Hello everyone. Today I present two, one of the most important formation on the market and how to read candles.
Hammer
This is one of the strongest and most famous candle formations.
The candle is usually green, although it is red. The highest candle power can be observed in the daily chart. At first we see supply because the price goes low, later came the demand. The price closes near the opening price. This is also the most common formation on the market. It is best when it appears on the wells, because this formation on the hill has a completely different character. The bigger the fall, the better. It often happens that the candle opens with a gap. A small wick is allowed from above. Confirmation will be a growing volume.
Falling star
Formation reversal of the upward trend. Its appearance may announce a decline. It occurs after a long upward trend. People on the market do not want to buy and the price starts to fall. The new candle opens most often with a gap, and then the course falls and forms a long upper shadow and short body. In the falling star there is no lower shadow (minimum is the level of opening or closing of the candle). Confirmation of the formation are dealings with the price below the corps in the next candle.
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