From aa676dbcd42e129a33434c35993f85f7650c9d29 Mon Sep 17 00:00:00 2001
From: apo77yon <126520850+apo77yon@users.noreply.github.com>
Date: Sat, 25 Mar 2023 10:44:46 -0700
Subject: [PATCH] Update README.md
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* gives us data points to compare and contrast
* uses chart patterns, price data, trading volume and indicators
* allows us to follow a systematic strategy that can be improved
-* cannot predict the future
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----
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-### candlestick charts
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-* data rich trading analysis
-* time and price details
-* traders use candlestick chat patterns to antecipate the future
-* show market high and low for a given time period
-* each candle is a period in time
-* tells: 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 patterns
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-* 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
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-* 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
+#### 👉🏼 [reading candlestick charts](candlesitck_charts.md)
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-##### desceding wedge - lower highs
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-##### consolidation
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-* 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
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-##### support and resistance
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-* 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
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-##### moving averages
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-* SMA: arithmetic mean of prices over a given time period
-* EMA: weighted and give more importance to recent prices
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-##### relative strength index (RSI)
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-* 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
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-##### average true range
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-* 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
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----
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-### how to trade with trends
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-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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