Time Shifting Candlesticks: A New Way to Analyze Stock Price Charts and Understand Various Candlestick Meanings
Time shifting candlesticks is a new and unique idea of my own that I used while trying to understand the meanings of various types of candlesticks along with comparing candlestick stock charting with more traditional line charting technique. Here I introduce the time shifting concept and in more articles present the examples to better understand the stock market behavior.
Many Candlestick Chart Patterns
Candlestick chart patterns are many. There are white, black, long, thin, doji, sunrising, three soldier, etc. types of candlesticks that are formed by the price changes in shares. Each type indicates a meaning to help a stock trader make a move while some can be confusing because of similar appearance.
How Did I Arrive at the Time Shifted Candlesticks?
While I was studying stock charts to understand how they make different patterns, I had discovered candlestick charting. After learning various types of candlesticks and their meanings, I tried to apply them in my trading. The basic candlestick white/black applied well but I had confusions with other types.
Then I had learned about finding trend reversals, buying stocks on pullbacks and finding trend confirmations. Most expert traders teach these through candlesticks or bar patterns. But not all charting services print the stock price charts in candlesticks. The most common chart available for any random stock that one can find is the line chart.
I had to apply same analysis on a line chart that I could do on a candlestick chart. I had to deduce same information from a line chart I could do from a candlestick chart. Then I started to study line charts to see how they are different from candlestick charts.
All of the information that is present in a candlestick chart is also there in line chart but not vice versa. Candlesticks are made with certain time periods enveloping stock price movements for that period but only capturing the first, high, low and last price of shares within that time period. The time period can be days, weeks or even minutes. I had also deduced based on this idea that any analysis done on EOD charts can be done on intraday as well and vice versa.
When the line chart has more information than a candlestick chart, why shouldn’t it be possible to use it better than Candlestick chart? At first I guessed candlestick chart eliminates noise (small up/down movements in a line chart) but I concluded any noise in a large time period is not so in small time period candlesticks. Given the time period of candles should not matter, a line chart is not only as good but also better than a candlestick chart given that it actually has more information than candlestick charts.
