Lecture 2: The First Step in Technical Analysis — The Truth of Candlesticks
I am Trade Coach Max.
Currently, I am on the third day of a 25-day consecutive posting.
Yesterday I talked about how rate movement is the result of forming consensus. So, how should we visually read the process of forming that consensus?
The first step to the answer is what traders around the world see most often“candlestick charts”.
■ Max’s history: the days I sought the “answer” in candlesticks
The technical indicator I first seriously tackled was candlesticks. Back then, I immersed myself in creating logics that yield high win rates merely from candlestick shapes—believing that certain patterns meant reversals and others meant continuations.
I summarized those research results and released in 2009 a product called ‘Candle StickFX.’ Since that time, I have been passionate about quantifying not only the shape of candlesticks but also the crowd psychology behind them.
■The truth of candlesticks in modern markets
2009saw markets with different volatility and different degrees of algorithmic interference than today.
However, that does not mean candlesticks are unnecessary. Their true role is“to maximize win rate when combined with other evidences as the final trigger”.
■The will embedded in candlesticks
A single bullish or bearish candle marks the settlement of the battle within that time span.
・Long upper wick = there was strong rejection (selling) at high prices
・Large real body = funds moved decisively in one direction without hesitation
Autonomous traders do not memorize candlestick patterns; they read the settlement of will to determine who has surrendered on the battlefield now. Tomorrow, I will discuss a concept that is extremely important for identifying that battlefield.
【RCI6/10DifferencesRCI6/10
<To be continued tomorrow>
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