How to Read Candlestick Chart ②

Previously, I wrote about how to read a single candlestick.

Today, I will summarize how to read two or more candlesticks.

When we talk about two or more, it’s fair to say we’re already talking about chart reading.

By looking at a candlestick chart with no indicators displayed, you should be able to understand how to think about it.

Now, let's get started!

After-the-fact explanations are useless! What matters is a trading-ready way of thinking!!

Next, I would like to consider a chart like the following as an example.

It's a simple chart with only seven candlesticks, but if you don’t clearly grasp the interpretation, you cannot accurately track price movements.

Also, the diagram above already shows seven candlesticks, butin actual trading, you have to analyze while the chart is moving right nowso I would like to describe it in a chronological order that is as close as possible to real trading.

The basics start with one candlestick

First, consider the state where only candlestick ① is shown.

You don’t yet know what shape the next candle will take.

In actual trading, until the next candle appears, candle ① is not yet finalized, and anything other than the opening price can change, but assume candle ① is finalized and you are about to see candle ② appear momentarily.

When you have a single candlestick, the high and low are important.

As price rises, buyers thin out, sellers increase, and when buyer and seller forces balance out (price stops rising), that’s the high.

Similarly, as price falls, sellers thin out, buyers increase, and when the forces of buyers and sellers balance, that’s the low.

Between these highs and lows, there is a tug-of-war between buyers and sellers, and it is still unknown whether buyers will prevail and push prices up or sellers will prevail and push prices down.

Therefore, as a strategy, you needed to consider both buying on a new high and selling on a new low.

Up to here, this is a recap of the previous lesson.