In this lesson, we will talk about candlestick charts, which are essential for trading. This is a widely used technical analysis tool in financial markets (such as cryptocurrencies, stocks, futures, etc.).

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🤔 What is a candlestick?

The essence of candlesticks lies in using four data points: opening price, closing price, highest price, and lowest price, to describe price changes in the market over a certain period of time. It can reveal the overall trend of the market and reflect changes in market sentiment.

A period of price fluctuations ultimately summarizes into a candlestick.

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💡 Basic structure of candlesticks:

1. Body:

- Indicates the price difference between the opening and closing prices.

- The length of the body directly reflects the strength of bulls and bears.

2. Shadows:

- Includes upper and lower shadows, representing the highest and lowest prices in the market, respectively.

- The length of the shadows directly reflects the struggle between bulls and bears.

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📊 Candlestick time periods:

Each candlestick represents a time period (for example: 1 minute, 1 hour, 1 day, 1 week, etc.). You can choose the appropriate time period based on your trading strategy, for example:

- Short-term traders: tend to use 1 minute, 5 minutes, 1 hour candlesticks.

- Long-term investors: tend to use 1 day, 1 week, 1 month candlesticks.

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🛠️ Common candlestick patterns and signals:

📌 Summary table: Candlestick structure and significance

If you are familiar with the structure of candlestick patterns, it will later evolve into a commonly used naked candlestick trading strategy.