Basics of Candlestick Chart Patterns
One of the traders aids 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 will indicate a trend formation so you can start trading.
The shape of the candlesticks attest the high, low, open and closing price of stocks, currencies or commodities during a particular period. This period can be picked by the trader.
The ecommended time period is 5 minutes but you may choose in specific situations to take 15 minutes. Typically, longer periods are employed for longer term trading.
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 consideration period. A red (for colored charts) or black indicates the top boundary is the opening price, while the price diminished during that period.
Vertical lines pointing up from top and down from the bottom are known as wicks. The highest stage the price ever hit is the top of the upper wick area. The low is the bottom of the lower wick.
This style of analysis helps the trader to know at a glance if values tumbled or picked up during the analysis time frame. Bearish tendencies or rise in price are evidenced by green or white candles while bullish temperament or fall in price would be pointed out by red or black candles.
Aside from this, the high and low compared to open and close prices are instantly evident. Then you may have an evidently solid candle without a wick.
It's called a Marubozu pattern. Prices never went greater or lesser than the opening and closing prices in this case.
If the body is black or red, the opening rate was the high and the closing market price was the low. If it is white or green, the opening rate was the low and the closing market price was the high.
A longish body means a relatively constant movement either up or down. A lengthy wick positioned on either bottom or top would signify a reversal.
In conclusion, to ensure precise trend reading, candlestick must be read within the context of the preceding candlesticks. You then can continue to make more intricate candlestick patterns that will signify probable future trends. - 23221
The shape of the candlesticks attest the high, low, open and closing price of stocks, currencies or commodities during a particular period. This period can be picked by the trader.
The ecommended time period is 5 minutes but you may choose in specific situations to take 15 minutes. Typically, longer periods are employed for longer term trading.
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 consideration period. A red (for colored charts) or black indicates the top boundary is the opening price, while the price diminished during that period.
Vertical lines pointing up from top and down from the bottom are known as wicks. The highest stage the price ever hit is the top of the upper wick area. The low is the bottom of the lower wick.
This style of analysis helps the trader to know at a glance if values tumbled or picked up during the analysis time frame. Bearish tendencies or rise in price are evidenced by green or white candles while bullish temperament or fall in price would be pointed out by red or black candles.
Aside from this, the high and low compared to open and close prices are instantly evident. Then you may have an evidently solid candle without a wick.
It's called a Marubozu pattern. Prices never went greater or lesser than the opening and closing prices in this case.
If the body is black or red, the opening rate was the high and the closing market price was the low. If it is white or green, the opening rate was the low and the closing market price was the high.
A longish body means a relatively constant movement either up or down. A lengthy wick positioned on either bottom or top would signify a reversal.
In conclusion, to ensure precise trend reading, candlestick must be read within the context of the preceding candlesticks. You then can continue to make more intricate candlestick patterns that will signify probable future trends. - 23221
posted by X - Men @ 7:47 AM
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