In the Seventeenth
Century, the Japanese developed a
method to analyze the
price of rich contracts.
This technique was called "Candlestick Charting."
Today, Steven Nison is credited with popularizing the
Candlestick Chart, and is recognized as the leading
authority on interpretation of the system.
Candlesticks are graphical
representations of the
price fluctuations of
a product. A
candlestick can
represent any period of time. currency trader’s software can
provide charts representing time frames
from five minutes, up to one week per candlestick.
There are no
calculations required to
interpret Candlestick Charts.
They are a
simple visual aid
representing price movements
in a given
time period. Each
candlestick reveals four
vital pieces of
information; the opening price, the closing price, the
highest price and the lowest price the fluctuations
during the time period of the candle. In much the same way
as the familiar bar chart, a candle illustrates
a given measure
of time. The
advantage of candlesticks
is that they
clearly denote the
relationship
between the opening and closing prices.
Because
candlesticks display the
relationship between the
open, high, low
and closing prices,
they
cannot be used
to chart securities that have
only closing prices. Interpretation
of Candlestick Charts is
based on the analysis of patterns. Currency traders
predominantly use the relationship of the highs and
lows of the candlewicks over a given time period. However,
Candlestick Charts offer identifiable patterns
that can be used to anticipate price movements.
There are two types of candles
: The Bullish Pattern Candle and the Bearish Pattern Candle.
A
white (empty body)
represents a
Bullish Pattern
Candle.
A
black (filled body)
represents a
Bearish Pattern
Candle.
It is used/denotes when prices open near the low price and
It is used/signifies when prices open near the high price
and
close near the period’s high price.
close near the period’s low price.
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