Crypto Academy / Season 3 / Week 2 - Homework Post by @chiwill
In the world today cryptocurrency is no longer new to the people and the trading of cryptocurrency is something else whereby everybody wants to be involved but is not something so easy, so to say.
Trading cryptocurrency can be liken to emotion because it can be affected and can be read through the candlestick. It also involves technical analysis which uses indicator, candlestick and .......
Explain the Japanese Candlestick Chart.
DEFINITION OF TERMS:
🔸Japanese candlestick was developed by a Japanese rice trader named Munehisa Homma. The Japanese candlestick is a type of price chart or technical analysis used in knowing the movement of price stock in a chart and it also helps to indicate the opening, closing, high and low price point for each given period.
🔸 Candlestick is a tool used to know more details and accurate information about price movements which also have different colours. This is also what the traders used in knowing the movement of price.
There are four components of candlestick which are:
- The open
- The close
- The high
- The low
And there's a part of the candlestick called the REAL BODY.
Describe any other two types of charts.
Now there are many types of chart which are line chart, bar chart and line chart.
This is a type of chart that some of the traders used in trading and used in identifying up and down trending. Line chart has its trading volume information on the vertical and corresponding time period on the horizontal axis.
In preparation of line chart there are two steps. The first step is plot a graph using a particular date and plot the closing price as on that date. And the second is you will have to put a dot on the chart in sure a way that it is above the concerned date and alongside the corresponding price.
This other chart is more complex than line chart and it consists of multiple price bars. Traders use bar chart to analyze trending and know price movements. It also have open, high, low and closing (OHLC) price.
In your own words, explain why the Japanese Candlestick chart is mostly used by traders.
Today, because of the technicality and analysis in trade, traders prefer Japanese candlestick:
to analyze because of the components and features. These components are opening, closing, high and low price point shown throughout the period the trader specifies.
to monitor price movements and it's gives a quick analysis of a price movement.
it gives an detailed and accurate information about price of stock.
it helps the trader to identify who is in control of the market either the buyer or the seller
The Japanese candlestick is the most well known and popular trade chart among traders. It is mostly traders especially technical traders.
Describe a bullish candle and a bearish candle identifying its anatomy?
The bullish candle and the bearish candle are the two basis candlestick and they are considered or referred as market conditions.
This indicate a price increase. When the close is higher than the open its said to be bullish.
This indicates a price decrease. When the close is lower than the open it's said to be bearish.
A good understanding of the chart gives the trader information about the market. The chart keeps the buyer and seller in a good relationship and helps to monitor the price in the market.
Japanese candlestick chart helps the trader to know the price movements and know the trendings. The Japanese candlestick chart helps the trader to control his assets and glance into the market price. It also enables the trader to know a price without a timeframe.
Thanks for your time and reading through.