In the 1600s, the Japanese developed a method of technical analysis to analyze the price of rice contracts. This technique is called candlestick charting. Steven Nison is credited with popularizing candlestick charting and has become recognized as the leading expert on their interpretation.
Candlestick charts display the open, high, low, and closing prices in a format similar to a modern-day bar-chart, but in a manner that extenuates the relationship between the opening and closing prices. Candlestick charts are simply a new way of looking at prices, they don't involve any calculations.
The Japanese Candlestick Line uses the data (open, high, low, and close) to create a much more visual graphic to depict what is going on with the stock. The thick part of the candlestick line is called the real body. It represents the range between the session’s opening and closing prices. If the real body is red, it means that the close of the session was lower than the open. If the real body is green, it means that the close was higher than the open. The lines above and below the body are the shadows. The shadows represent the session’s price extremes. The shadow above the real body is called the upper shadow and the shadow below the real body is called the lower shadow. The top of the upper shadow is the high of the day, and the bottom of the lower shadow is the low of the day.
Being able to identify a potential pattern formation, and understanding what candlestick signals are revealing, creates a format for establishing trading positions at the most opportune times. They can help currency traders to identify potential reversal of trends or possible points to enter or exit the market with a higher degree of reliability.
ReplyDeleteCandlestick is the way to go and if we are to trade well. Candle stick is good one to use in order to determine your trade, if you know how to read candle stick to trade it will be profitable for you. Candlestick is a great indicator.
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