Understanding Candlesticks & The Doji | The Passive Income Guru

This video tutorial explains to you candlestick analysis and the 400 year old strategy that is going to change your life.

Right? So I use a candlestick analysis because it's a 400 year old Japanese strategy that was used by the rice traders. It is one of the most successful trading strategies out there. Now, a lot of people don't use the candlesticks. What they do is they set their charts up using the candlesticks because it's got a nice graphic interface, it looks nice. But people don't understand the candlesticks. And the reason they don't understand is because they haven't taken the time to study it. And the reason they haven't taken the time to study it is because There are over 15 major Japanese candlestick reversal patterns. Now don't freak out. We don't have to learn all of them. But you know, if you think about it, it's only 15 patterns. So you know, when we went to school, we, we learned our 12 times table and 12. Each times table had 12 calculations, which works out to about 144 different calculations. So it's not that we can't do it. It's pretty much that we're a little bit lazy to do it and it's not that difficult to understand. So these are the different candlestick reversal patterns that are out there that will help you to make educated decisions. But what we're going to do is that we're only going to concentrate on one candlestick, which is the doji. Now, before I explain to you what the doji is, I want to explain to you what the candlesticks are. So let's talk about what a candle is and the information that is held inside a candle, which very few people understand and they know. So this is what a candle is. Now a green candle means that the currency is actually trending in an upward direction. And a red candle means that the currency is trending in a downward direction. So let's understand what the candle is. So this is where the candle opened for the day. Okay, the price, this is the price that people decided that they want to pay for this currency, commodity or share, whatever you're trading. So that is the price line over here. The currency or the index that you are trading, okay, basically went up during the day and then it closed over here. But during the day, before it closed, at the end of the day, this was the price came to a high over here. Then the price retraced down to this line over here. And then the price closed. Now when it Opened, you can see that there is a little tail over here, which meant that.

The index opened at this price over here. Then the price came down during the day. It may have gone up a little bit and then come all the way down, but this was the lowest point, the lowest price that that index had during the day. This is the highest price that it had during the day. This is the open and this is the close. Okay. And the body for a bull trending candle, that means the currency is going up. In other words, is bull and this is. It is in green. And if the currency is trending downwards, which means that people are going short, it is filled out in red. Now these little shadows, the other name for the shadow is called a wick. Okay. So there's lots of information available that you can see in these candlestick formations. Cool. So let's look at a doji now. A doji. Now that we understand what a candle is, we can now look at the different dojis.

That exist. So we basically work on a doji. All my analysis is based on the doji candlestick pattern. So a doji is basically when the open and the closed price are pretty much identical. Okay. It can be filled in with a little bit of green or a little bit of red. Okay. But not a lot. Okay. This is not a doji. This is called a spinning top. Okay. Where there is basically a square, where it's an oblong, we can call it a doji. And we can still use that doji as an indicator to make decisions whether we're going to buy or sell the currency. Okay. So what will happen is that the price opens, the process goes up, the prost comes down and. And then the price closes at the same place where it opened or very close to it where it opened during the day. Okay. This is a long legged doji. Now what is interesting to note is that the length of the wick or the shadows, now the longer the wick or the longer the shadow.

Basically tells you the strength of the indicator. So the longer the wick is, it means that that indicator is a very strong indicator and it shows that the currency is going to reverse. Okay. So when you see a doji anywhere on a graph, you know that the currency is about to change direction. Now, the reason that the prices opened and closed during the day is at the same point is because the seller sentiment of the traders has changed. People are confused. The traders are confused and they don't know the direction that the currency is going to go. And normally what happens is that you'll find that this doji appears on one of these moving averages, which is very, very interesting.

So let's have a look at a graph and show you how strong these doji signals are. Right. So I'm looking at the currency, which is the euro, Japanese yen, okay. And if we look at this section over here, you can see that there is a doji that is formed at the top of a trend. And straight after the doji, you can see that the price has changed. Okay. And the price has now gone down into a short position. Okay. And if we look at the bottom of the trend over here, you can see another type of doji. Let's show you what that doji is. That is, like, called a gravestone doji. Okay? And the gravestone doji indicated that the sentiment has changed. And there you have it. The price has then gone up. Here is another doji, and the price then comes down. And if we go back in time, you can see every time you see a doji, it is absolutely ridiculous how simple this is. So you could actually trade just on the doji and ignore all the other indicators. Now, the doji gives you about an 80 to 90%, 85 to 90% accuracy of whether the price is going to reverse. You may find a doji in an upward trend or a downward trend, and.

It'S. It could be a false positive. So sometimes, you know, it's not a hundred percent accurate, as you can see over here. So there's the doji, okay? And then the price went up a little bit, and then it sort of like traveled in a sideways motion, okay. Which indicated that there was a little bit of. Nobody really knew what was happening. So. So we were in an upward trend. It trended sideways, okay. And then it went up again. Now, normally, what happens when you see a doji is that that's when you need to act. Okay? But the doji is a very, very good indicator to tell you that the price is about to change direction. So let's just zoom in here. Okay, so here is another doji over here. It's also a gravestone doji, which it appeared the. The currency went up and then it traveled sideways over here. So here we are in an upward motion. There's your doji, which was an indicator to get out of this trade. Okay. And wait. Okay. To. To see what. What was going to happen. The price went down. Then you got your. Your gravestone doji. The price went up. There's another doji, then lots of doji, which tells you that there is indecision okay. Between the bulls and the Bears. And as you can see. Look at this, guys. You see can the doji is formed on a critical line. The 50. Okay. Which is the. The 34 moving average. Okay, here's the 200. Yeah. Is the. The 100. Sorry. And here's the 50. The purple is the 50. Okay. And then you can see lots of doji. So the more dojis they are, you basically tells you that the. The sentiment has changed and it's time to get out of that trade. Take profit. Wait and wait until you see what happens on the next candle. And then you can see the next candle. There was a massive, massive drop. Okay? So the doji is what you need to be looking for. And I'm now going to explain to you in the next video.

What to do when you see a doji in a long position and what to do when you see a doji in a short position. Before you go, if you'd like to earn a little bit of bitcoin, I give away 0.005 of a Bitcoin every single Friday to a random subscriber. If you'd like to earn that, there's a couple of things that you need to do. You need to subscribe to my YouTube channel. And how you do that is you just mouse over the video that you're watching, and in the bottom right hand corner of the video is a YouTube icon. Click that icon now. So please pause the video, go and do that step. Now, once done, you can come back to this video and resume the video. Now, if you're not already logged into your Gmail account, then you'd need to log into your Gmail account. Now, below the video that you're watching on YouTube there is a subscribe button. So what you do is you click on that subscribe button and then next to the subscribe button is a bell icon. You can click on the bell icon. So please pause the video, go and do those steps. Now, once done, you can come back to this video and resume the video. The next thing that you do is you need to give a thumbs up. And then in the comments section, which is over here, you can leave a positive comment with together with your bitcoin wallet address. Now you have to follow the steps exactly to be able to get that prize. So you need to subscribe, you need to hit the bell icon, you need to give a thumbs up, and you need to leave a positive comment with your bitcoin wallet address. Only then are you entered into the competition and are legible to win a prize if chosen. So if you want to win 0.005 of a bitcoin, I highly recommend that you follow those steps and then you'll be eligible to win that prize. So good luck and I hope you win that prize. And if you do, remember to invest it in a passive income stream and I'll see you on the next video. Video.