Learn Many Forex Market Candlesticks

The term candlestick chart is used by many traders to show prices because visually candlestick charts are easy to understand and the information presented in each candlestick is quite complete, including the opening price, lowest price, highest price, and closing price. Candlesticks are generally used for short-term trading, so they are more suitable for use by traders. One of the advantages of candlesticks is that they can easily display market psychology. Generally, to describe the state of the rising (bullish) market price, the candlestick used is green or white. Meanwhile, to describe the condition of a declining (bearish) market price, the candlestick used is red or black.

Candlestick Advantages

There are several reasons why candlesticks are so reliable in trading:

• Candlesticks are very important in calculating trading analysis because candlesticks are a visual representation of what is happening in the market.
• By looking at the candlesticks, traders can get information about the opening price, high price, low price, and closing price which gives an idea of ​​the price movement.
• Candlesticks are very flexible, can be used with other technical analysis such as moving averages and momentum oscillators.
• By using candlesticks, it will help traders to understand what big players are doing and candlesticks will show traders when to open a position, when to exit a position, and when not to even pay attention to the market.

Key Elements of a Candlestick:

Candlestick Body Size

The element of measure can help identify who is in control, be it a buying trader or a selling trader. The larger or longer the candlestick size, the stronger the control holder. On the other hand, a smaller size indicates that neither a buying trader nor a selling trader can move the price too high.

Candlestick Shape

The length of the tail of a candlestick shows the volatility in price movements. The longer the tail of the candlestick indicates that the trader in control had moved the price far enough before being rejected due to a backlash from other traders.

The longer the tail of the candlestick, the greater the price volatility. Candlesticks with short bodies at the ends and long tails indicate a reversal, generally found in areas of support or resistance. While a candlestick with a short body and in the middle between two long tails indicates the market is in doubt, both buyers and sellers traders.

Candlestick Position

The component that most determines profit opportunities in trading using candlesticks is the position of the candlestick against the trend of a price. The candlestick pattern that appears indicates an opportunity to continue the trend or a price reversal pattern occurs.

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