Japanese Bitcoin Candlesticks Patterns Analysis
Japanese Candle PatternsBrief History
Candlesticks go way back to the 18th century, invented by the rice trader Homma Munehisa. They give you a quick look at the open, high, low, and close of the BTCUSD crypto market over any time period.
A famous rice trader used these methods to forecast bitcoin prices. He ruled the rice markets, then hit Tokyo exchanges. There, he built a fortune with over 100 wins in a row.
Types of Bitcoin charts
There are 3 types of charts used in Bitcoin: Line, bar and candlesticks.
A line is plotted to create a continuous representation connecting closing Bitcoin prices.
Bars- shown as a line of OHCL bars. OHCL means OPEN HIGH LOW and CLOSE. The bitcoin dollar price when trading starts is shown as a line on the left and the bitcoin digital money price when trading stops is shown as a line on the right.
Main disadvantage of a bars is that it's not visually identifiable, henceforth most traders do not use them.
Candlesticks use the same bitcoin price information as bar crypto charts (open, high, low, and close). But, they are shown in a way that's easier to see and more appealing, looking like a candle with wicks on both ends.
How to Interpret and Analyze
Rectangle section is called the body.
The high and low are illustrated 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 MT4, use color to show direction. The colors are blue/green for when btcusd crypto price goes up, and red for when it goes down.
Candles Vs. Bar BTC USD Crypto Chart
If you use candles, it's simple to tell if the bitcoin price went higher or lower, unlike when bar charts are what you use.
The ways of doing things in Japan also have many different arrangements that are used when trading in the BTCUSD CryptoCurrency market. These arrangements have different ways of figuring out trades, and the ones that happen most often are:
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
Use MT4 drawing tools from the toolbar to add these lines on charts, as shown.
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 tick the 'Charts' Button. Above toolbar will appear.
Once the toolbar appears, you can select your preferred chart type. For bar charts, click on the "Bar" tool button. To view in line format, click on the "Line" tool button. For Japanese candlesticks format, click on the "Candlesticks" tool button as demonstrated above.
Get More Lessons & Topics:
- How Do I Analyze Continuation Setups?
- How to Analyze 38.2% Fib Pullback Level on BTC USD Charts
- Rainbow Charts BTCUSD Technical Indicator Analysis Trade
- How Do I Analyze Bullish Bull Flag Patterns Analysis?
- BTC USD Hanging Man Candlestick Pattern Lesson
- How to Learn BTCUSD for Free Tutorial Guide Training Website
- How to Interpret and Analyze BTC USD Charts Analysis
- Where to Learn Techniques/Methods of Trade BTC USD Crypto
- How to Install and Open the MT5 Bitcoin Smart Phone BTC USD Trade App
- BTCUSD Analysis Tools Used in Day Trading Bitcoin Analysis
