Each “candlestick” is composed of a vertical rectangle and/or vertical lines. The lines are actually more like blocks that look like a candlestick. This is the most common chart used to see trends in Forex rates. When looking at a candlestick chart, make note of the following:
• The rectangle – is it black or white? The rectangle color indicates the open and close of a day or trading periods. It may be colored black or white. It depends on the relationship of the open and close to each other. A white body indicates that the asset price, at the end of the day, was higher than it was when it opened. A black body signifies a closing price lower than the price at the opening of the day. The lines, often called shadows, show the high and low of the day.
• Candlestick lengths – how far do they range? The lengths of each candlestick's rectangle and shadows show the range of trading in a day. This can give a trader a good view of each day relative to previous and following ones.
• The patterns – what do they mean? Patterns of candlesticks, sometimes called constellations, maybe interpreted as an indication of human trading activity.
No comments:
Post a Comment