Price movement can be represented as a line. Area and linear charts are at your disposal for this. But most of the time Japanese Candlesticks are used for viewing charts and analysis of today’s market situation.
Candlesticks contain information on price changes for a particular period of time and consist of the body and the wick.
The bodies border displays the opening and closing price while the upper and lower borders of the wick show the price maximum and minimum.
If the price of an asset increases than the candlestick turns green. If the price decreases then the candlestick turns red. A five-minute candlestick contains information about price changes during this given period. You may also imagine it as 5 one-minute periods which would contain the same data but on a different scale.
Bars are designed on the same principle. They are made of vertical lines and two short perpendicular ones left and right. Perpendicular lines show opening and closing prices and vertical lines show the price minimum and maximum.
Why candlesticks are most popular?
Japanese Candlesticks are popular among professional traders. The value of a candlestick chart is in its bold ease of use and depth of information with them. Traders gain not only an image but a full-fledged fundamental analytical instrument without which most indicators are not possible.
We wish you a pleasant trading experience.
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