Discover these potential risks and limitations of candle lists that are unknown to many traders!

The candlestick list is a visual representation of the fight between the bulls and the bear that takes place in the market. It takes time to carry out this struggle. There may not be signs that can be properly interpreted and traded in the short term used to scale candlestick patterns and other day trading strategies.

Over the last decade e-commerce has become very popular. What this means is that a large volume of trade takes place outside the usual market hours. This negotiation can cause patterns that do not reflect the entire picture to appear on a candlestick chart.

For example, stocks are traded on the NYSE. The NYSE officially opens at 9:30 a.m. to trade the EST. ABC’s open price is $ 60 per share. However, this stock, which was trading on the electronic network in the 59 hours prior to the market, was worth $ 59. Now the opening of the NYSE is not a true reflection of where that stock was traded that day.

What this means is that the opening recorded on the candle board is not accurate. Now, suppose the ABC stock never drops to $ 59 during the day. So the low candlestick chart may not be an accurate representation of the price action of the day.

So these e-commerce charts are somewhat inaccurate. Match the candle diagrams for a short time that are not very accurate. These charts are good for periods of 1 hour or more. Simply save these two limits in the candlestick diagram.

A candlestick chart is a powerful tool in the hands of an experienced trader. When an experienced trader combines these charts with technical indicators, this combination can generate very accurate trading signals.

Candlestick patterns can be a good signal to buy and sell when combined with a technical indicator like RSI or stochastic. There are simple and complex candlestick patterns. Single candle candle patterns are easy to spot, however, two-stick and three-candle patterns don’t appear quite often, but when they do, they are very accurate and can be very profitable to trade!

Yahoo Finance is now a great free resource that you can use to create candlestick charts for any stock by including the stock symbol. You should play with the options available in Yahoo Finance. This will help you learn a lot of new things about candle charts.

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