There are many misconceptions when it comes to determining
whether a candlestick bar is truly bullish or bearish. So far
candlestick bars analysts are doing all sort of things in the financial
markets. The time has come to refute all those wrong arguments,
and put candlestick technical traders on the right path. Be sure to
read this article in full, and begin to quickly improve your candlestick
bar analysis today. Get started.
Image shows candlestick bars chart
Generally, a bullish candlestick bar is the bar that closes above the
However, a very bullish candlestick bar is the bar that closes near
the high. Note that a long candlestick bar that closes near the high
is more bullish than another
bar that also closes near the high.
Bearish Candlestick Bars That Are Very Bullish
Generally, a bearish candlestick bar is the bar that closes below the
opening price. Nevertheless, a candlestick bar that is theoretically
bearish is bullish if it closes near the high or at least above its median
line (especially long tail candlesticks at a key level).
Note that those strange bullish candlestick bar often appear at a reliable
support level where there is a high demand to buy the asset.
Though, the price plummeted from the opening price, it steadily recovered
and closed near the high or above its median line. One may say that the
initial sellers were kicked out of their bearish positions. Though, the
candlestick bar did not close above the opening price, the winners at the
end of that period are bullish traders.
Bullish Candlesticks That Are Intrinsically Bearish
This is usually the case at the price target levels or key resistance levels
when a candlestick opens then rises to form a long range candlestick bar,
but closes near the low (or at least below its median line).
Warning: When one is dealing with a candlestick pattern or another pattern,
the validity of the pattern is relative to the place where the pattern is formed.
If one is analysing a pattern, and one forgets that warning, one will be going
round and round.
The pattern that I am talking about in this paragraph must occur at a resistance
or bullish price target level.
On can deduct from that candlestick bar that the real winners on that day are
bearish traders because the price rose (and has an extended range) then
to the bearish pressure and closed near the low.
Case For Long Range Candlestick Bars
Initially, a long bearish candlesticks that close above their median lines are
bullish to a certain degree depending on their locations.
Remember that the location of the candlestick bar will determine the validity
one's candlestick bars analysis.
On the other hand, initially bullish candlestick bars that close below their
median lines are practically bearish depending on their relative positions
to key support and resistance levels.
Other Candlestick Bars One Must understand
Practical Use Of A Candlestick Bar
In practical trading, professional technical traders draw the high, low and
median line of a candlestick bar. Those levels especially on the weekly,
monthly, quarterly and yearly charts are essential key price levels
They also use the opening and closing price levels on the quarterly and
Note that amongst those key support and resistance levels, the most
influential (and popular) is the median line.
When one is analysing a candlestick bar, one must check its location. Is
it at a support or resistance level?
One ought to compare also the closing price in relation to the median line
because the median line divides the range
of the candlestick bar into two areas (bullish above but bearish beneath).
One must remember that candlestick
bars that close near the high are practically bullish even if theoretically they
are bearish. In contrast, a candlestick
bar that closes near the low is to a certain degree more bearish even if it
closes above the opening price.
To avoid candlestick bars analysis mistakes, it is crucial to check where the
bar is. By defining whether the bar is
more bullish than bearish and vice versa, one will be able to interpret
candlestick patterns more accurately, and perform
a better technical analysis.
I hope this will open up your understanding of candlestick bars, and help
you become a better candlestick bar analyst.
I delight in sharing more practical trading tips and tricks, and hopefully this
has been useful to you.
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We wish you the very best in your candlestick bars analysis.
Thank you for reading.
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Its objective is to correct all past misconceptions about candlestick bars
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