Japanese Bitcoin Candlesticks Patterns Analysis

Japanese Candle Patterns

Brief History

Candles were developed in 18th century by a famous rice trader known as Homma Munehisa to give the overview of opening, high, low and closing market btcusd crypto price over a particular given period of time.

They were utilized by the legend rice trader to predict future market bitcoin prices. After dominating rice market, Munehisa then eventually moved to the Tokyo Exchanges where he then gained a huge fortune using this analysis. It's said that He made over 100 consecutive winning trades.

Types of Bitcoin charts

There are 3 types of charts used in Bitcoin: Line, bar and candlesticks.

Line - plots a continuous line connecting/joining closing bitcoin prices of bitcoin crypto.

Bars- displayed as sequence of OHCL bars. OHCL represents OPEN HIGH LOW and CLOSE. The Opening btcusd crypto price is displayed as a horizontal dash to the left and closing bitcoin cryptocurrency price as a horizontal dash to the right.

Main disadvantage of a bars is that it's not visually identifiable, henceforth most traders do not use them.

Candlesticks - these use the same bitcoin price data as bar crypto charts (open, high, low, and close). However, they are represented in a much more visually identifiable and appealing way which looks like a candlestick that has wicks on both its ends.

How to Interpret and Analyze

Rectangle section is called the body.

The high and low are described as shadows & drawn as poking lines.

The color is either blue or red

(Blue or Green Colour) - Crypto Prices moved up
(Red Color) - Bitcoin Prices went down

Most trading platforms such as the MT4, use colour to mark direction. Colours used are blue or green: when btcusd crypto price moves up, red: when btcusd crypto price moves down.

Candles Vs. Bar BTC USD Crypto Chart

When candles are used it is very easy to see if the bitcoin price headed up or down as compared to when a bar Charts are used.

The Japanese techniques also have very many setups that are used to trade the BTCUSD CryptoCurrency market. These patterns have different trading analysis explanation & the most frequent are:

Marubozu BTC/USD Crypto Candle Pattern and Doji BTC/USD CryptoCurrency Candle Pattern

Spinning Tops

Reversal Setup Setups

Inverted Hammer BTC USD Crypto Candle Pattern and Shooting Star Bitcoin Crypto Currency Crypto Candle Pattern

Piercing Line Crypto Candle Pattern and Dark Cloud Cover BTC USD CryptoCurrency Candle Pattern

Morning Star Candle and Evening Star Candles

The above patterns is what makes the Japanese candlesticks popular among traders and it's why this type of analysis are most often utilized in analyzing the bitcoin market. The analysis for these pattern setups in bitcoin trade is the same as that one used in stocks trading.

Drawing These Charts on the MT4

To draw these on the MT4, select the charts drawing tools within the "MetaTrader 4 Tool-Bar" - shown below.

To view this toolbar on MT4 navigate to the 'View' Next to file on the top-left corner of MetaTrader 4 Software, Click 'View', Then Click 'Tool Bars', Then check 'Charts' Button. Above toolbar will appear.

Once the above tool-bar, pops up you can then select the type you as the trader want to convert to, If you as a trader want to view using the bar chart format, click bar tool button such as shown above, for line format click the line tool button, for Japanese candlesticks format click the "candlesticks tool button".

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