Analyze the market with candlesticks

The Appropriate Number of Candlesticks for Market Analysis

To effectively analyze the market with candlesticks, traders need to understand how many candlesticks are necessary for making informed decisions. The Jabal Ameli charting method emphasizes the importance of using the right number of candlesticks to gain insights into market movements and make strategic trading decisions.

Zooming In on the Market Chart and the Required Number of Candlesticks

In psychology, there is a concept called historical memory, which also applies to the world of trading. Traders need to understand how to utilize this concept to achieve the best results. To better understand this, let’s explain it with a few examples.

Imagine two people get married, and as you know, marriage is one of the most beautiful events in anyone’s life. In the first months and years of their marriage, the couple tries to surprise and delight each other on various occasions. These occasions might include their anniversary, wedding day, birthdays, Valentine’s Day, or other special events. However, after a few years, they gradually and unconsciously start forgetting these dates one by one. They might forget their first meeting anniversary, then their wedding date, and later even when Valentine’s Day is. After a while, they might even forget each other’s birthdays.

How Candlestick Patterns Predict Market Movements

Candlestick patterns are a great tool for predicting short-term price movements. By studying how specific patterns develop and behave, traders can anticipate potential market direction and time their trades accordingly. The patterns act as signals for possible trend reversals or price continuations

Introduction to Candlestick Patterns

Candlestick charts are one of the most essential tools for technical analysis. By displaying the open, high, low, and close prices within a specific timeframe, candlestick charts provide valuable insights into market behavior. This method of analysis allows traders to quickly interpret market sentiment and make more informed decisions

Understanding Market Sentiment Through Candlestick Charts

Candlestick charts are powerful visual representations of market sentiment. Each candle reflects the balance of buying and selling pressure during a specific period, helping traders understand whether the market is bullish, bearish, or in a neutral phase.

The Same Principle Applies to Life's Bitter Issues

The same principle applies to the bitter aspects of life. For example, when someone loses a family member, during the first week, they may not even sleep or eat properly. Gradually, after about 40 days, it may be possible to make some light-hearted jokes with the grieving person to help them shift away from their sorrowful state. After a year, the grieving person might even make jokes with others that they wouldn’t have before the loss. This doesn’t mean that the deceased was no longer dear to them, but as time passes, the absence is more deeply felt. However, because the event has faded in the person's historical memory and new events have arisen, the importance of the loss diminishes.

The Impact of Historical Memory on Trading Decisions

The trading decisions of market participants are also influenced by historical memory because every trade involves a human, and all humans have historical memories. To make better and more profitable trading decisions, we must leverage this concept. Every event that has happened to us up until now is important because it exists in our memory and influences our decisions and actions.

According to historical memory, we need to determine how many candlesticks from the market’s past are necessary for making a good trading decision.

The Jabal Ameli Chartical Method and the Required Number of Candlesticks

In the Jabal Ameli chartical method, the number of candlesticks needed is generally around 60-70. This number can vary depending on the display resolution, but often, just 20 candlesticks can provide all the necessary information. For instance, it can help determine whether a trade will occur in the market, whether we will be a buyer or seller if a trade happens, and how to strategize the exit if a trade is made.

Thus, in the Jabal Ameli chartical method, 20 candlesticks are often sufficient for market reading and trade identification, but the maximum number needed is around 60-70 candlesticks. Paying attention to more than this number is impractical, as it leads to relying on information that may no longer be relevant to the market participants who created the price movements and could impact the market. Trading based on such excess information is not logical.

Adjusting Zoom Level for Market Analysis

In platforms like MetaTrader, the zoom level should be adjusted so that the market is visible clearly and adequately. Candlesticks should not be too large to create unnecessary excitement with every minor market movement, nor too small that the shadows and details become hard to see.

Focus on Relevant Candlesticks for Successful Trading

In the Jabal Ameli chartical method, success in trading relies on focusing on sufficient and relevant data. Traders should focus on the historical patterns and information that align with their current strategies. Relying on outdated or irrelevant information can lead to poor trading decisions.

By focusing on a limited number of candlesticks (usually between 20 to 70), traders can ensure they are working with up-to-date and relevant market data. This approach allows for more accurate, efficient, and profitable trading decisions.

