A simple way of looking at stocksHello,
A simple way of looking at companies is by looking at their charts. The chart tells you a story the balance sheet might never communicate. It gives a story of who between the sellers & buyers is in control. First, let us understand what the candlesticks are and how they can be used
Candlestick Charts:
Candlestick charts are widely used in technical analysis to represent price movements in financial markets. Each candlestick typically shows the open, high, low, and closing prices for a specific time period (such as a day, week, or month). The body of the candlestick represents the price range between the opening and closing prices, while the wicks (or shadows) indicate the high and low prices during the period.
Green (Bullish) : The close is higher than the open. It suggests buyers are in control.
Red (Bearish) : The close is lower than the open. It suggests sellers are in control.
As per our chart this two candles are very key in completing the whole story. From The chart you will notice that the red candles are more than the Green candle while also being bigger. This already tells us that the trend is a Downtrend .
Conclusion :
We can only buy the stocks when the buyers begin to come into the market and the Green candles begin getting bigger & More aggressive. That way we are able to take advantage of the prices at the bottom and manage our Risk to reward ratios. Please keep in mind that the Fundamentals of the company are very important to understand before buying
Good Luck!
