin or token was In an uptrend anyway next up we have the Rising three methods which consists of a Green candle with a large body followed By three red candles with medium bodies And another green candle with an equally Large body like the bullish three line Strike the rising three methods is only Bullish when it occurs during an uptrend Now what the Rising 3 methods tells you Is that the Bulls and the Bears went to Battle and the Bears lost the Bulls

Started by pumping the price and the Bears fought hard to bring it down in The end however prices pumped right back To where they were before the battle Began putting the Bulls back in control And in this sense the bullish mat hold Is like the Bears went to war with the Bulls not just to Battle the bullish mat hold consists of A green candle with a very large body Followed by three red candles with very Small bodies and a green candle with a Large body that goes higher than the First green candle it's a war between The Bulls and the Bears wherein the Bears not only failed to bring prices Back down to their pre-pump lows but Were completely blown out to the upside Low and behold bullish mat holds also Seem to be very common in crypto this Makes sense given we've got the biggest Bulls and bears this ties in to the Opposite side of the spectrum bearish Continuation patterns these include the Bearish three line strike the falling Three methods and the bearish mat hold Now once again these bearish Continuation patterns are the exact Opposite of the bullish continuation Patterns the bearish three-line strike Consists of three red candles with Medium-sized bodies followed by a green Candle with a large body that brings Prices back to what they were at the

Start of the first red candle bearish Three-line strikes tend to occur during Downtrends which can again seem Counterintuitive you'll remember that All this has to do with leverage when Prices are going down every one is Bearish and betting they'll go down Further when they go up just a bit this Causes forced buying that causes prices To pump given all the leverage in the Crypto Market that last green candle Tends to be very large as for the Falling three methods it consists of a Red candle with a large body followed by Three green candles with medium-sized Bodies and then a red candle with an Equally large body you'll recall that This is the battle between the Bulls and The Bears in this case however the Bears Win the same is true for the bearish mat Hold which consists of a red candle with A very large body followed by three Green candles with small bodies and then A red candle with a large body that Brings prices even lower not going to Lie looking at this pattern gives us PTSD we've seen it too many times in Crypto such my friends is war now to Wrap things up let's look at a few Crypto charts to see if we can spot These Candlestick patterns starting with BTC it appears that the recent spot Bitcoin ETF induced pump created an Advanced block on the weekly What

Followed was a correction but it's too Soon to say if it's a trend reversal Zooming into the daily BTC appears to Have had more than a dozen dois back in October the result was that prices moved Almost perfectly sideways for weeks that Was until BTC experienced an advanced Block on The Daily which appear appears To have caused the correction we saw on The weekly chart now switching to eth You can clearly see the bullish Engulfing on the weekly it happened Right after eth hit its recent low of Around 1.5k what we've seen since then Is a huge surge to the upside all green Candles with large bodies the regular Dogee we see now could be a sign that Eth will trade sideways and the daily Chart for eth is similarly interesting When it was revealed that Black Rock was Filing for a spot ethereum ETF eth Pumped by more than 10% in a day after That it painted an impeccable three Stars in the South pattern however this Pattern did not result in a rally eth Pulled back the daily chart for eth BTC Tells a different story however as you Can see eth experienced a three stars in The South pattern and it actually Resulted in a sustained pump against BTC It's possible that eth is now in the Process of painting a Rising three Methods or a bullish mat hold Continuation patterns but there's a big

Red flag for eth BTC on the weekly can You see it that's right an equally Impeccable Advanced blog that Foreshadows a bearish reversal given That eth is in a longer term downtrend Against BTC it seems more likely than Not that this bearish reversal will play Out but there's no knowing for sure and Therein folks lies the reality of Candlestick trading and technical Analysis in general you can never know For sure in a financial world free of Tail risks and Tailwinds these patterns Would probably play out perfectly every Single time however we live in a Financial world that's filled with those Aforementioned tail risks and Tailwinds In other words there is no shortage of Factors that could suddenly cause prices To pump or dump like the announcement of Money printing or the announcement of a Pandemic respectively more often than Not it's these tail risks and Tailwinds That invalidate technical analysis Patterns moreover you'd have noticed That these technical analysis patterns Look very different in practice than They do in theory they're not always Easy to identify and sometimes that's Because there's no pattern at all so When you're not sure it's best to sit on The sidelines and wait until you see Something you know alternatively you can Switch between time frames to see if it

Gives you a better sense of what's going Going on as a rule of thumb longer time Frames are more powerful than shorter Time frames that's because the shortest Time frames are often very volatile Especially if you're trading crypto and Finally never forget that there are Thousands of Traders out there who are Seeing the same patterns that you are Including wealthy individuals and Institutions these entities can Sometimes manipulate these patterns to Make a profit from less experienced Traders and investors like you and me as Trader Dale Pinker likes to say what is Obvious is obviously wrong always be on The lookout for Wales look at prices From different Vantage points and with Different indicators stick to trading The assets you know and understand and Practice practice practice you can use Our videos to Help and that's all for today's video Folks so if you learn something new Smash that like button to let us know if You want to keep learning subscribe to The channel and ping that not Notification Bell if you want to help Others learn take a second to share this Video with them and remember that the Coin Bureau deals page has up to 60% Discounts on trading fees and up to $40,000 of bonuses on the best crypto Exchanges these deals are limited and

Can save you a lot of money so be sure To check them out before it's too late The link will be in the description Thank you all for watching and I'll see You next time this is Guy signing Off [Music]