Japanese Bitcoin Candlesticks Patterns Crypto Technical Analysis
Japanese Cryptocurrency Candlestick PatternsBrief History
Candlesticks were developed in the 18th century by the legendary rice trader called Homma Munehisa to give an overview of opening, high, low and closing market btcusd price over a given period of time.
They were used by the legendary rice trader to predict future market bitcoin prices. After dominating the rice market, Munehisa eventually moved to the Tokyo exchanges where he gained a huge fortune using this analysis. He is said to have made over 100 consecutive winning trades.
Types of Bitcoin charts
There are three types of charts used in Bitcoin: Line, bar and candlesticks.
Line - plots a continuous line connecting closing bitcoin prices of bitcoin crypto.
Bars- displayed as sequence of OHCL bars. OHCL represents OPEN HIGH LOW & CLOSE. The Opening btcusd price is displayed as a horizontal dash on the left and closing btcusd price as a horizontal dash on the right.
The main disadvantage of a bars is that it is not visually appealing, therefore most bitcoin traders don't use them.
Candlesticks - these use the same btcusd price data as bar crypto charts (open, high, low, and close). However, they in a much more visually identifiable way which resembles a candle with wicks on both ends.
How to Interpret
The rectangle part is called the body.
The high and low are described as shadows and drawn as poking lines.
The color is either blue or red
- (Blue or Green Color) - Bitcoin Prices moved up
- (Red Color) - Bitcoin Prices moved down
Most trading platforms like the MT4, use colors to mark the direction. colors used are blue or green; when btcusd price moves up, red; when btcusd price moves down.
Candlesticks Vs. Bars
When candlesticks are used it is very easy to see if the btcusd price moved up or down as opposed to when a bars are used.
The Japanese techniques also have very many formations that are used to trade the Bitcoin Trading market. These patterns have different technical analysis interpretation and the most common are:
The above patterns is what makes the Japanese candlesticks popular among technical traders and it is why this type of analysis are the most widely used when it comes to analyzing the btcusd trading market. The analysis for these pattern formations in bitcoin trading is the same as that one used in stocks trading.
Drawing These Charts on MetaTrader 4
To draw these on the MT4, select the charts drawing tools within the "MT4 Toolbar" - shown below.
To view this toolbar on MetaTrader 4 go to "View" Next to file at the top left corner of the MT4 Platform, Click "View", Then Click "Toolbars", Then check the "Charts" Button. The above toolbar will appear.
Once the above toolbar, appears you can then select the type you want to convert to, If you want to view using the bar format, click the bar tool button as shown above, for line format click the line tool button, for Japanese candlesticks format click the "candlesticks tool button".
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