Candlesticks Technique
Part 1 – INTRODUCTION
What are candlesticks?
Candlesticks are graphical representations of market price movements within a specified time period. A candlestick may represent price movement that occurred in the last 5 minutes; 15 minutes; 30 minutes; 1 hour; 4 hours; 1 day; 1 week; or 1 month for example.
Examples of candlesticks :-
There are two types of candles: the bullish pattern candle and the bearish pattern candle. Usually, we use green or white to represent a bullish candlesticks, and red or black to represent a bearish candlesticks.
Bullish candlesticks – Market prices are moving up
Bearish candlesticks – Market prices are moving down
Reading Candlestick Charts
Candlestick charts do not involve any calculations. They simply chart price movements in a given time period. Each candlestick displays four important pieces of information, the opening price, the closing price, the highest price and the lowest price of the time period.
Lets look at the example below :-
Bullish – A white or green body displays the market prices are up.
- Occurs when prices open near the low price and close near the periods high
price.
Bearish – A black or red body indicate that the market prices are down.
- Occurs when prices open near the high price and close near the periods low
price.
Next part we will talk about Bullish Candlestick Formations, Bearish Candlestick Formations and Reversal Candlestick Formations.
