Weird Week?

Hi Shoppers,

This is kind of a weird week, right?

We just finished Christmas … Gifts are opened and bellies are full.

Some of us are hungover.

Some of us are just worn out.  

But we’re happy.

It was fun … all the planning, shopping, wrapping, cooking and celebrating together. (As best we could this year.)

The last week of the year, a lot of us are on “vacation” or have shorter hours and less work.

For those of us working, everything is kind of on the light side.

We all need a break and some downtime before we even begin to think about those resolutions. Yikes!

And we still have New Year’s Eve to celebrate! 

With that in mind, I don’t want to be too heavy or give you too much to think about.

But I did want to share something you can carry into the new year …

So here’s a short and sweet (and useful!) primer on the Japanese Candlestick …

Japanese candlestick technical analysis was developed by Munehisa Honma, a (legendary in some circles) rice merchant, and has been around for centuries. 

However, it only arrived in the US in the early 1990s.

While the candlestick chart is financial, it actually helps track human sentiment, psychology and actions.

They are mainly used to detect a change in trend or sentiment and display that emotion visually.

Patterns formed by the candlesticks can help forecast short-term price direction and provide traders with an extremely helpful tool when making decisions.

Let’s take a look at the basic structure of a candle and what it’s telling us.

The red area is the body and represents the difference between the opening price and closing price.

The line at the top is the upper shadow and shows the highest price traded.  

The line at the bottom is the lower shadow and shows the low for the session.

Candlesticks are color-coded to represent an up or a down session.

Red is down … Green is up. (They can also be black and white.)

A red candlestick is formed when the stock closes below the opening price, telling us the sellers had control.  

A green candle forms when the buyers take over, meaning the stock closed above its opening price.

A candle with little or no body occurs when buyers and sellers were present in equivalent amounts. No one side took over.

Candles can represent days, weeks, or even five-minute intervals.  

There are many different setups to learn to spot on a chart …

And I’ll teach you those indicators in future writings.

For now, let’s just keep it simple and this “weird week.”

Thanks for reading … See You Next Tuesday!

Licia Leslie

DISCLAIMER: FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. The materials presented from Option Pit LLC are for your informational and educational purposes only. Neither Option Pit LLC nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational and educational purposes intended is at the user’s own risk. 

DISCLAIMER: OPTION PIT LLC IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER. Option Pit LLC is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented materials. Specific trading ideas or strategies discussed in the presentations or materials are entirely illustrative and do not constitute the solicitation of a transaction (or transactions) or a recommendation to execute a particular transaction or implement a particular trading strategy.

DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions.

Leave A Response

* Denotes Required Field