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Candlestick patterns represent market sentiment from "summary" of Japanese Candlestick Charting Techniques by Steve Nison
Candlestick patterns are not just random formations on a chart; they actually represent the collective psychology of market participants at a particular point in time. These patterns provide valuable insights into the emotions and sentiment driving market behavior. By studying these patterns, traders can gain a deeper understanding of market dynamics and make more informed trading decisions. Each candle on a chart tells a story about the battle between buyers and sellers. The shape, size, and color of a candle convey important information about the balance of power between bulls and bears. For example, a long green candle indicates strong buying pressure, while a long red candle signals strong selling pressure. By analyzing the patterns formed by consecutive candles, traders can identify potential trend reversals, continuations, and other important...
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