There are three common types of forex charts <- infolinks_on="">: line graph, bar chart and candlestick chart. Candlestick chart is the type of chart the most popular and widely used. A candlestick chart shows things that are not visible in other charts. It provides comprehensive information on prices in the currency market and therefore help to better understand and predict future movements in prices.
Each bar is a candlestick chart also known as Japanese candlestick. Because of her appearance candle provides more information than any other line or bar method.
Chandelier has high, low, opening and closing both specific and has a body. A color and size of operators to provide the body with additional details on prices.
Most of the candle, the body represents the difference between opening and closing.
When opened for the above price is close, a candle body is full (gold).
When open to the close price is lower, a candle body is hollow.
One of the common set, for which we use for our maps is gold and black. So, the "gold" will be left to fill candles giving a signal that the price has dropped and "white" will be hollow to provide a signal that the price has increased.
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The "gold" and "white" candlesticks also describe two opposing forces in the market: buyers and sellers (also known as bulls and bears). Bulls (buyers) are forex traders who grow and bear the price (sellers) get the price down. Thus, gold and black candlesticks show who is controlling the market at that time.
The size of the candle tells how strong buying or selling pressure. A great symbols of long candles of high pressure on the market (buy or sell), while a small candle means that buyers and sellers are in the consolidation and the pressure is low.
Shadows (wicks or tails) of the candle shows the activity of buyers and sellers. The shadow of the top shows the activity of buyers towards pushing up the price. The lower shadow represents the activity of the seller to get the price down. Long shadows occur during high activity from both parties, buyers and sellers - in their attempt to convert the price in your direction.
A small upper shadow plus a lower shadow indicates a Forex trader in the best sellers were dominant, forcing down the price, but came under pressure from buyers at the end of the trading session.
A large upper shadow plus a slight decrease indicates that buyers in the first shops took over and raised the price, but eventually forced to resign in response to strong pressure from sellers.
A candle with no shadows indicated that buyers (in case of a white candle) or sellers of gold (candle) dominated during the entire trading session.
A candle that has a small body or not, and at the same time has small shadows indicates indecisiveness between buyers and sellers and a very small business - market weakness, slow trade.No body or doji candle shadows short and long term. It is formed when the buyers could not overcome the pressure from suppliers and lower the price beyond an open question, and at the same time, sellers met strong buyers of the pressure and failed in its efforts to educate the price below the opening point. The result is a draw: open price = closing price.
The first look at recently opened a table usually gives Forex traders a little or no indication of what the market is today. Thus, the Forex trader must reorganize indefinite figure huddled in a very clear picture of the power to trade.
The analysis usually starts with an understanding of the trend. The golden rule of trading says: "Always trade with the trend" ... or at least try.
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