Technical Analysis | Candlesticks SMA and Fib Retracement

what's up everyone have you been dabbling in the stock market for the first time and pretending you know what's going on when you talk to your friends and co-workers we've all been there right well let's learn the basics of candlestick charts smas and fibonacci retracements to start building your knowledge so that you can make better swing trades or find better entry points on your longholds let's jump in [Music] let's start with the basics and that's going to be setting up whatever broker platform that you're using a lot of times brokers don't have charts set to represent candlesticks so the first thing you're going to want to change is that format this is different for each broker's platform so changing this will be different for everyone if you're using weibull it's this icon right here now that you have it changed how do you read this and what is it good for well candlesticks give a lot of information at a quick glance which is why they can be really useful there are also patterns that might signify certain things but i'm not going to get into those in this video anyway here's a candlestick now go like the video and subscribe we're done here here's the candlesticks i'm actually talking about but before i talk about its parts it's good to know that a candle represents a specific amount of time that you determine within the platform that you're using i usually have it set so each candle represents one day when i'm looking for long-term trends and support and resistance levels but that's just me so why do people like candles more than regular lines simple a candle gives you four pieces of information and a line chart just gives you one so let's break this down let's look at the green candle first so this is the body of the candle between here and here the body tells you where the stock opened for that time frame and where it closed for that time frame if the candle was green like this one that means the open was down here and the close was up here now there are also two other lines on each candle these are called shadows or wicks these indicate the high and the low for the time frame for that candle so at one point during this time frame the stock was trading all the way up here and all the way down here the only difference between green and red candles is determining where the open and close were if the candle was red that means the stock opened up here and then closed down here the wicks between green and red candles always indicate the highs and lows during that candle that never changes between green and red ones so remember if it's green that means the open price was lower than the close price and if it's red that means the open price is higher than the close price the wicks always tell you the high and the low for the stock while the candle was being formed now that we have that down let's move on to smas also labeled just ma by some brokers this stands for simple moving average and it means just what it says these are moving averages of a stock price over a specific amount of time using a 200-day sma might show a line that is angled up meaning in general over the last 200 days of trading that stock is in an uptrend if the line is angled down it means the opposite sometimes you might see a line that is flat that means the stock is trading consistently within the same range for that given time period just like candles smas will have a time frame there is no formula for what time frame you should use but i started out using some common ones which are 50 100 and 200 day time frame can matter since the 200 day may show an uptrend in the long term but a 20 day could show a downtrend in the short term one common way these moving averages are used is to signify support and resistance levels for a stock what i mean by this is that you may see a pattern of a stock price trading below a moving average and continually bouncing off of the average but not being able to break over it on the other hand you might see a stock trading above its moving average and continually bouncing off the average but not falling below it there are some trading strategies revolving around short-term averages crossing over long-term averages when a short-term average crosses above a long-term average like this it's called a golden cross and could indicate the trend is shifting upwards on the other hand you get what is called a death cross if a short-term average crosses below a long term average like this it could indicate the trend is about to shift down it is important to note that moving averages are based on historical data and will not tell you what the future will hold sometimes the market seems to adhere to the rules of its moving averages and sometimes it looks like it doesn't care at all now let's take a quick look at fibonacci retracement this can usually be found in the drawing tools for most brokers you'll have to draw this yourself and if done incorrectly will do you absolutely no good or could be really detrimental to your trades don't freak out though they really aren't that hard to draw so what is a fibonacci retracement and where did it come from anyways this retracement level stems from the fibonacci sequence also known as the golden ratio which originated back in the 13th century so it's nothing new this sequence is pretty much everywhere including body proportions art architecture and even the layout of seeds in sunflowers i could nerd out on this for days but let's move on to how to use it in finance a fib retracement when drawn can show you static points of support and resistance unlike a moving average that changes based on the price constantly moving up and down fib retracement lines don't move unless you redraw the data they are based upon a trader will connect two points that they find significant typically this is a high and a low of a major trend that is formed think back to our candlesticks to determine your high and low they are the wicks not the body of the candle if the trend is moving down you will select your high as the first point and your low is the second point if it's moving up start with your low and end with it at your high of the trend with that one trend line drawn there are now five other lines between your high and low these are numbers within the fibonacci sequence based on the start point and the end point of your original line when drawing a retracement after a significant price movement you can sometimes see the new support and resistance levels either at or near your fib lines these can be used by the trader to determine where to set stop losses place limit orders or determine entry for swing trades if a stock is consolidating around a particular fib and is currently in an uptrend holding above its moving average it might signal that the stock will soon break out to the next bib which you could use as your signal to sell since that could be the next point of resistance there are quite a few strategies around this tool and like any strategy in the stock market they won't have a hundred percent win rate so don't expect one and if someone offers you 100 win rate you should probably just run the other way remember it's also important to use more than one indicator when doing technical analysis you should never be relying on just one these tools can help you form your own opinions about where a stock is headed and can help you capitalize on market trends but they won't tell you the future always remember that i hope you guys learned something from this video so you can apply it to your next analysis on the next stock market play please like this video if it helped you at all and drop a comment with some of your favorite tools to use for technical analysis down below if you're looking for a brokerage account use my referral link to weeble in the description so you can get some free stocks when you open an account and deposit your first 100 follow the link in the description to the personify website so you can sign 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Channel: PersonaFi

Views: 410

Rating: 5 out of 5

Keywords: 200 day sma, 50 day sma, beginner trading, candlestick charts, candlestick charts explained, fib retracement, fibonacci retracement, fibonacci retracement strategy, fibonacci retracements, how to read candlestick charts, how to use fibonacci retracement, lets invest and trade together, ma crossover, moving average, moving average explained, moving average support and resistance, moving average trading strategy, simple moving average, stock market, technical analysis

Id: VB9rZble13A

Length: 7min 49sec (469 seconds)

Published: Tue Jun 22 2021