Japanese Candlesticks: a Complete Guide
Telegram FX Signals FxPremiere – Have you ever wondered how many wonderful tools did Japanese people invent? QR codes, car navigation, instant noodles, and sushi are just some of the Japanese things we can’t imagine our life without. However, if you ask a fellow trader about the most famous invention from Japan, they will answer you without a single thought. And the answer will be a “Japanese candlestick”. What is so special about this element of trading that makes many people believe in the power of its signals? How can you apply them to your trading routine?
Japanese Candlesticks: a Complete Guide
Japanese Candlesticks and Candlestick Charts
On this chart, a single candlestick shows the dynamics of a price during a particular period.
Charting Basics – Bars vs. Candlesticks
For example, on the weekly timeframe, a single candlestick demonstrates the market dynamics from Monday till Friday. However, if you switch to a daily timeframe, a candlestick will show you the change in the price from 0:00 till 23:59.
A candlestick consists of three main parts.
A single candlestick is indeed helpful in understanding the price dynamics. However, they work better when they come together on a candlestick chart. What is special about this type of chart, and how does it differ from other charts? Let’s find out. candlestick trading
Candlestick Chart vs. Bar Chart
A candlestick chart is similar to the bar one. Both of them show the performance of a price within a certain period. Like a candlestick on a weekly timeframe, a bar demonstrates how the price was moving during a week, from Monday to Friday.
How to Buy and Sell Currencies
A real body – the thick part of a candlestick. This is an area between the open and the close prices.
An upper shadow (wick, tail) – the vertical line above the real body. It shows the high of the session.
A lower shadow (wick, tail) – the vertical line below the real body. It shows the low of the session.
If the prices rose during the period, the candle is usually painted white or green. In this case, the opening price is at the bottom of the body, and the closing price is at its top. This candlestick is called bullish.
If the prices fell during the period, the candle is usually painted in black or red. In this case, the opening price is at the top of the body, and the closing price is at its bottom. This type of candlestick is named bearish.
Japanese Candlesticks: a Complete Guide
Japanese Candlesticks: a Complete Guide
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Japanese Candlesticks: a Complete Guide
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