Basics of Candlestick Chart Patterns
One of the traders accessories in developing formulas of candlestick charts are the candlestick patterns. They are quite indispensable when one is engaged in the creation of basic systems that help indicate a trend formation so you can start trading.
Candlesticks have a structure that displays the open, high, low and closing price of a currency, stock or commodity over a duration. You can typically mark the stretch of time that you want to show.
5 minutes is routine for day traders but you might select 15 minutes in some instances. For longer duration trading you can choose longer periods.
The candle body signifies the disparity of the close and open points. If it's green/blue (for colored charts) or white then the lower boundaries of the rectangular body is the open and price went higher during the particular period. A red (for colored charts) or black indicates the top boundary is the opening price, while the price fell during that period.
The wick is the title given to the vertical lines that customarily stick up from the top and down from the bottom of the candle body. The top of the upper segment of wick is the highest position that the price ever achieved during the period. The bottom of the lower wick is the low.
The boon of this method of analysis is that the trader can straight off see whether prices rose or fell over the period. A white or green candle reveals a rising price or bearish tendency and a black or red candle illustrates a dropping price or bullish tendency.
Aside from this, the high and low compared to open and close prices are directly evident. Then you may have an absolutely solid candle without a wick.
It's called a Marubozu pattern. Prices never went greater or less than the opening and closing prices in this scenario.
The opening was the high price & the closing was the reduced price if the candle was red or black. The low price is the open and the close would be the high price when the candle is green or white.
A lengthened body means a relatively consistent movement either up or down. A lengthy wick detected on either bottom or top would imply a reversal.
For accurate trend index a candlestick needs to be studied in conjunction with the others that preceded it. Then you can fabricate more complex candlestick patterns indicating the plausible trends to come. - 23226
Candlesticks have a structure that displays the open, high, low and closing price of a currency, stock or commodity over a duration. You can typically mark the stretch of time that you want to show.
5 minutes is routine for day traders but you might select 15 minutes in some instances. For longer duration trading you can choose longer periods.
The candle body signifies the disparity of the close and open points. If it's green/blue (for colored charts) or white then the lower boundaries of the rectangular body is the open and price went higher during the particular period. A red (for colored charts) or black indicates the top boundary is the opening price, while the price fell during that period.
The wick is the title given to the vertical lines that customarily stick up from the top and down from the bottom of the candle body. The top of the upper segment of wick is the highest position that the price ever achieved during the period. The bottom of the lower wick is the low.
The boon of this method of analysis is that the trader can straight off see whether prices rose or fell over the period. A white or green candle reveals a rising price or bearish tendency and a black or red candle illustrates a dropping price or bullish tendency.
Aside from this, the high and low compared to open and close prices are directly evident. Then you may have an absolutely solid candle without a wick.
It's called a Marubozu pattern. Prices never went greater or less than the opening and closing prices in this scenario.
The opening was the high price & the closing was the reduced price if the candle was red or black. The low price is the open and the close would be the high price when the candle is green or white.
A lengthened body means a relatively consistent movement either up or down. A lengthy wick detected on either bottom or top would imply a reversal.
For accurate trend index a candlestick needs to be studied in conjunction with the others that preceded it. Then you can fabricate more complex candlestick patterns indicating the plausible trends to come. - 23226
posted by X - Men @ 7:33 AM
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