Candlestick Charts

Japanese rice traders invented Candlestick charting methods in the 1600's. "Candlesticks" show a visual representation of traders' emotions; where as "bar" charts or "western" charts emphasize a focused approach on closing prices. Candlestick charts have a real-body (Open to Close) and shadows (Upper, Lower) showing intra-bar price relations between the key price values. In Candlestick charts, if a price closes higher than the open price then the Candlestick would be plotted Green suggesting bullish, and if the price closes lower than the open, the Candlestick would be Red, suggesting a bearish condition. The market sentiment is measured by the "real-body" length and its color. The bigger the real-body the bigger the sentiment and the smaller the real-body the smaller the sentiment which conveys indecision.

Candlestick charts offer a unique advantage over bar charts or line charts since they offer an excellent visual representation of the relationships with prior Candlestick bars. This indicates supply and demand along with the support and resistance levels, and possible trade decision opportunities for trend continuation or reversals.

Candlestick charts offer a simple way to show market movements and present outstanding trading opportunities. There are about 30-40 Candlestick patterns, continuation and reversals, which are helpful in trading. However, these patterns need to be clearly understood and mastered for successful trading purposes. The theory behind Candlestick charting method is not infallible. All patterns have clear confirmation theories and trading rules. The charts demand a full understanding of knowledge of pattern formations for successful trading.

There are many books written on Candlestick patterns and theories. Below are a few examples of trading Candlestick patterns.

There are many books written on Candlestick patterns and theories. Below are a few examples of trading Candlestick patterns.

11.» t7:M> 12:30 1).*'. H.Cfc 14:41 15:33

Candlestick Patterns

D

>oji

Inverted Hammer

Hanging Man

pinn

ing Top

Dark Cloud

Piercing L

ines

Bearish Engulfing

Bullish

En;

'ulfing

E

ft vening Star

Morning 5

»tar

Three Black Crows

Th

5ol

e W Idie

h rs

ite

Be

aristi

Harami

Bullish Harami

Belt Hold

Li

id

der Boti

torn

Fantastic Futures

Fantastic Futures

Get All The Support And Guidance You Need To Be A Success At Futures Trading!This Book Is One Of The Most Valuable Resources In The World When It Comes To Futures Trading For The Common Guy.

Get My Free Ebook


Post a comment