Principles of Candlestick Chart Patterns
One of the traders aids in developing mechanisms of candlestick charts are the candlestick patterns. They are quite indispensable when one is engaged in the creation of basic systems that help indicate a trend formation so you can begin trading.
The open, high, low, close rate of the stock, commodity or currency over a period of time is illustrated in the candlestick form. The period covered is typically user selectable.
The customary time period is 5 minutes but you may desire in particular situations to take 15 minutes. Usually, longer periods are applied for longer term trading.
The candle body defines the disparity of the close and open points. If it's green/blue (for colored charts) or white then the lower bounds of the rectangular body is the open and price went up during the respective period. A red (for colored charts) or black indicates the top boundary is the opening price, whilst the price diminished during that period.
The wick is the title given to the vertical lines that generally stick up from the top and down from the bottom of the candle body. The top of the upper part of wick is the highest position that the price ever attained during the period. The bottom of the lower wick is the low.
This approach of analysis assists the trader to know at a glance if values slashed or went up during the analysis time frame. Bearish tendencies or rise in price are depicted by green or white candles while bullish tendencies or fall in price would be recognized by red or black candles.
The association of open and close values to high and low values can be discerned immediately. Then there is a solid candle without a wick.
The name for this is Marubozu pattern. This signifies that the opening and closing prices were never moved in either direction by the low and high rates.
The high value as opening price and low value as closing price is represented by the red or black candle. On the other hand, green or white candle indicates the low was the opening price while the high was the closing price.
A relatively even upward or downward trend is defined by a long body. A reversal is determined by a long wick on the top or on the bottom.
A candlestick has to be read along with the previous ones in order to ensure appropriate trending. From there relatively intricate trends can be built to exemplify the trends in the future. - 23223
The open, high, low, close rate of the stock, commodity or currency over a period of time is illustrated in the candlestick form. The period covered is typically user selectable.
The customary time period is 5 minutes but you may desire in particular situations to take 15 minutes. Usually, longer periods are applied for longer term trading.
The candle body defines the disparity of the close and open points. If it's green/blue (for colored charts) or white then the lower bounds of the rectangular body is the open and price went up during the respective period. A red (for colored charts) or black indicates the top boundary is the opening price, whilst the price diminished during that period.
The wick is the title given to the vertical lines that generally stick up from the top and down from the bottom of the candle body. The top of the upper part of wick is the highest position that the price ever attained during the period. The bottom of the lower wick is the low.
This approach of analysis assists the trader to know at a glance if values slashed or went up during the analysis time frame. Bearish tendencies or rise in price are depicted by green or white candles while bullish tendencies or fall in price would be recognized by red or black candles.
The association of open and close values to high and low values can be discerned immediately. Then there is a solid candle without a wick.
The name for this is Marubozu pattern. This signifies that the opening and closing prices were never moved in either direction by the low and high rates.
The high value as opening price and low value as closing price is represented by the red or black candle. On the other hand, green or white candle indicates the low was the opening price while the high was the closing price.
A relatively even upward or downward trend is defined by a long body. A reversal is determined by a long wick on the top or on the bottom.
A candlestick has to be read along with the previous ones in order to ensure appropriate trending. From there relatively intricate trends can be built to exemplify the trends in the future. - 23223
posted by X - Men @ 9:30 AM
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