Radiografía a las Velas Japonesas | Trading Efectivo


Financial Education Hello traders! Once again I am deeply
grateful for your participation in the polls and in the comments, likes,
visualizations of my videos, etcetera. As an educator, the truth is that
I am very happy to help and guide you in your careers
as trading professionals. Then you can click on
this card to select as usual the theme of the next video, and if what you
want to see or the topic you want to talk about is not among the options, I invite you to
leave it, write it in the comments, or review comments that
already exist to support the suggestions
of other visitors. Today’s theme with 32% of votes
are the Japanese Candles. When we observe the prices or
quotes of financial instruments in our trading platform we have
different options to do it, such as line graphs,
bar graphs and the preferred one by excellence, by most of
the traders, the Japanese Candles chart. But before delving into them,
let’s see a bit of history. In the 17th century the Japanese began
to use the Japanese candlestick chart for the technical analysis
of the rice trade. So the Japanese have centuries of
experience in the use of this tool. However, on this side of
the planet in the western world, we just began to know and
use them since the 90’s, thanks to Steve Nison who introduced
them to expose information on the values of assets
in our financial markets. In fact, the Bar chart and
the Japanese Candles chart contain and expose
the same information. Unlike the line chart
that is quite limited, but the candlestick chart show up
and stands out on the bar chart because it is visually easier
to understand and process. Both the bar graph and the candlestick chart
show the four main prices of a session. That is, the opening price, the maximum price,
the minimum price and the closing price. On the other hand,
the line chart can only be configured to draw
on one of the four prices. Although the closing price
of the session is typically used. The candles, however, to form a body with
color between the opening and closing, is much easier and attractive to the eye,
and facilitates its reading exponentially. When looking at a candle it is much easier
to identify the four main prices than when looking
at a bar chart. Trading platforms allow you to customize
the color of the candles, and we can literally
choose any color. But the most widely used color combinations
worldwide are white/black, or green/red, where in the first combination the white candle
is bullish and the black bearish. And in the second, the green candle is bullish
and the red candle is bearish. To better understand the reading
and interpretation of candles, let’s see how
a candle forms. We are on a positive
Cartesian plane, where the horizontal axis represents time,
and the vertical axis represents the price. So these, for example, are the days of
the month, and this is the price scale. Suppose we are talking
about the price of gold, and these have been
the previous sessions. So suppose that today
opens the market very close to the closing price of yesterday.
That is, at $1,200 an ounce. And so the first price of the candle is formed,
the opening price of the session. The minutes begin to pass,
and the hours, and the price changes according to the fluctuations
of supply and demand. If there is more demand
than supply, the price goes up, and if there is more supply
that demands, the price goes down. So when the price goes up and
stays above the opening price the body of the candle
is green or white. And this is getting bigger or smaller
according to the movement. So, let’s say that during the morning
there was a lot of demand, and the price went up and
rose to $1,205 per ounce. Then, around eleven o’clock in the morning,
the candle looked more or less like that, but after that time for some reason,
which we do not care at the moment, the demand started to fall and
the price started to fall… So, what happens with the candle is that
the body begins to get smaller and smaller but leaving a wake, a shadow,
better known as a wick or upper tail, which leaves a trace of how far
the price came before going down. That is, leave evidence
of what was the maximum price… $1,205. During the afternoon the offer increased a lot,
and the price falls below the opening price. Then, when that happens, the body
of the candle now changes to red or black depending on your color
configuration, and it gets bigger and bigger as the price
drops. However, shortly before
the end of the session, the demand slightly increased again
and the price rose a little. So the body is shrinking, but leaving
now a lower tail or shadow, so we do not forget what was
the minimum price of the session. At the end of the day the candle
looks like this, opening price, maximum price,
minimum price and closing price. This obviously in case
of a bearish session. For a bullish session it would be: opening price,
maximum price, minimum price and closing price. Always a bearish candle will have the opening
price above and the closing price down, and a bullish candle will have the opening
price below and the closing price up. In this case I have used
a daily session, but the sessions can be of the time what
you want, according to your type of analysis. The most common sessions are 1 minute,
5 minutes, 15 minutes, 30 minutes 1 hour, 4 hours, 8 hours,
daily, weekly and monthly. Now, as you can imagine, never one session
is the same as another. Sometimes the price fluctuates more and
sometimes less, sometimes it goes up a lot, and sometimes it goes up
a little, and so on. So candles can take various forms
with small, medium and large bodies. As well as upper and lower shadows,
