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What Is a Basing Candlestick and How Traders Use Them?


Do you know what a basing candlestick is? No? Don’t worry; we are here to help you. There is no need to use Google Search in order to find out what a basing candlestick is.

However, before moving to a basing candlestick, let’s take a look at basing. Hopefully, you don’t have to read numerous articles in order to understand better what it is basing. Moreover, there is no necessity to spend your time in order to search for the “basing definition.”

So, what is basing? It refers to the consolidation in the price of a security.

Do you know what the resulting price pattern looks like? Interestingly, the pattern looks flat or somewhat rounded. As such, the price indicates that supply and demand are comparatively equal.

Do you know that there are two common basing patterns? Yes, there are common patterns, according to analysts. It is worth noting that common basing patterns can be utilized to employ different basing strategies to locate entry and exit points.

Basing and its importance


We need to mention that basing is a common occurrence after an asset is in a protracted decline or if the asset is in the middle of a major advance. The same applies to the market.

To put it another way, the volatility of security begins to diminish. For example, certain securities, such as stocks, can create a base that continues for a long period of time before the trend reverses.

According to technical analysts, basing is very important. Notably, this is particularly true in the case of stocks with a rapid decline before a relevant reversal can begin.

Now, let’s get back to a basing candlestick.

Don’t worry; you don’t have to be an experienced trader in order to understand what a basing candlestick is.

As a reminder, candlesticks are utilized in technical analysis. It is possible to find candlesticks on charts.

What you need to know is that candlestick bodies indicate the open, high, as well as closing price of a specific security, where the wider part is known as the real body.

Importantly, a basing candle or basing candlestick is a trading indicator body length is less than half of its range between the highs and lows. We are talking about less than 50% of its range. What’s interesting, these candlesticks tend to develop the base of the supply-demand zones.

World-famous stock exchanges

We can’t finish the article without mentioning the main stock exchanges. It is worth noting that there are over 60 stock exchanges. Yes, there is no lack of stock exchanges. However, not all of them are equally important.

Do you know which is the largest stock exchange? It is desirable to remember that the New York Stock Exchange (NYSE.) Unsurprisingly, world-famous companies trade on the New York Stock Exchange, including Apple and Amazon. As you know, Apple is one of the most popular technology companies in the world.

The world’s largest stock exchange is an auction-based market, and while the majority of trading takes place electronically, the New York Stock Exchange maintains a physical trading floor to this day.

And the second spot belongs to Nasdaq. The largest stock exchange after the New York Stock Exchange is Nasdaq. Interestingly, it employs a dealer-market system. The above-mentioned stock exchange was the first stock exchange to introduce electronic trading.

Let’s not forget about the London Stock Exchange. It is the largest stock exchange on the other side of the Atlantic Ocean, more precisely in Europe, which is not a bad result.

The Shanghai Stock Exchange is one of the most well-known stock exchanges, along with the New York Stock Exchange, Nasdaq, and London Stock Exchange. Last but not least, no stock exchange is larger than the Shanghai Stock Exchange in the country.

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