The candlesticks charts come from Japan in the seventeenth century when this method is used to analyze the prices of rich contracts.
Candlesticks chart the price fluctuations of a product. A candlestick can represent any period of time. A currency trader’s software can provide charts representing anywhere from one minute to one week per candlestick.
Candlestick charts do not involve any calculations. They simply chart price movements in a given time period. Each candlestick displays four important pieces of information, which show the price fluctuations during the time period of the candle.
In much the same way as the more widely-known bar chart, a candle gives us the opening price, the closing price, the highest price, and the lowest price of the time period. Candlesticks are easier to use because they more clearly demonstrate the relationship between the opening and closing prices.
The candlesticks display the relationship between the open, high, low, and closing prices.
The interpretation of candlestick charts is based on patterns. Currency traders use primarily the relationship of the highs and lows of the candlewicks over a given time period. However, some patterns can be identified to anticipate price movements.
There are two types of candles: the bullish pattern candle and the bearish pattern candle.
A white or green body displays a bullish candle pattern. It occurs when prices open near the low price and close near the period’s high price.
A black or red body displays the bearish candle pattern. It occurs when prices open near the high price and close near the period’s low price.
Note: Do not forget you could not be successive trade if you do not use Candlesticks charts.
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