Home FinanceHow To Read A Candlestick Chart Used In Trading
How To Read A Candlestick Chart Used In Trading

How To Read A Candlestick Chart Used In Trading

Learning how to read a candlestick chart is very important in the field of technical trader. By learning this chart reading, one can gain deeper knowledge on how to read the forex charts.

Tracing the Candlestick chart back in history, the earliest representation or utilization of the chart can be found in Sakata Japan around the 18th century.

Before one can begin reading this chart, it is very necessary to understand the basic which can be found on Candlestick Patterns finmaxfx.

Talking in brief form, each candlestick on the chart is basically a certain time period. It can go from a single minute to an hour, to days and weeks even. In spite of the time, A candlestick on the chart can present these four discrete values.

  • The most leading price during a certain period of time.
  • The most moderate price during a certain period of time.
  • The initial price at the start of a certain period of time.
  • The ending price at the conclusion of a certain period of time.

Juxtaposed to western forex charts, the two, Bar and Candlestick charts provide more data to be examined.

The candlestick charts or pattern is so much easier to read and understand. The reading of the momentum of price during a certain time period becomes very easy with the help of a Bullish Candlestick chart which can present a full body with a distinct pre-assigned color.

This is one of the reasons why Candlestick charts have gain popularity among the professionals in the field as they are easier to interpret and have an efficient visual appearance.

Various Kinds of Candlestick Charts: 

Every Candlestick in the chart presents an initial value, an ending value, the highest value, and the lowest value. The positioning of these candlesticks is all key points to understand a candlestick pattern.

A trader needs to learn and understand these patterns to succeed in their career and gain more knowledge and deeper interpretation skills of the forex charts in general. These candlestick patterns can help the trader to read the pricing momentum of the market, to make estimations about the directional or general ups and downs of the asset prices, and so on.

Although the candlestick chart has many distinct and unique patterns, we are going to see the most common ones and widely known patterns in this article so that one can learn the expertise of reading a candle chart.

A candlestick chart reading is very helpful to gain information on these three market values; the bullishness, bearishness, and an indeterminate market position.

Some of the common candlestick patterns are:

Looking at the chart above, we can see a bullish candlestick is like a big white candle, which represents a bullish trend continuing, while a big black candle, which is a Bearish Candlestick, represent bearish trends continuing. On another note, the candlestick known as Doji Candlestick presents a neutral market situation.

To learn the distinct meaning of every pattern is very important to be a successful trader.

Leave a Reply

Your email address will not be published. Required fields are marked *

40 ÷ forty =