Most popular articles
fixed profit target
Fixed Profit Target: A Guide to Risk Management in Trading In trading, a Fixed Profit Target: A Guide to Risk Management in Trading is essential for managing both profits and risks effectively. fixed profit target is a crucial strategy in trading that helps traders manage risk effectively. By setting a predetermined level for profits and losses before entering a trade, traders can make clearer decisions and avoid emotional reactions. This approach not only provides a clear goal for each trade but also ensures that risk management stays a priority, helping ...
Trading using movements
Trading Using Movements: A Probabilistic Approach to Market Trends In the world of trading using movements, understanding probability theory is key to making informed decisions. This principle suggests that the more an event occurs, the less likely it is to repeat soon—and this logic can be effectively applied to market trends In the world of probability theory, a fascinating principle suggests that the more an event occurs, the less likely it is to repeat in the near future—and vice versa. This concept has practical applications in many fields, including financial ...
psychological journal
The Importance of Keeping a Trading Journal for Success Every trader aspiring to succeed in the market must understand that consistent journaling is an essential practice for achieving long-term success. Trading without a journal is like navigating without a map—without it, it's difficult to identify strengths, weaknesses, and areas for improvement. By maintaining a journal, traders can uncover patterns, refine strategies, and ultimately enhance their trading performance. Why Should Traders Keep a Journal? A trading journal offers numerous benefits, such as: Self-Assessment: It helps traders pinpoint both their strengths and ...
Benefits of Reviewing a Trading Journal
Why Keeping a Trading Journal is Essential A trading journal is one of the most powerful tools for self-improvement in trading. By documenting trades, emotions, and strategies, traders can refine their decision-making process, enhance discipline, and improve overall performance. Here are the key benefits of maintaining and reviewing a trading journal: 1. Self-Reflection and Emotional Awareness Keeping a trading journal allows traders to reflect on their emotions before, during, and after each trade. This helps in identifying emotional triggers such as fear, greed, or frustration that might influence trading decisions. ...
Latest articles
How Big Money Enters and Exits the Market (Key Signals for Traders)
Successful traders aim to minimize risk by identifying factors that lead to losses. One critical skill is recognizing how "big money" (institutional or smart money) enters and exits the market—a key driver of price movements. Identifying Big Money Entry In the chart example provided: Between points A and B, market liquidity is low, particularly on the sell side. The downtrend weakens as traders' psychological and financial commitment declines (C > B > A). Fewer aggressive sellers prevent further significant price drops. Key Signals of Money Entering the Market Reduced Selling Pressure – The slope ...
Mastering Candlestick Analysis: A Trader’s Guide
Understanding Candlesticks in Trading Candlestick analysis is the cornerstone of price action trading, offering traders a visual roadmap of market psychology. Each candlestick reveals critical data—open, close, high, and low prices—within a specific timeframe, whether minutes, hours, or days. By mastering candlestick analysis, you can decode buyer/seller battles and anticipate trend reversals or continuations with precision. Candlestick charts are a fundamental tool for traders, providing insights into price movements over specific timeframes. Each candlestick represents a set period—whether it’s one minute, one hour, or one day—depending on the selected timeframe. Open Price: ...
Essential Aspects of Trading: Key Principles for Consistent Success
Becoming a successful and consistent trader requires discipline, a structured approach, and adherence to fundamental principles. Many traders fail not because of a lack of knowledge but due to poor habits, emotional decision-making, and inadequate preparation. This guide covers the critical aspects of trading, from setting up a proper workspace to managing psychological challenges. Setting Up a Professional Trading Environment Choosing the Right Trading System A trader must have a dedicated device (laptop or desktop) for trading. Mobile trading is discouraged due to limited functionality and higher risk of errors. Security is crucial—ensure antivirus protection and ...
Mastering Position Sizing: When and How to Increase Trading Volume for Maximum Profits
Introduction: The Critical Decision of Adding to Positions Increasing trading volume is one of the most critical yet misunderstood decisions in active trading. When a trade starts moving in your favor after initial hesitation, many traders face the temptation to add to their position—but is this strategic or reckless? This guide reveals when increasing trading volume works, when it backfires, and how professionals scale positions without amplifying risk In trading, one of the most challenging decisions is determining whether to increase position size after initial entry. Many traders face this dilemma: "The market ...