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+## candlestick charts
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+
+
+### tl; dr
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+
+
+* candlestick andlestick charts are used by traders to determine possible price movement based on past patterns, where each candle is a period of time
+* data rich trading analysis:
+ * time and price details
+ * show market high and low for a given time period
+ * open/close (body) high/low (wick) for a period of time
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+
+----
+
+### hammer pattern
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+
+* bullish pattern
+* sellers drove price lower during the day
+* buyers came in and the price finished higher
+* will continue tomorrow?
+* where are open, close, high, low?
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+----
+
+### shooting star pattern
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+
+* bearish pattern
+* buyers drove price high
+* sellers won and price fell lower
+* will this continue tomorrow?
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+----
+
+### bullish engulfing pattern
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+
+* bullish pattern
+* bullish candlestick "engulfed" the bearish candlestick
+* represents a strong reversal in the price action
+* will continue tomorrow?
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+
+----
+
+### bearish engulfing pattern
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+
+* bearish pattern
+* bearish candlestick engulfed the bullish candlestick
+* represents a string reversal in the price action
+* will continue tomorrow?
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+
+----
+
+### chart momenta
+
+
+
+* used in conjuction with candlestick charts
+* longer-term analysis of market movements
+* bullish and bearish patterns
+* used with day trading and swing trading
+* dont tell about longer term trends
+
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+
+
+##### double top
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+
+* bearish pattern
+* buyers tried wtice to push price higher
+* buyers unable to push price higher
+* price has no moment at this level
+* buyers run ot of steam
+* sellers are in the market
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+##### double bottom
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+* bullish pattern
+* sellers came in twice
+* price found support of buyers twice
+* buyers happy to pay up
+* sellers may run out and buyers need to pay more
+* buyers are in the market
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+##### asceding triangle
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+
+* charts never trade in a straight line
+* charts trend
+* highs and lows are important
+* consolidation is imporant
+* higher highs or higher lows is bullish
+* narrowing of a range can preceed a breakout
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+---
+
+
+### trends
+
+
+
+* we can't trade from patterns all the time, they are quite rare
+* trends patterns will guide us more often
+* patterns can be housed within trends
+* if we can find the trend, we can ride the trend for profit
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+
+##### asceding wedge - higher lows
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+##### desceding wedge - lower highs
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+##### consolidation
+
+* give us a strong area of trade where traders have been before
+* area in the chart moving sideways
+* we can use consolidation as a guide for our entry/exit points
+* sometimes preceed breakup
+* where buyers/sellers are at equilibrium and can't last forever
+* use these levels for our stop loss levels
+
+
+
+
+
+
+
+##### support and resistance
+
+* support and resistance are simply significant price levels
+* resistance can become support if a price breaks through that level in an uptrend
+* vice versa for a downtrend
+
+
+##### moving averages
+
+* SMA: arithmetic mean of prices over a given time period
+* EMA: weighted and give more importance to recent prices
+
+##### relative strength index (RSI)
+
+* plots the relative strength of the price compared to previous prices
+* momentum indicator
+* above 70: price is relatively expensive (overbought)
+* below 30: price is relatively cheap (oversold)
+* can't predict how the price will change in the future
+
+##### average true range
+
+* measure of daily price volatility
+* tell us the true amount the price could move in a given day
+* largest probably move for one day based on previous data
+* can be used to set our stop loss and give the trade some breathing room
+
+
+
+---
+
+### how to trade with trends
+
+
+
+1. Identify the market trends
+2. Ask where are the main areas of trade
+ - where is support and resistance?
+ - any chart pattern?
+3. Make your entry based on the daily trade action
+ - is the candlestick telling us that the trade will go in the direction of our trade?
+ - is the trade bullish or bearish based of candlestick patterns?
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+