large and small. And depending on the shape of the candles at
the end of the session they acquire different names and we will see
them below… But it is important that you understand
that the interpretation of these tools is a great advantage
for the experienced trader who can observe much more
that only the four prices. Understanding the market from a more
analytical and deeper perspective. For example,
if you see a large body, it is understood that there was strong market
pressure whether it is bullish or bearish, and small bodies indicate little activity
on the part of market participants. A large green or white body indicates
that buyers acted aggressively. And a red or black body indicates
a strong activity on the part of the sellers. On the other hand, the shades
or tails, whether inferior or superior, indicate that most of
the market activity took place far from the opening
and closing prices. And short shadows indicate that trading activity
was confined around these prices. A candle with a long lower tail
and a short top wick means that the sellers
pushed hard to the downside but then the buyers
acted more strongly and managed to return the price to
close the session near the opening. Spinning Tops They are candles with a really small body
and long shadows up and down. The small body shows little movement
from opening to closing, and the long shadows tell us
that both buyers and sellers were active during
the session. The color of the body is not really
very important but this candlesticks represents indecision between
Bulls and Bears. If you look a Spinning Tops
during an uptrend it typically means that
there are not many buyers left, and it is possible that
we will see a turn, it is possible that the Bears
begin to control the market and start a
bearish trend. If the Spinning Tops appears in
a downtrend, it is the opposite. That is, there are few sellers remaining
and the trend could begin to rise. Marubozu Candles A Marubozu candle has no shadows,
it is pure body. If the Marubozu Sail is bullish, the minimum
price is equal to the opening price, and the closing price is equal
to the maximum price. This candle shows that the Bulls maintained
control during the whole session, and generally marks the beginning
of a bullish continuation or bullish reversal
pattern. In the case of a bearish Marubozu candle,
the opening price is equal to the maximum price and the closing price is
equal to the minimum price. And as you may be imagining, its meaning is
exactly opposite to that of the bullish candle. It means that sellers had control from
the opening to the close, and can be interpreted as the beginning
of a new bearish trend or the reverse of
an uptrend. Doji This candle is produced when the session
closes at exactly the same opening price, or at least extremely close,
which results in a bodyless or almost imperceptible
body candle. The interpretation of this candle is that
there is no clear direction in the market, and by itself the Doji Candles
are neutral patterns. Gravestone Doji Being a Doji, it means that the price
of opening and closing are equal but in this case the candle has a
long wick, tail or upper shadow. Typically it reads as a signal
of a change in trend when it appears at
the end of an uptrend. Although it can also appear rarely
at the end of a bearish trend Dragonfly Doji This is exactly the same
as the previous formation. It typically appears
at the end of the downtrend, and its shape indicates that sellers
managed to push the price during the beginning of the session,
but then lost strength and buyers were able to control the price
by pushing it up strongly at the end of the session
to return it at the opening level. So it could mean that
a new uptrend is looming. Hammer and
Hanging Man The name of this candle comes perfectly,
it looks like a hammer. It is a candle with a long lower tail
and a small body on the top but changes its name according
to where it appears. That is, if it appears at the end of
a downtrend, it is called a hammer. And if it appears at the end of
an uptrend, it is called a hanging man. In both cases it usually marks
the end of the previous trend. Ideally it has no wick
or top shadow but it is still valid
even if it has a small one, and the color of the body
is not really important. Inverted Hammer
and Shooting Star This is the inverse pattern to the hammer,
it has a small body at the bottom and a long wick
or upper tail. It indicates that buyers controlled the price
at the beginning of the session but lost strength
towards the end, and the sellers were able
to return it to the starting point. The shooting star,
to be considered as such, must appear at
the end of an uptrend. And the inverted hammer acquires that name
when the pattern appears at the end of a downtrend. In both cases it represents
a signal of change of tendency, and it loses meaning when it appears
in the middle of the trend. The inverted hammer is less common and less
reliable than the shooting star, so it is advisable to wait for
a confirmation on the next candle. There are some more setups
but these are the main and most used in
technical analysis. The Japanese Candles are so powerful
that there are technical traders that only rely on this type of setups
to make their investment decisions. We at @TradingEfectivo
and at iFundTraders, We trade mainly by observing and
interpreting these trainings, and we rely on
the price position with respect to our
three favorite moving averages to complement our
investment strategy. You can get to know it thoroughly in the
Advanced Trading Course at level II, and it is the one we use in Oliver Velez’s
Self Start Trader funded accounts program. If you liked this video
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