If the requirement to achieve a profit that is a correct prediction, then we must try to predict the next market direction. And to predict the next market direction can be done in three ways.
Which must be known to read candlestick?That is a part of candlestick itself. We all know that the candlestick formed by the opening price (open), the highest price (high), lowest price (low) and the Closing Price (close) to the period or time frame.
The difference in the position of the Open, High, Low and Close this makes candlestick forms from time to time different. And from a candlestick form, it consists of several parts.
1. Upper tail
Tail above shows a pressure of seller. The greater the pressure and the buyer can not keep up then the buyer will lose and end of the period of depressed prices down to form a long tail.
The amount of body shows a dominance between buyer and seller. If at that time the buyers are dominating the market will body candle brightly colored (white / green). Similarly, when that is dominating the body candle seller dark (red / black).
3. Lower tail
Below shows the impulse tailed by buyer. Encouragement will lift prices higher. If previously the price down then with the encouragement will form a tail down.
Of the three things above are PRESSURE FOR SALE - DOMINATION - BUY ENCOURAGEMENT we can read what happened in the candlestick.
We can read candlstick the following framework:
At first the market is dominated by (BUYER / SELLER) but then (BUYER / SELLER) provides resistance to doing (PRESSURE SELL / BUY PUSH). If the end of the period returns:
1. Buyer still dominate. So the next candle will most likely go up.
2. Selling pressure is greater than the dominance of buyers, then the next candle will likely fall
3. Seller continued to dominate. Then next candle still may go down.
4. The urge to buy more than dominance seller, the next candle is likely to rise.
Next you just feel the energy. If the candle moves fast it means the power of Candle is strong and if the candle moves slowly ,the power of candle is weak. In addition it should be noted that the position of the candlestick itself is located in a zone overbought, oversold or normal conditions.
When the chart is in oversold area and a candlestick get the urge to buy that big then the next possibility would be formed bullish candlestick. Vice versa