How to read FOREX Part 2A Japanese candle stick provides an animated way to observe price movement for a currency pair over a given timeframe. How much "time" each candle represents depends on the timeframe of the chart we are looking at. If the chart below was a one hour chart, each red and blue candle on it would represent the price activity for the currency pair over the course of one hour. If the chart was a daily chart, each candle would represent price activity for one day. Popular FOREX chart timeframes include:
It does not matter what the timeframe is, a candle simply represents price activity for the timeframe of whatever chart you are viewing.
# 1 - The fat red section is the BODY of that candlestick. The lines protruding from the top and bottom are the upper and lower WICKS. By looking at all the candles on this chart it is evident that bodies can be all different sizes or there may be no body at all. Same with wicks, a candles wicks can be all different sizes or there may be no wicks at all. The length of the body and/or the wick(s) is determined by the price range for that candle. Longer candles just had more price movement during the time they were open. # 2 - The very top of a candles wick is the highest price for the currency pair while the candle was open while the bottom of the wick is the lowest price for the lowest price. # 3 - A candle is considered "bullish" when the close of the candle is HIGHER than the open. This means there were more buyers than sellers during the time the candle was open. # 4 - Sometimes candles will not have wicks as in the case with this bearish candle. The price opened and dropped off until it closed. This candle was bearish because the close was LOWER than the open. OK let's read a chart...
As you can see reading FOREX charts is actually very simple. The next tutorial will cover the different types of trading accounts. To learn more about Japanese candle sticks check out this course. <<< How to Read FOREX Charts How to Make Money With FOREX >>> | ||
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